Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1924-03-31

CIdl fOuClcS@1OOu ITOSTCSS III
Post War REIMBURSEMENT
Washington. March 30-The Unit
ed States has taken on a new re-
sponsibility in it's relation to world
economic affairs, in the opinion Of
the Federal Reserve Board which in
its annual report made public today
indicates a belief that increasingly
greater influence on world economic
progress will emanate from these
shores.
The great influx Of gold into the
United States which now has four
tenthS of the world monetary stock,
the growing use of the American dol
lar with it's gold standard as a trade
basis, gradual expansion of Ameri-
can foreign trade, the adoption by
many foreign interests of American
trade and commercial policies-these
and other reasons-are cited by the
board as showing the responsibility
that must be borne and accounted
for by the leaders in the United
States.
Since the federal reserve system
is accepted as charting the business
course at home, it's correspondingly
increased power and responsibility in
the larger field is examined by the
board in its report, and it has set it
self to the task of explaining the
peacetime functions Of the system.
1t.indicates belief that the general
conception of how. the system can
give full force and effect to it's char
tered powers of aiding commerce and
industry is too limited and makes a
definite move toward a policy of pro-
mitigating such information here
after.
| The year 1928 as a whole has pro-
vided a good perspective of post
war reimbursement. and the board says
of conditions that economic readjust-
ment has proceeded rapidly, land is
now nearing completion" This con-
dition, a near-peacetime basis, has
caused the board to omit from it's
report the usual discussion of adj
ministrative matters and to turn it's
full attention to discussion of the
F! broader aspects of the workings of
the reserve system.
1.-THE year covered in this report"
! it says, lis of more than ordinary in
terest since it has afforded on oppor-
| tunity for the federal reserve sys-
! less Influenced by conditions arising
out of the war than any previous
year. In the absence of those ma jor
| disturbances which SO profoundly
| affected business and credit condi-
lions during the war and early post
war readjustments, federal reserve
credit policies, in response to pre-
; vailing economic conditions and on
the basis of earlier experience, have
undergone a fuller development.
THE volume. character and occa-
sion of rediscount operations and
open market transactions Of the
federal reserve banks, the extent and
influence of gold movements upon
the credit and currence situation,
rate policy and the basic factors
underlying general credit policy
| these and other related matters that
! will be of continuous Importance in
! the future have held an important
place in the year 1923 in the func-
/ tioning of the federal reserve banks
and in the deliberations and deci-
sions of sits governing authoritie.
| 80
j Taking the year as a whole and
regarding it in the perspective of
the postwar readjustment period,
| there is abundant evidence that, so
far as the United States is con-
cerned, economic readjustment has
been preceding at q rapid rate and
! Is now nearing completion. The eco
nomic balance as between various
! industries and sections of the coun-
try is not yet fully restored but dur
ing the past two years there has
been rapid progress in the direction
of more stable equilibrium and Of
| better alignment of prices between
! diffnrnnf
Turning to the question Of gold
movements, the board says great
concern is manifest because of their
probable future extent and direction.
1t says that no future inflow such
as that that has taken place can be
expected because of the restrictive
measures taken by the European
powers which are designed directly
to control gold exports from their
territorial jurisdictions.
Then, too, the board asserts that
in international trade gold has main
tanned it's conventional position
throughout the decade of currency
disorganization and with the grow
ing necessity for common basis for
calculating commodity prices there
has been a marked tendency to
equaliZe values on the basis of the
American dollar because of the gold
that backs 1t.
"Thus," the report adds" the
American dollar has become the link
between countries on a paper cur
rency basis and the gold standard.
an this adjustment the American
dollar, not only because of its con-
variability into gold but because of
its stability and because of the trade
position of the United Estates. has
become increasingly the unit of ac-
count in international trade"
BY virtue of the vast shipments of
gold to the United States during and
since the war. this country has as
sumed the high responsibility of
managing the vast stock domiciled
here. that it may be available for, re-
distribution" by export or otherwise
as occasions arise This situation,
the board adds, warrants serious
thought for If the power thus con-
centrated here is improperly employ
ed 1t may result in disturbances in