ion of whether or
not to ship gold, important. No rule can be laid down as to what profit
bankers expect to make on shipments. If, for instance, a banker owes
L200,000 abroad himself and finds it cheaper to send gold than to buy a
bill, the question of profit does not enter at all. Then, again, many
and many an export transaction is induced by ulterior motives--it may
be for the sake of advertising, or for stock market purposes, or
because some correspondent abroad needs the gold and is willing to pay
for it. Any one of these or many like reasons may explain the
phenomenon, occasionally seen, of gold exports at a time when
conditions plainly indicate that the exporter is shipping at a loss.

As a rule, however, when exchange is scarce and the demand so great
that bankers who do not themselves owe money abroad see a chance to
supply the demand for exchange by shipping gold and drawing drafts
against it, the profit amounts to anywhere from $400 to $1,000 on each
million dollars shipped--for less than the first amount named it is
hardly worth while to go into the transaction at all; on the other
hand, conditions have to be pretty much disordered to force exchange to
a point where the larger amount named can be earned.

_Import of Bars from London_

Turning now to the discussion of the conditions under which gold is
imported, it will appear from the following calculation that interest
plays a much more important part in the case of gold imports than in
the case of exports. With exports, as has been shown, the interest
charge is merely on a three days' overdraft, but in the case of imports
the banker who brings in the gold loses interest on it for the whole
time it is in transit and for a day or two on each end, besides. A New
York banker, carrying a large balance in London, for instance, orders
his London correspondent to buy and ship him a certain amount of bar
gold. This the London banker does, charging the cost of the metal, and
all shipping charges, to the account of the New York banker. On the
whole amount thus charged, therefore, the New York banker loses
interest while the gold is afloat. Even after the gold arrives in New
York, of course, the depleted balance abroad continues to draw less
interest than formerly, but to make up for that the gold begins to earn
interest as soon as it gets here.

The transaction given below is one which was made under the above
conditions--the importer in New York had a good bala