Volume 2 - ElectricCanadian.com

844 HISTORY OF THE BANKto New York. A thirdequivalent in Ottawa for shipmentconsisted simply of the purchase of bar gold, eagles, or sovereigns,in London for shipment to New York.In the case of purchases of gold in Australia, the bank,in view of the position of the foreign exchanges, was able asa rule to pay a premium, ranging at times as high as fortyshillings per cent. As soon as the date of shipment of sucha purchase was fixed, the date of its arrival at the PacificCoast port would be carefully estimated and arrangementsentered into to sell an equivalent amount of cable transfers,to be made on a fixed future date, f ailing a few days or a weekafter the estimated arrival of the gold. Such transactions areknown technically as "forward cables." Sometimes such cableswere sold as far as three weeks ahead; on the other hand, whenthe exchange market was falling steadily, sales might bepostponed. In most cases the institutions selling the goldwere reimbursed by payment to their London agents as soonas advice of the shipment having been made was received bycable. San Francisco was usually the port selected fordelivery, and on arrival there the gold was sold to the UnitedStates Mint, payment being received in two amounts, fouror five days apart, as is the custom of that Mint. Otheritems of expense, such as freight and insurance, arranged atthe port of departure or arrival, were ultimately paid by theLondon branch.The story of silver during the war is a fascinating one.At the outset the silver market was dull and the demand forthe metal was light. In the London market it had been thecustom to fix two daily prices for silver, one for delivery inseven days, and the other for delivery in two months. Theimpossibility of extending credit under the abnormal conditionswhich prevailed, and the unwisdom of entering into commitmentsfor the future delivery of an article the supplies ofwhich were so likely to be interfered with by the progress ofthe war and might conceivably be cut off altogether, causedthis custom to be at once abandoned and, as silver could not