HEAVY GOLD EXPORTS.
BOTH the Money Market and the Stock Exchange have been completely dominated during the past week by the great gold drain from the Bank of England. During the past two months over £20,000,000 in gold has been taken out from the Bank for France and Germany, and chiefly for the former country, the drain during the past ten days having been especially severe. Indeed, on Monday last nearly £3,000,000 was taken on one day from the Bank, and this was followed by a further withdrawal on Tuesday of about £1,000,000. Numerous explanations have been offered of this exceptionally heavy gold drain, but the chief explanation is that Germany has again been borrowing sufficiently heavily from abroad to put the exchange in her favour, and kr a long time past the Bank of France and also the French Money Market generally have been investing francs largely in foreign currencies and notably in dollars and sterling, especially, perhaps, in sterling. Like all such movements, the tendency has been overstrained and the Paris Money Market seems to have woken up during the last few weeks to find itself decidedly short of liquid credits. As, however, I have explained many times in these columns, France has a complete pull over this country owing to the huge sterling balances which have accumulated both on behalf of the Bank of France and on behalf of French nationals. Therefore, with the French exchange on London fallen to a low level, the dispatch of actual gold from the Bank has proved to be far and away the cheapest form of remitting sterling balances to France.
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