The Bridgeport times and evening farmer., 1920-05-01
GOLD MUST NOW
 BE DISTRIBUTED
Restoration of Gold Standard Will Readjust Unique Monetary situa- tion.

I
 tion.
 The United States and South Amer ican and Oriental nations, which as a consequence of the war have an ab- normal proportion of the worlds stock of gold, may reasonably expect a persistent drain on their holdings Of the metal until an approximate | world equilibrium has again been re- stored, the National Bank of Com | merce in New York says in the May 1 number of it's magazine, Commerce Monthly. This will compel the nations ] so situated to readjust their credit {, structures within themselves At present, the bank declares, the world monetary situation is unique as a re- suit of the war which overturned the currency systems of Europe A return to the gold standard throughout the commercial world l seems to be the most practicable so- | lution of the current monetary prob lens, according to the bank TO | bring about this return, it says, the prevention of additional imitation, the more or less gradual reduction of the
 value of outstanding currency and credit and increase of production are l necessary. A prediction that gold | will be employed for money uses more 1 effectively in the future than it has l been in the past also is made
 l It is shown in the article that be- tween 1913 and 1918 the money
 stocks of gold in France decreased from s1, 20o0, GOO, 900 to $6S4, ,000, GOO; in
 Great Britain, from sS30, 100000 to
 $596, ,00e, GOO; in Russia, from s1,0a2,-
 o00,o00 to $412, 100000, and in Ger 1 many, from S916, ,00O, 900 to $72o,O00,-
 900. Meanwhile in the United States
 the gold money stock had increased
 from $1,905, 100000 to S3,165, ,000,00G
 Using the year 1913 as a 100 Der
 cent. basis, currency in the larger
 countries had by 1919 increased as
 follows: United Kingdom, PA per
 cent; France, 375 per cent; Italy,
 435 per cent, and Germany, S75 per
 cent. During the same period the
 currency expansion in the United
 States reached only I'll per cent
 In countries which have developed
 the use of credit to a high degree, the
 war occasioned a similar expansion in
 the volume of credit it is pointed
 out. In England, according to a re-
 cent estimate, the volume of bank de-
 posits, exclusive of those in the Bank of England, appropriated f1,070,oo0, 900 prior to the war and at the end
 of 1919 totaled f2,30o, 100000, an in I ed States deposits subject to check increased from $S,52o, 100000 in June
 1913, to $21 ,0Oo, 900 in June, 1913
 an advance of 147 per cent
 'The war played havoc with the B worlds money, and its restoration tc soundness is one of the major prob g lens now to be solved" the bank ' says. Good money is necessary tc n the working of our existing industria rTJ,1 af standards that will be reasonabl! D uniform throughout the commercial = world and reasonably stable ovel @ periods of time, clearly is desirable
 | A return to the gold standard, whicI f constituted a. workable system befor' e the war, seems the most practicab1 V way out of present difficulties
 s "Eventua1Ey, the resumption of go1
 convertibility in the several countr1e n will involve a redistribution of tn = worlds stock of the metal. As goI is restored to it's monetary uses i a those countries now on a paper basi which are sufficiently strong to under a take the process of def1ation, their re
 quirements for the metal will ir
 crease. In some other countrie: , which are too weak to follow a rigo1 e ous policy of dehation, the possibl Ie clearing away of worthless pape l. currencies may leave & money va III cuum to be filled by some sort ( Is specia money. This also would occs
 sion a considerable demand for goIt re Consequently, those countries re United States and South America IS, and Oriental nations-which as a COT Tt sequence of the war have acquire m an abnormal proportion of the world Tt stock of the metal, may reasonabl sh anticipate a persistent drain on the l. holdings, compelling the readjus ve ment of the credit structure withi ss themselves until an approxima1 r. world equilibrium has again been rt on stored.
 ''In the future, however, it may I
 expected that gold, in it's money use ld will be employed much more effet Id lively than in the past During u d war, throughout Europe and Amer If ca, gold has disappeared from a. le tua1 circulation and has been col r. centrated in the reserves of centr De banks. With the improvement ( n- credit facilities there is less and le ny reason for it's actual employment go circulation. In the United Stat S. before the war the people general r. preferred substitutes for hard none
 The war has probably done goo ay deal toward educating the people 7n the more important European cou1 C. tries to the same view. The stocl IT. of gold, therefore, will be held 10 bank reserves. Its freedom of flo so between monetary and commodi 'te uses will continue uninpaired; it wi serve as in the past in settling fo eign trade balances. Thus, vii by ,a o a1ai1 serva ss 1T oL standard of circulating media, and - -. a regulator of the volume of ou