The Washington times., 1922-03-20
ADF@S&g% ADF@S&ggS%rHHMH##s HH#s BUSINESS AND FINANCE ~5H%5
ISSUES ANALYZED
Copyright. 1892. by Cosmopolitan News
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Copyright. 1892. by Cosmopolitan News
NEW YORK, March 20.-While
the Government embargo on gold,
particularly for exporting was re-
moved about three years ago, the
activities Of the Federal Reserve
Bank officials In seeking to corral
the gold supply Of the country were
In no degree relaxed and gold con-
tinued to pile up at the banks and
at the central reservoir at Wash
ington. The voracious appetites Of
the Government officials for the
yellow metal was never satisfied
and they. carried their quest for
gold beyond all sensible limits.
Now the Treasury officials realize
their mistake and have announced
that there isn't any reason for con-
serving gold and therefore all re-
strictions relating to the movement
OF the precious metal. will be with
drawn. Gold will be paid out with
out restriction at the banks and
gold certificates available to all who
desire them. No attempt will be
made to control either the owner.
ship or movement of gold.
The piling up of a huge gold re-
serve at a time OF general relaxation
In the money market is not a wise
policy. Every dollar of gold In the
reserve banks is the basis Of IS in
credit. .>and the possibilities Of super
abundance Of gold are unlimited.
Gold in the banking institutions of
the country Is not counted as re.
serve, as under the old national
banking law.
The ordinary handler Of paper
money will hardly pause or inquire
how much Of it is bank notes, Fed
eral reserve notes, or yellow back"
gold certificates. AS a matter of
fact. II he looked carefully he would
find a constantly increasing number
Of the latter.
Economists have pointed out the
menace to the country of a huge
stock Of gold in the Federal banks,
and while there is no general de.
mand among the people of this coun-
try for gold coin to jingle in their
pockets, the issuance Of gold certifi-
Gates against gold in storage will
answer the same purpose and re-
move the danger of initiation. In a
short time the nations OF Europe
Will be asking for the return of the
gold shipped to us during recent
years. Can we offer any Just rea-
son why it should not go back?
The worlds total gold supply is
about $4,000. .000. 900. of which 3,000,-
100000 is lodged in this country.
Foreign cables are. on the whole,
favorable in their tenor today de-
spite the uncertainty over the Genoa
conference and the growing apathy
q England and France toward that
event, Of what use is IT, they say to
confer over world finances, and es-
pecially the relation of Europe to its
principal creditor, in the absence of
that creditor? British bankers and
business leaders are very much
gratified over the squirt in sterling
exchange. which restored more than
10 cents of the purchasing value of
the pound sterling in America. Eng-I
land Is greatly in need of our wheat,
cotton and raw materials, and is
now confronted with a delicate situa-
ton in international finance. High
sterling rates are as much of a han
dicap to exports as low rates are to
imports.
Lombard street is still considering
the possibility of the resignation of
Lloyd George, an event which the
business community does not con-
template with complacency. The
exchange value of the German mark,
in terms Of pounds sterling, has fal-
len from 1880 to 1112. the lowest on
record.
The strike in the Rand district has
not wholly cut off the imports OF
gold from the transvaal, though the
quantity was somewhat reduced dur.
ing the past week. The enthusiasm.
that has been prevailing in the
stock markets of London, Paris and
Berlin has disappeared, temporarily
at least. but despite the unsettled
political situation London is conf.
IDENTIFY looking for another forward
in gilt-edged securities.