The gold then might have turned the exchanges and have been
brought back to us in return for our wheat and other products.
This double transaction is in essence one--a barter of present income in
the form of our wheat to Europe for future income in the form of
investment securities. It was interfered with by the refusal of the
insurance companies to insure the gold and by the closing of Stock
Exchanges against the inundating flood of securities. The first
difficulty, as to transporting gold, has been largely removed by
arranging for drafts against stocks of it kept on both sides of the
Atlantic. This will save the need of sending it on risky voyages back
and forth, and any final net balances can be liquidated after the war.
The second obstacle, the closure of the Stock Exchanges, is more
formidable, but cannot completely or permanently prevent the
transactions which so many people on both sides are anxious to
consummate. Curb markets and limited cash sales on the Exchanges
themselves are doing some of this business, and, sooner or later, much
more will be done, whether the Exchanges are open or not. Europe needs
our wheat and cannot pay for it except with securities, partly because
her own industry is paralyzed, partly because ocean transportation is
difficult.
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