The New York herald., 1922-01-23
Premium Attracts Gold.

In this country, the statement de-
| clared the situation was unfortunate
because the high premium on American
exchange has attracted the gold flow
of the world, resulting in overstocking
beyond currency needs and a surplus
earning no interest and serving no USE
ful purpose.
''The United States,' the statement
said, "feels 1t to be to it's own interest
that this gold should be utilized In for
eign channels, and also that 1t be re-
distributed. From an economic point
of view the method of utilization is by
| the investment of capital abroad. The
method of redistribution should be
through loans for reproductive enter
prise and by specific gold loans to
| countries which are in a position to
undertake the reorganizations of their
currencies on a gold basis. The United
States section regards it as mutually
desirable and profitable that capital
investments should be made in the other
American republics where national
credit rests squarely on stability in the
so ocial order"
Responsibility for the disordered
world exchange situation was attributed
by the statement to dislocations still
existing in the whole international
ments of the international price struct-
ure. The exchange situation. the Amer
lean section asserted, would improve as
the worlds economic recovery, espec-
tally in Europe, goes on, and partic-
ularly as price distortions disappear.
Dissertation Impossible.
It is impossible, the statement de-
clared, to dissociate inter-American eX-
change relations from the European re-
lation, as the European American bust
ness fabric consists OF q triangle, one
point resting in Europe and the other
two in North and South America" So long
as the European point of the. economic
triangle remains unstable, the state
ment declared, stabilization of Inter
American exchange will be difficult.
"A review of Europe's situation" the
statement said. draws us to the in
evitable conclusion that there can be no
sterilization of exchange upon any foot
ing until there is a cessation of inffa-
tion in the principal Continental States
Irritation is the result of unbalanced
budgets, which themselves are the re-
suit of the necessary expenditures upon
reconstruction. the unsettled situation
OF German reparations, the maintenance
OF land armaments, and increasing
debts. The disturbing forces are indeed
predominantly European, and while
Europe has made great progress in
Agricultural, Industrial. social and
political stability since the war, the
fiscal situation continues to disrupt ex-
change with great severity"
No hope of stability in the worlds
exchange can be held out the statement
declared. until German reparations are
calculated on n basis within the prac-
teal power of the German people to pay
and the reduction of land armament on
the Continent of Europe necessary for
economic stability has been effected.
"The situation In Russia and eastern
Europe" the statement continued. 'has
also a bearing upon the problem. The
total extinction of economic productiv-
ity In Russia from an export and i'm
port point of view. seriously deranges
the economy Of western Europe. The
slow healing OF the economic disruption
due to the creation of new States can
not be ignored"