NEW YORK TIMES JULY 28, 1914
Gold Shipments Set Record with $I0,6000,000 for Today.
Conditions that never before were witnessed in the foreign exchange market here resulted yesterday from the possibility of the trouble between Serbia and Austria, involving France, Great Britain, Germany, Russia, and Italy. Foreign exchange,-both cables and demand, rose to a point that prohibited further dealings. Bankers characterized the foreign exchange market as utterly demoralized.
War rumors brought on a recurrence of gold shipments with a rush, and the amount engaged to go out today on the Kronprizessin Cecilia was limited only by the willingness of underwriters to assume risks. Including $3,600,000 announced on Saturday, the shipments on today's steamer total $10,600,000. Of the additional $7,000,000, which is all in gold bars, $5,000,000 is being sent to London by the Guaranty Trust Company,$1,000,000 to Paris by Goldman,Sachs & Co. and $1,000,000 to Paris by the National City Bank.
This shipment establishes a new record in gold exports, the largest amount ever sent out on one ship before having been $10,000,000, which went out on the Kronprinzessin Cecilia in 1910. The insurance companies were not willing to insure more gold to go out on one ship, which in the event of a war would be subject to seizure by any of the powers engaged. On the Carmania of the Cunard Line, sailing today, further large amounts probably will be shipped. Up to last evening tentative arrangements had been made to send $8,000,000 tomorrow.
Bankers said that this country's supply of gold was at the mercy of the foreign markets, and that nothing short of a refusal by the marine underwriters to assume risks would check the outflow in the event of more serious trouble on the Continent. President Cleveland tried to check the drain of gold in 1893, and commissioned J. P. Morgan to enlist the International bankers against further exports. That corner was broken by Hermann Sleicken and the combination went to pieces. No attempt has been made since to resist foreign demands and it was said by authorities yesterday that under the existing banking system it would not be possible to retain gold so long as Europe was able to command it.
Arbitrage men appeared in the financial district as early as 3:30 o'clock in the morning to translate code cables and get their orders in shape for execution in London at the opening, which corresponded to 5:30 A. M. here. The liquidation of American securities, which has been going on for three months, has so far involved mainnly the low-priced, non-dividend Issues, such as the Denver & Rio Grande, Rock Island and Missouri Pacific. Yesterday heavy selling orders were received in Canadian Pacific, Amalgamated Copper, Northern Pacific, Union Pacific, Southern Pacific, Reading, and Steel. In the event of a general war it is believed that millions will have to be supplied by the United States to buy back high-grade stocks and bonds which long have been held abroad.
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