Now we have to consider the position of this country with regard to the possibility of our gold flitting in the event of very great credits being established in this country.  The position of the three great allied countries as to gold is exceptionally strong.  Russia and France have accumulated great reserves which have been barely touched so far during the war.  I do not think the French reserve has been touched at all, or has been used in the slightest degree, and I think as far as the Russian reserve is concerned it has only been reduced by the transfer of L8,000,000 of gold from Russia to this country.  Our accumulation of gold is larger than it has ever been in the history of this country.  It has increased enormously since the commencement of the war.  It is not nearly as large as that of Russia, France, or Germany, but it must be borne in mind that there is this distinction in our favor; up to the present we have had no considerable paper currency, and this is the great free market for the gold of the world.  The quantity imported every year of, what shall I call it, raw gold, comes to something like L50,000,000, and here I am excluding what comes here by exchanges.  The collapse of the rebellion in South Africa assures us of a large and steady supply from that country, and, therefore, there is no real need for any apprehension.

But still it would not have been prudent for us to have overlooked certain possibilities.  I have already pointed out some of them—­the diminution of exports, the increase of our imports, the absorption of our transports for war purposes, large credits established for our own and other countries, and a diminution in our savings for investments abroad.  There is just a possibility that this might have the effect of inducing the export of gold to other countries.  We therefore have to husband our gold and take care lest it should take wings and swarm to any other hive.  We therefore made arrangements at this conference whereby, if our stock of gold were to diminish beyond a certain point—­that is a fairly high point—­the Banks of France and Russia should come to our assistance.

We have also made arrangements whereby France should have access to our markets for Treasury bills issued in francs.  We have also initiated arrangements which we hope will help to restore the exchanges in respect of bills held in this country against Russian merchants, who, owing to the present difficulties of exchange, cannot discharge their liabilities in this country.  They are quite ready and eager to pay, they have the money to pay, but, owing to difficulties of exchange, they cannot pay bills owing in this country.  We therefore propose to accept Russian Treasury bills against these bills of exchange due from Russian merchants, Russia collecting the debts in rubles in her own country and giving us the Treasury bills in exchange.  We hope that will assist very materially in the working of the exchanges.  It will be very helpful to business between the two countries, and incidentally it will be very helpful to Russia herself in raising money in her own country for the purpose of financing the war.