APPENDIX 
671 
(XVIIIi) The comparative use of gold shipments, short banking 
credits and securities in balancing American international payments 
each year is illustrated in the following table (000,000 omitted) : 
INTERNATIONAL SHIFTINGS OF FINANCIAL ITEMS 
Balances 
1023. . 
925. «8 so 8 0 ee 0. 
1923. ---- * ® 8 8 2 8 0 8 4 0s 0 se 
1926. ........ 
1927. ... oo 
1928......... 
1929. 
» oo % @¢ eo 
4 a ve ase ee ase es 
Gold 
- ~OF 
a4 272 
-_ 120 
Ts qi 
+ 15 
Securities 
+ 30 
733 
560 
"40 
“5 
708 
—186 
(Minus gold items=net American gold imports, and plus gold items= 
net American gold exports. Plus credit items=net American short loans 
abroad, and minus credit items=net American short borrowings from abroad. 
Minus security items=net American excess of foreign security purchases 
over foreign investments here, and plus security items=net excess of foreign 
investments here over our investments abroad.) 
(XVIIIj) “Japan passed through a severe crisis in 1901, and part 
of the year before, because of the barrenness of her stock market. 
She had been engaged in great enterprises, but the stimulus given 
her industrial interests did not prove immediately profitable. Her 
people had begun importing great quantities of foreign goods, includ- 
ing too many luxuries, and the result was that she had large debts 
to pay abroad. If she had had a good security market, these debts 
would have been settled by the transfer of securities; but having 
only a few securities, and those of doubtful value, to throw upon the 
London market, she was compelled to settle at a sacrifice the demands 
upon her for money. She was compeiled to sell goods for any price 
that could be obtained. . . . 
“France was saved from one of the greatest crises of history by 
the large holdings of securities among her people during the Franco- 
Prussian War. When Germany demanded an indemnity of five thou- 
sand millions of francs ($1,000,000,000), it was in the belief that its 
payment would throw a paralysis upon French industry and enterprise 
which would prostrate them for a generation. But what happened? 
When the French Government appealed to the people, saying, ‘We 
need five thousand millions of francs to pay off this indebtedness,” the 
whole matter was adjusted through the securities market, and in a few 
years the Bank of France resumed the payment of gold for its notes, 
Frenchmen subscribed liberally for the securities of the new loans to 
pay off Germany, and in order to obtain the necessary funds, they 
directed their broker to sell in London, Berlin, Vienna, Brussels and 
New York the old securities which they held. Five thousand million