part with reference to the further exportation of gold. Our financial system is undergoing a radical change—a long-delayed readjustment—and it is suicidal for us, as a nation, to so manage our affairs that we shall be forced to continue to ship abroad additional amounts of gold.
Now that our current indebtedness has been satisfactorily adjusted, the only likelihood of a further withdrawal of gold will come from a liquidation of securities. Having postponed the opening of our stock exchanges until this current indebtedness was adjusted, it is reasonable to conclude that this fear of a wholesale liquidation has been very much exaggerated and that, as a continuing menace, it has been unduly magnified. I am confident that if the stock exchanges and banks cooperate in an intelligent and unselfish manner, foreign liquidation can be controlled according to our desires and convenience. If it becomes known abroad that it is the unalterable decision of American bankers that they will not enter upon or continue in any enterprise which involves the exportation of additional sums of gold, the greatest danger through foreign liquidation will have passed.
Broadly speaking, the only gain which foreign interests can achieve from selling American securities is either to obtain gold from us, with which to purchase in some other market, or in order to build up a credit balance in this country, against which they may draw in payment for merchandise, foodstuffs and munitions of war bought from American manufacturers or exporters. When we shut the door on gold exportation—and it is possible to do so—then we have nothing to fear from the sale of American securities, in order that funds may be secured to purchase American commodities. We will be selling commodities at our own price—at a good profit—and buying securities, representing ownership in properties untouched by the war, at bargain prices. We have everything to gain and nothing to lose, providing we, as a nation, can regulate the extent of the transaction.
Perhaps there are some who will feel that this is a selfish position for us to take. There has been a great deal of misapprehension concerning the ethics which should determine our position with reference to repurchasing securities owned by foreign investors. In so far as this misapprehension is the result of overwrought sympathy for this or that belligerent, no comment is necessary, but so much of it as proceeds from an honest and sane misapprehension warrants respect and attention. We must remember that the foreign holdings of American securities represent the accumulation of half a century. To ask us to repurchase the securities which we have sold during fifty years in one year, much less in a day or a month, is preposterous. A considerable part of the difficulty which many people experience is the result of fundamental misapprehension as to the nature of these securities. They do not distinguish between securities and money. No one will dispute that if foreign investors held a large amount of American paper money.
