Evening star., 1920-03-28

IN NMANUF FEATURING.
Bill Asks $40 an Ounce Levy
to Protect United States
Reserve.
To protect the gold reserve Of tbe
United States from, industrial depIe-
ton. Representative Louis T. McFad-
den. republican, Of Pennsylvania. a
member OF the House committee on
banking and currency. has introduced
a bill. which proposes an excise tax
OF $40 an ounce on all gold used for
5eweiry or other manufacturing pur-
poses. to be the collected by the gov
eminent and in turn paid for new
production.
This bill is designed to meet the
urgent appeal of the American Bank
ers' Association that the domestic
product1on OF new gold should be
maintained in sufficient volume to
satisfy all manufacturing require.
ments.
Resolution Adopted I'm October.
The American Bankers Association
Formulated this request in a resolu-
ton adopted unanimously at the
forty-fifth annual convention, held on
october 2. 1919. since which time
many proposals have been analyzed
to accomplish the result without dis
eurSing the monetary system.
tive McFadden provides that on and
after May 1. 1920, an excise of so
cents a pennyweight ($10 an ounce)
be collected on the sale of all articles
containing gold or gold used for
S,ner Su nraat;nd .nan monetary purposes. there
gold producer fs to receive $40 for
every newly produced ounce. Since
this transaction is confined to the
production and sale of gold as a
coaaaH COMMODITY only, and without ref
in any way influence the monetary
status OF the metal: BY this means
the jewelers. and other Consumers of
gold will be able to obtain all of
the gold that they require at the
usua! monetary price Of s2o.67 an
only upon the manufactured article
a. sold. and not upon the bullion,
Whlch insures free gold market in
the United States
Free Gold Market Maintained.
Other proposals were considered
which would have prohibited further
sales Of gold to manufacturers, but
II Is obvious that this would have
created Q premium market for the
metal ana that the hoarders and hold
ers OF old gold would have profited
py the premium, in which event the
premium paid upon old gold would
NOT In any way have assisted in the
By the imposition Of the excise upon
tne nniehed product there will be
no incentive for the consumer of gold
IN manufactures and the arts to
noard the metal in advance of the
passage OF the bill. because it will
is obtained: To shut Off sales of
gold to the trades would also encour-
age tho excessive destruction of gold
COIN, especially as there IL no law
In the United States to prohibit same,
ana tne result OF which practice
system. eS
Premium Not Subsidy.
me enactment Of this law under
present conditions, where the 1oid
consumed in the trades IN IN excess
OF tnat produced from the mines. will
not only be without cost to the gov
ernment: but will create a balance in
to the gold producer is not a subsidv
because the government has been and
is now subsidfzing the consumers of
gold In manufactures and the arts. The
wholesale index price number Of ali
commodities In 1919 was 212, as COM
tSst pa.eo nsS 70 o9a soT IN 1914: which shows
confornience with all other commodi-
ties In the United States. the gold
PIeooucer pr would have received for his
5S.5 miliion-doflar production in 1919
$Sb,5oo.0oo. or 112 per cent more than
& .ns monetary @ price which he did re-
ceive. The excise to be imposed upon
manufacturers Of gold merely lessons
the amount Of this subsidy. The $40
excise 10 equivalent to an increase OF
% per cent In the price of the metal
contained In manufactured articles.
waiis y,a an commodity prices have risen
onsets only 46 per cent Of the SUBSIDY
now In force and which. because ~
the 1act that the government sells
gold TO the trade at the original MON
etary price. must be and IL being met
oy the producer. The bill merely Gre
etes the governmental machinery by
which the consumer Of gold In the
trades may pay moro nearly the cost
OF production for his raw material.
Prevents Industrial Depletion.
Tho gold production Of the United
States declined from S1o1, 900, 900 in
1915 to $5S.000.000 in 1919. q loss of
~ per cent in the last four years. II
IL evident that no less than 81 per
cent OF the capital invested in the
gold mining industry has already been
rendered unremunerative by the
forced closing down Of properties.
These properties suffer great deterio-
ration by the forced closing down and.
therefore, other losses arc necessarily
sustained and increased costs In.
volved In reopening them. It is eyi.
dent that the, longer this condition
10 allowed to exist the greater will
be the reduction In the gold output
Tor this year. which means q heavier
drain upon tho monetary gold re.
serve. because manufacturers are
consuming a. much or even moro
than they did last year. The longer
this situation is allowed to Continue
the more difficult and expensive Will
it be to reclaim gold properties and
regain the normal gold production Of
the United States.
In view Of the need for protecting
the monetary gold reserve from fur-
ther excessive depletion by consump-
ton in manufactures and the arts.
and the present emergency with
which the gold-mining industry is
confronted. It 10 expected that the
consideration Of this bill will be ex-
pedited.
UNITED STATES ASSAILED
BY BOLIVIAN PAPERS