2. Purchase of bar gold in London, by arrange went with the Bank of England to release by cable the equivalent in Ottawa. for shipment to New York: The Bank of England released the bars at the rate of $4.73, the net cost of same delivered in New York was $4.7228, and the net amount realized by the sale of a cable on London was $4.71 per pound sterling, yield ing a net profit on the transaction of 1.28 cents per pound sterling.
6. Gold imports during the examples of gold shipments can be found in any book of foreign exchange, but the following examples of shipments made from London during the year 1915 are of interest. It should be noted in this connection, that, notwithstanding the abnormal conditions pro duced by the war, the Bank of England has not ceased to redeem its notes in gold ; anyone holding Bank of England notes can convert them into gold, and, if willing to take the risk of shipping, pay with them a debt abroad. Great Britain has not yet found it necessary to prohibit the export of gold to neutral na tions.
Delivery of the sovereigns was taken by tale and not by weight from the Bank of England, consequently, owing to the presence of light sovereigns, the ship ment weighed only 25,613.96 ounces (instead of
25,682.18' ounces had they been full weight), and netted at the assay office only $4.85367 per pound sterling instead of $4.86656, or a loss of 1.289 cents per pound sterling. Even with this handicap the shipment netted a handsome profit.
Standard gold at 77s. 11d. per ounce is equivalent to $4.86394 per pound sterling (378.98364 = 77.917). The proceeds netted $4.79148 per pound sterling which, with cable on September 1, at $4.56, showed a profit of 23.148 cents per pound sterling.
As a general rule, it costs less to export gold than to import it for the reason that while in transit little or no expense for interest is involved in the former trans action. Exports occur when rates are high and the exporter can sell his demand drafts and purchase and ship his gold simultaneously, the one practically off setting the other on their arrival in London, or other destination. In the case of an import of gold, how ever, the importer has to pay for the gold seven or ten days before he can realize on the proceeds in New York. He is, therefore, obliged to forego the use of the amount while gold is in transit.