GERMAN GOLD DEMANDS.
A further circumstance which has had a considerable effect upon the gilt-edged market during the week has been the persistency of the drain of gold from this country to Germany. During the last three months we have sent some- thing like £16,000,000 in gold to Berlin, all of which has been absorbed by the Reichsbank, and that institution since the beginning of the present year has added about £38,000,000 to its stock of gold. And yet, notwithstanding these large aold imports, the German exchange has continued to move favourably to that country and against London. This is a truly remarkable development in the case of a country with an adverse visible trade balance, and with external commitments in the shape of Reparation payments to the extent of about £125,000,000 annually. Indeed, a twelvemonth ago everyone was speculating as to whether the German exchange would be able to stand so severe a strain. Not only has it been able to stand it, but the year has resulted in a colossal gain of gold. Even when the actual possible explanation is given, namely, continuous and extensive borrowing abroad by Germany, the situation is an extra- ordinary one.
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