Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1920-03-05

cent months. A great deal Of what
is published on the subject Is abstruse
and incomprehensible to the man in the
Street. Some day it is expected that
il will be clear to most people that
gold when exported ceases to be money
and is a commodity, with commodity
value distinct from its money value,
and simply takes the place in an inter-
national barter or exchange of com
modities of such other commodities as
would be necessary to balance the trade.
Financiers and economists profess to
see danger in the present outflow Of
gold from the United States. The Me :.
chanics' and Metals National Bank, Of
New York. in its March letter takes up
the discussion ut considerable length
Among other things it calls attention
to the fact that the present outflow OF
gold has reached greater proportions
during the last two months than for
the year 1919. when the greatest export
was reached in our history. But it Is in
relation to the country's cred its that
the Mechanics and Metals Bank draws
particular attention, as follows .
What makes this outflow Of gold Of
unusual Importance Is the great super
structure of credit raised upon it..
Credit under the Federal Reserve sys-
tenn has not been strained to its legal
maximum, but for every dollar Of gold
money in the country there now exists
| from SS to $40 in bank credit. If we
| take the lower of these figures. it means
that to maintain even as great n ratio
of gold to credits as we now have. we
must wipe out So in credit for every
| dollar in gold which leaves the country.
| This means that IL as much gold were
to leave the country this year as last
| f,nn rl SO0n nm ka,, t1
wipe out nearly 50 400, 100000 IN
credit.
What makes this gold exodus more
serious is the falling off in gold produc-
tion. The worlds output has been de-
clining year by year. falling from $3.50, =
900, 900 in 1915 to $685. 900, 900 in 1918.
In the United States it has fallen from
S1O1 900 900 in 1915 to SOS. 900 900 last
year. What is more significant is
that none of the new gold produced last
year went into the currency. About
$50 .OOO. 900 was used in this country
in jewelry and other arts.
Equipment Trust Certificates Withdrawn
The equipment trust certificates, which
were to be secured by the equipment or
dered by the railroad administration
for the roads during government opera
tion and control and which were to be
offered to the public as soon as the roads
were restored to private ownership and
operation, according TO Director Gen
eral Hines, will not be offered at the
present time.
A banker said that this had been con
templated for. some time past. 1t wa'
feared, he said, that If the government
were to seek a market for these certii
Gates it would interfere with the is
suance of other securities by the rail.
roads on their own account. Should
this be the result. it was argued, /
would tend toward making the road
more dependent upon assistance from
the new loan fund provided by the new
railroad bill than they would otherwise
There would be no advantage in thi
operation to the government, it wa
said.
It was merely n passive interes
which was shown by the few fnancier
whose opinion was asked on the pro
posed large international loan to Ger
many, and those who ventured al
opinion ridiculed the idea of any larg
loan being foated in this country fo
Germany at the present time.
Almost every one, however, said tha
the idea of Germany being assisted
financially to get on her feet so that sh,
could pay off her Indebtedness is fai
and reasonable, but that it should no
be done at the expense Of the busines
and industry of the United States.