Evening star., 1923-08-18

awoke the goods trade to compare
tive activity again. The increased ex.
pense WHICH. the steel companies Will
be under as they shift from the
twelve to the eight-hour day will
probably lead to higher prices for
steel.
At least they insure against any
reduction. and this strengthening OF
the price outlook has had Its effect
in making steel consumers more
anxious about their future supplies.
Even with oil, which has been the
particular weak spot. the drastic
speed up the necessary readjustment
AS the Standard Oil president pointed
out, the present situation has result
ed from comparatively small
amount Of selling by companies
! which were unable to hold on: there
fore. 1t should not last after this
forced liquidation is over.
United states Records Trade Balance.
The July figures on the foreign
trade showing a balance of s26.000.-
600 in favor of the United States
were an upset to some very pretty
theories. When earlier in the year
there was large excess OF imports
over exports writer's of the academic
type were found saying that foreign
countries had begun to settle their
current debts i'm goods instead of In
gold and securities" Another corol-
larry idea was that. being creditor
nation, we were in the position that
England has been in for the last
three-quarters of a century. where
We were likely to have permanent
excess of commodity imports In re-
turn for the interest on American
capital loaned abroad.
1t will be interesting to see how
the proponents of these theories at
tempt to square themselves with the
July returns. In the meantime the
\ l.
ports of the spring which swung the
trade balance against us were merely
temporary incident OF the short
I, lived domestic boom. Our export
trade has dropped very little com
parati.ely. par, vel ooo ont 1t was down In July
March. But imports during the same
period decreased s114.0O0.000 and it
| Is this which tells the story.
Gold Imports Increase.
In consequence of the reversal of
the trade balance gold imports are
! again on the increase. England with
| in the next two months has To set up
| credit against the next senli-annual
| interest on the American war debt If
/ she cannot do this throuR The In
! creased sale of goods or through the
| sale of her own securities to Ameri-
| can investors, she must rely largely
/ on transfers of gold. This threatens
! to bring up again the problem of
| gold inf1ation.' which was SO keenly
! debated six months ago. I. was fear
| ed then that the enormous unused
supply of gold in the reserve bank
! would be temptation 10 speculation
and overexpansions. But anxiety was
relieved when the Federal Reserve
| Board issued it's warning and made
! it very plain that if trade and secur-
| ity markets kept on as they were
| then going. II would lead to drastic
| measures in the shape of increase in
, the official discount rates.
! In, Europe the situation has quieted
, down. at least temporarily. Every
| thing is awaiting the sequel u tie
| change in the German government
! and whether new proposals Of peace
! from Berlin will be met by any con-
! cession from Paris. Those who believe
that France, on the pret .Xt IF hold
! ing out for full reparations. is really
! aiming at crushing Germany. are yerJ'
! skeptical on this score. Meanwhile
! French writer's and politicians con-
| tinue TO maintain the abs lrd proposi-
| ton that the decline in the franc 20
/ the new low ground is due t. British
manipulation. They have nothing to
| say as to how, in the III ru Of the
! world outside. the future value of
! the French monetary unit appears.
when il Is no longer conceded that
/ France will be able to collect indem-
! nifty sufficient TO cover her great treas
ury deficit