Atlanta tri-weekly journal. [volume] (Atlanta, Ga.) 1920-19??, 1921-07-19
PRICE RAISE May
FOLLOW GOLD FLOW
BY HARDIN CoLFAx
Leased Wire Service to The Journal.)
(Copyright 1921

BY HARDIN COLFAX
Ieased Wire Service to The Journal)
Copyright, 1921
WASHINGTON, July 16.-We are
getting so much gold from abroad
that prices threaten to rise again.
AS a matter of fact, the index num-
Der Of IA national commercial agency
the number representing the
weighted average Of prices Of the
chief commodities sold in this coun-
try-was higher July list and on June
1st, the first rise after thirteen sue
cessive months of decline.
A veritable tidal wave Of gold is
sweeping upon American shores. 1t
comes from almost every civilized
nation. 1t has never come in such
huge volumes before. And, instead
of lessening, the quantity Is getting
larger, much to the Embarrassment
of certain bankers who see an newt
able reaction from the downward
imitation unless banks the country
over are extremely cautious in let
ting down the bars.
At the present time one-third of
all the gold on the globe rests in
American Golfers. 1t has come, as
if drawn by a magnet, at the rate
of fifty millions dollars month and
more since the first of the year.
England has sent US one hundred
and two million dollars, France sew
enty-three millions, Sweden forty
three millions. Holland fifteen mil
lions, Canada twenty-five millions,
South America twelve millions, Asia
forty-six millions, and even Aus
tralia and New Zealand have sent
their mite. The total inflow for the
first six months of the year is re-
ported by the federal reserve board
at three hundred and forty-six mil
lions and the total amount Of gold
time is placed at nearly two and
one-half billions.
Banks Fortified
With the golden food has come a
tremendous Increase in the potential
credit capacity Of the banks.
The banks within the federal re-
serve system could lend their bor-
rowers at the present time not less
than twelve and one-half billion dol
lars because Of the increased gold re-
serves. The temptation, of course, is
to have those reserves working, earn
ing money for their owners. That, in
turn, means lending money freely
and lending money freely can not
fail, in the opinion of federal reserve
board officials here, to reflect itself
in rising prices and imitation.
Credit is easier today than it has
been at any time within more than
year, although the situation is
e.
hard time to borrow money on crops
raised at high cost and marketable
probably at loss. But industry
generally can borrow money today on
good security where it could not Dor
row is six or eight months ago. That
condition, federal reserve board Of
ficials say, lends itself to a revival
of prices, too. in some lines, notably
in farm products.
Last week there were seventy-five
major pice changes in commodities.
Fifty-tWo of the changes were de-
clines; twenty-three, advances. AL
of raw materials in the United
States, the world at large, according
to reports t6 the department of COM
merce, is terribly short of goods of
almost all kinds. Gold is being sur
rendered rapidly, in exchange for
luCn n66QSQ 1000. ClOInlDS. lu6l
and shelter. And those commodities
are going out in lessened quantity
each month from American ports.
Rate Of Acceptance
A noticeable result of the eased
credit situation is the rate at which
acceptances are being absorbed by
the banks and the investment houses.
An acceptance little known until
quite recently. is virtually a bill for
goods shipped by a producer to a
consumer or middle man, due from
sixty days to six months in the flu
ture, and marked accepted" by the
debtor; 1t really. amounts to the
debtors promise to pay the amount
of the bill when it is due. The bill
bears interest and is discounted by
the bank.
Conditions Year Ago
A year ago the federal reserve
banks were carrying this accommo-
banks apparently had their funds tied
up otherwise. The amount of &C
ceptances rediscounted with the
twelve reserve banks at that time
was three hundred and ffty-six mil
lion dollars. Today the reserve
millions of this class of paper. The
rest is out in the members banks.
showing their increased ability to
carry the load, or in financial houses
deeming this kind of short term in
vestment desirable
One Of the unusual features con-
nected with the sudden inflow of
sixty-odd millions Of gold has come
from nowhere into the keeping Of
federal reserve banks.
On December 81 last the gold in
the reserve banks possession totaled
lot hn 70
OoO,o 0O-an increase of 100000, 1000,
During that period the total amount
Of gold imported into the country
was $340, 100000, making all due al
loWance for the comparative driblet
of S6,000,000 that was exported
$62, 100000 than the increase in fed
eral reserve bank holdings.
Where did that $62,0OU,00O come
from? Certainly it did not come
from abroad. 1t could not have from
the national and state banks and
cause they still have about as much
gold as they had six months ago
and the total that they had then was
less than $62,000,000.'
Of course it came from somewhere.
The board is not worrying about it
and a check-up of its accounts will
show, without doubt, the origin. But
OI1 LIlS 1otCS VI Tie DOdlu > SIdIGulGuI l,
the origin of that mountain of gold
is not revealed.
BALANCE OF FOREIGN
TRADE is INCREASED
WASHINGTON, July ia for
eign trade balance of approximately
$4,000, 100000 to the cgedit of Ameri-
can exporters and importers was
piled up during the fiscal year just
ended by the government despite
-TIi6 IN Ssi inn va.
ports, of the commerce department
tonight show.
This sum represents the difference
between the value of American goods
sold abroad and those imported into
volume of credit on which American
! business men, exporters and import
| ers, can draw in the international