ibed below about a quarter of a million
dollars' worth of bar gold is shipped to London, the money to pay for
the gold being raised by the drawing and selling of a demand draft on
London. Assuming that the draft is drawn and the gold shipped at the
same time, the draft will be presented fully three days before the gold
is credited, that being the time necessary for assaying, weighing, etc.
In other words, there will be an "overdraft" for at least three days,
interest on which will have to be figured as a part of the cost of the
operation.

Following is the detailed statement:

13,195-1/2 ounces bar gold (.9166 fine) purchased
from U.S. Treasury or Sub-Treasury at
$18.9459 per ounce $250,000

Assay office charge (4 cents per $100) 100

Cartage and packing 20

Freight (5/32 per cent.) 390

Insurance (1/20 per cent.) 125

Interest on overdraft in London (from time draft
has to be paid until the gold is credited) 3
days at 4 per cent. 83
---------
Total expense of buying and shipping the
gold $250,718

13,195-1/2 ounces of gold credited in London at 77
shillings 10-1/2 pence L51,380

Draft on London for L51,380, sold by shipper
of the gold, at 487.96 $250,718

In the transaction described above, the "overdraft" caused by the
inevitable delay in assaying and weighing the gold on its arrival in
London lasted for three days, the American banker being charged
interest at the rate of four per cent. 487.96 being the rate at which
the banker exporting the gold was able to sell his demand draft at the
time, was, under those conditions, the "gold export point."

In this particular operation, which was undertaken purely for
advertising purposes, the shipper of the gold came out exactly even.
Suppose, however, that he had been able to sell his draft, against the
gold shipped, at 4.88 instead of 4.87-3/4. That would have meant
twenty-five points (one-quarter cent per pound) more, which, on
L51,380, would have amounted to $128.25.

This question of the profit on gold exports is both interesting and,
because it has a strong bearing at times on the quest