New-York tribune., 1920-08-09

and such high wages. Consequently,
many years may be needed to bring
about recovery in world output to a
level comparable with that prevailing
prior to the war. 1t is probable that
production will continue to be low for
at least three years, and that five or
more years will be required really to
reestablish the industry
Factors in Gold Supply
"1t will be we'll finally to call atten-
tion to two factors which may have
potent bearing on the worlds gold sup
ply of the future, but have been com
monty overlooked. In the first place
the considerable amount Of gold which
has been imported by India and China
for many years, but especially since
1905, is not hopelessly lost to further
use in the worlds currency, in spite
OF the general assumption to the con-
trary. In analyzing the relations of
gold supply to price levels in the past.
one is justified in subtracting from the
supply the net gold import of the
Orient, on the ground that this fund
has practically dropped out of the
volume of active purchasing medium
now participating in the worlds ex-
changes; but unfortunately a similar
practice has often been followed in
analyses of the worlds potential gold
supply as such. Much of this gold,
which is carefully kept by the natives
in their boards, may largely reenter
the worlds channels of commerce
through the expansion of investment
banking among the inhabitants of Brit
ish India. This possibility is one that
grows with the spread of Western civ
llization in the Orient, and it may we'll
assume Importance in case a real world
crisis in gold production should event
ually develop.
an the second place, most of the
mass of gold produced up to the pres
ent time even now rests in human pos
session somewhere in some form, and
so constitutes potential reservoir
which may be drawn upon if the
worlds need of gold for monetary pur-
poses should eventually become great
enough. Gold is not perishable COM
modify, nor is it consumed like cloth
ing, food or fuel. Compared with even
most other metals, gold has been ira
dltlonally regarded as among the most
stable. 1t is not corroded in the at
mosphere or in moisture, so that its
lasting qualities exceed those of iron
or steel, or even silver. The rate of
abrasion Of gold 1000 fine is relatively
high, but most gold in its pure form is
handled in such way as to occasion
practically no less from wear, for gold
in coinage is always hardened by
alloyage, and for years there has been
a strong tendency to hold monetary
gold in bank vaults, etc, and circulate
it only in the form of certificates.
Even the gold used in industry is not
usually destroyed, although in Ger
tain electrolytic, dental and pharma-
ceutical uses, etc, some is, Of course,
lost in practically irrecoverable forms.
Much of the larger quantity used in
jewelry, plate, etc, eventually finds its
way back to the melting pot.
"ln short, the aggregate production
to date is more significant for gold
than for nearly any other commodity;
most of the forms in which it exists
more truly constitute a potential reser-
voir for future use. For several dec
AIDES up to 1900 gold outsped most
metals and many other commodities in
the rate of annual output; and de-
cline in the output should not vet
occasion serious alarm