Gold Shipments

The International Acceptance Bank, Inc. lost approximately $1,000 last week by shipping $1,000,000 in gold coins to England. But thereby the bank gained the prestige of being the first U. S. institution since 1914 to send gold to England as a transaction in foreign money exchange.

Two other conditions stimulated the shipment: 1) A fortnight ago transatlantic steamships reduced their freight charges from $3,750 to $1,500 for each $1,000,000 of gold carried; 2) The pound sterling increased in international value above its par of $4.8665 to $4.8828. Theoretically when the pound sterling becomes worth $4.8875 it is worthwhile for U. S. banks to send gold to England. The difference of 2.1 cents is enough to pay for freight, insurance ($450 for every $1,000,000), cooperage ($60), cartage ($50), brokers’ fees and loss of interest. Last week, although the pound’s value was not quite up to the “gold shipping point,” it was close enough for the International Acceptance Bank to grasp the opportunity of being “first.”

Later in the week the Dutch guilder became worth 40.45 cents, a fourth of a cent above its par value (40.20 cents). The difference made gold worth shipping to Holland, and Manhattan bankers hastened to load $4,000,000 in gold on the S. S. Veendam, just as she was at the point of departing from Manhattan. The shipment was the first to Holland since before the War.