New-York tribune., 1906-10-01
ENGLISH FINANCR
Gold for america - Combinotio.,
Under Free Trade.
London. September a

In consequence Of gold exports to America ara
| money may become dearer still II tho require
ments Of that market are not speedily rne, N.
there have never been 80 many sources OF r,n-
ply. nor have the shipments OF gold to London
ever been either so large or so regular Thir-v
years ago Australia. America and Russia con
tributed about 5.OO0O0o ounces or the buIx a,
the worlds gold supply. The TransvaaI xo,d
fields now have monthly output OF over 500
900 ounces. or 100000 ounces annually. H n.
August average can be successfully maintained
That district alone surpass the production
Of Australia, California and Russia as II waz ns
fore the discoveries OF the Witwatersrand ds-
posits. and IL the labor question can be- sorved
there can be large increase OF tha outpu+
simultaneously with this expansion OF tha
Transvaal Industry there has been an enlarra-
ment of the American and Australian suupliss
and new gold fields have been opened IN British
| Columbia and the Collar district, In souchern
India The imports Of gold ingots IN England
are now exceeding all previous records, YET
bullion disappears rapidly as 1t comes Ths
stock OF gold IN the issue department Of thu
Bank Of England IS larger than it was thirty
years ago. although the worlds production IA at
the maximum point. and there is constant need
OF protecting the gold reserves there and IN the
Joint stock banks by raising the rate Of interest
and making money dearer and more valuabls In
the kingdom.
One OF the causes OF the rapid absorption and
distribution OF gold is the enormous increase IN
the demand for industrial consumption The
quantity required for the mechanical arts IN
America, Germany. France and Great Britain
has more than doubled since the discoveries IN
the Transvaai Alaska and British Columbia
Neither this increased demand nor the enlarge
rnent Of the stocks OF gold in France Germany
sion of currency fully accounts for the disappear
ance of gold from England. A partial explanation
may be found IN the fact that the balances OF
trade year after year against England and IN
favor Of the United States. and are settled by
exports of gold. American securities, national
railway and industrial are largely held at home,
and these unsettled balances cannot be paid by
remittances Of bonds. America Is largely a
| creditor country with export trade far in ad-
vance of it's imports: and even when full allow
| ance is made for freights IN the carrying trade
and for the millions expended in Europe by
transatlantic tourists. there is so wide margin
| that the conclusion Is natural one that gold Is
needed for effectirfg settlements Not only has
| gold been exported recently TO New York direct
| ly from London but there have also been ship
| ments from Australia, the Argentine and South
| Africa. and by many other readJustments In
debtedness to America has been cancelled. With
the conditions of foreign trade as they ara. and
| with Americans IN debt to themselves rather
than to foreigners. there must be continuous
movement OF gold toward New York and San
/ Francisco. In these circumstances the question
| Of strengthening the gold reserves OF the Bank
| Of England is beset with difficulty.
| The steel tube combination is a forclbls re-
rninder that concentrations Of capital are not
| dependent upon tariffs but may be brought
( ah YDdar
firms in this trade in England Wales and Scot
! land, and their annual product is estimated at
100000 tons. aggregating s3OOOOOOO IN value
| These firms have been competing with one an
other more or less destructively both In the
home and export trades and the leaders OF the
industry have known that It would be measure
Of self-preservation If they were to come TO an
understanding among themselves by which their
business interests could be harmonized and
prices regulated Conferences have been IN
progress for two years but It has not been
easy to arrange combination scale OF prices.
since a few of the largest firms were engaged
almost exclusively in the export trade and could
not compete effectively with American and Ger
man rivals If there were a standard rate based
on the open market. Ruinous competition has
had its effect. and a combination has been Writ
ually arranged, with scheduled prices for the
home and foreign markets. a reduction OF dis
counts TO uniform basis and an agreement
that there shall not be any cutting Of rates. An
exception is made of boiler tubes in which free
competition is still allowed. This becomes IN
telIigibIe when IT is known that the only big
firm which has not Joined the combination
makes speciality OF manufacturing boiler tubes.
and has a large business. This firm Will now
be exposed to fierce rivalry whenever proposals
l are invited for work Otherwise business VIII
be conducted at home and abroad for the COM
mon good and there will be a larger margin for
profit.
This steel tube combination illustrates Two u
three controversial points. One is the impracA-
cability of preventing by a system Of free i'm
ports systematized regulation OF prices. Drodne-
ton and distribution These English and Scot
tish manufacturers are deliberately ordering an
advance OF prices for the export trade and COW
enanting among themselves TO stand by tns
schedule until it shall be officially altered This
IS what is done in Germany in nearly every
branch OF the export trade and in this way COM
petition outside the home market is intsligehuy
and effectively directed Another point which Is
brought out is the fact that there are two prices
In England as well as in America and Germany
the home market price and the export price,
and that one is higher than the other. It IS no.
in protection countries alone that homo consun-
ers have 10. pay the standard price and reou'-
tions are ordered for foreign trade. The sans
thing is done in Free Trade England The ex-
port price is not the market price II It were
there could be no competition in many branches
OF foreign trade. British manufactures are SOD
at lower prices abroad than at home. German
and American merchants are not the only men
I'm tra6e who 5uv,n su~DIls prOduCts abroad.