The Washington herald., 1921-10-12

I1CIdiu ENOhOhiotsJ
the Netherlands s1.0S5.0oo, with less
than s315,O00 from any other Eu-
ropean country. Europe as whole
furnished over s5i 100000 of the
total of s64.0oo.0Oo imported during
the month Of July. or the other
sections Of the world British India
provided over 100000, China
about 100000 and Australia $3,-
100000.
The chief export movement OF
gold was to Sweden, amounting to
over s2.60o,000, with smaller sums
amounting to less than 100000 to
Mexico. Canada and China.
This heavy import movement of
gold has stimulated discussion and
some uneasiness as to its effect
upon our price level and whether
we will be able to maintain our ex-
port trade in the face of this con-,
slant depletion OF the gold reserves
of foreign countries. Since January
/, 1921, we have received a net ex-
cess of imports Of over $500, ,9O7, 900.
A review of the statistics of
earlier periods show that during the
years 1914 there was a gold
balance against the United states
of s45, ,40s,o 900. During the fve
years 1914-19 the gold balance in
favor Of the United States arose
from s9s3,70S,000, while since the
beginning of 1921 the net balance
has swung the other way to such
an extent that our net imports Of
gold since August l. 1914, amount
to over 4,63s,00o. "
Foreign governments are making
every effort to maintain their CEN
tral gold reserves and the result is
that gold has largely concentrated
IN the hands of the government
controlled agencies and practically
no country outside of the United
States is said to be on a strictly
gold basis. The changes Of gov
ernment gold reserves in most Of
the European countries show an In
crease for present compared with
1913, but this Is merely the result
Of concentrating the gold In govern
ment Institutions and withdrawing
II from circulation so as to use II
as a basis of currency and for in
ternational gold payment
The latest financial statistics for
several countries as reported by the
Federal Reserve Board show the
following: In England the coir
and bullion held by the Bank OF
England and the National Treasury
has remained stationary during this
year at about l57.000,000 pounds
sterling: In France the gold re-
serves have increased slightly
from 1866. 100000 to 3.574. .00O, ,00(
francs from March to August. Like
wise the reserves in Sweden, Italy
and Germany show a slight change
up to August. Japan reports a de-
crease in the specie reserve from
about 1.235. 100000 to 1858, 900. O0(
yen from January to June.
When the United States golt
stocks were being reduced a veal
ago some discussion arose as to the
need of stimulating gold production
which declined sharply during the
period of high prices when golC
mining became relatively unprofit
able.
The peculiarities of gold produc'
tion from a profit standpoint de.
pend upon the fact that the market
price of gold Is fixed by the gold
standard of the country. An ounce
of gold is worth s2O.67 or putting
II another way. the fixed gold dol
lar contains 2322 grains of gold
This price, established in 1897 wher
we adopted this particular weight
amounts in effect to stabilizing anC
fixing gold prices, consequent!
gold does not respond to the Law
of supply and demand as do othel
commodities. When prices in gen,
eral rise and the dollar has les
purchasing power. the profits II
J gold production shrink, because tn,
J costs Of gold mining are increased
for the producer while the market
for his product remains the sam,
in terms of dollars.
Legislation has been proposed Il
stimulate gold production by pro
viding an excise tax on domestic
consumption of gold in the manu-
facture of gold in the arts whicl
would be used as a bounty to golt
producers in the form of a premium
/ for new gold.
The monetary gold of all tn,
: countries in the world is wortl
; something like $4,000, oOo, 900. Prod
uction from 1919 to 1916 wa
around $3.50, 900, 900, of which sbou
s92,00O.000 was produced in tn
United States. Since the beginning
of the war, however, our produc
tion has decreased until for 1920
/ was aDOut S40,UOU,UOU. Ine ROl
, used in manufactures and the art:
as well as coin destroyed, etc
, amounted to about $4,000, 900 /,
. the United States in 1919, conse
quently production has not bee
keeping pace with consumption an
, Judging on this basis our gold re
serve has been depleted in recen
, years II we leave out of consider
atipn the balance of imports in ou
. favor.
: These balances must necessaril
, /, be reduced in the coming years
trade relations are maintained an
: foreign countries return to a gol
! basis. Hence, there is some argu
ment for restoring our gold produc
!, tion or at least keeping IL on a pa
with the pre-war rate of produc
tion compared to other gold-produc
!. ing countries. If the general pric
level drops back to the pre-wa
level this will be automatically ad
justed since gold mining will agai
become profitable in the Unite
States. but the present upward turl
of prices Is regarded by many a
an indication that we are to re
| roatn ,,pop n bi0har level for Rono