an banker, fcs. 5,158,969 at 25 francs 10
centimes per L L205,536

New York banker sells his draft on London for
L205,536 at 4.86832 $1,000,615

Conditions principally affecting the shipment of gold by the triangular
operation, it will be seen from the above calculation, are the rate of
exchange on London at New York, and the rate of exchange on London at
Paris. The higher the rate at which the New York banker can sell his
bills on London after the gold has been shipped, the more money he will
make. The lower the rate at which his Paris agent can secure the drafts
drawn on London, the greater the amount of pounds sterling which the
gold will buy. High sterling exchange in New York and low sterling
exchange in Paris are therefore the main features of the combination of
circumstances which result in these "triangular operations."

_Gold Shipments to Argentina_

Of the many other ways in which gold moves, one way seems to be
becoming so increasingly important that it is well worthy of attention.
Reference is made to the shipment of gold from New York to the
Argentine for account of English bankers who have debts to discharge
there.

Owing to Argentine loans placed in the English market and to heavy
exports of wheat, hides, and meat from Buenos Aires to London, there
exists almost a chronic condition of indebtedness on the part of the
London bankers to the bankers in the Argentine. Not offset by any
corresponding imports, these conditions are putting Buenos Aires each
year in a better and better condition to make heavy demands upon London
for gold, demands which have recently grown to such an extent as to
make serious inroads on the British banks' reserves. Unwilling to
comply with this demand for gold, the powers in charge of the London
market have on several occasions deliberately produced money conditions
in London resulting in a shifting of the Argentine demand for gold upon
New York. The means by which this has been accomplished has been the
raising of the Bank of England rate to a point sufficiently high to
make the dollar-exchange on New York fall. Able, then, to buy
dollar-drafts on New York very cheaply, the London bankers send to New
York large amounts of such drafts, with instructions that they be used
to buy gold for shipment to the Argentine.

The very general confusion of mind regarding these operations in gold
comes perh