The Carbon County news. [volume] (Red Lodge, Mont.) 1924-1931, 1925-09-03

MA. Trsv,or ponds not little on
that gold.
The farmer sells his wheat to the
elevator man and yet the real buyer
in mar cases. is an Englishman a
Frenchman. a German. or an Italian.
About one-third of the wheat crop Is
usually sold abroad and this part Is
large factor In fixing the price of the
entire crop. Between the farmer and
the foreign buyer there are many
steps. In recent years the most I'm
portant step has been that at which
the foreign buyer has to pay the
American exporter. for the interna-
tional mechanism of payment has
been badly out OF order because
Europe was off the gold standard II
was just as though an English buyer
drove un to your farm house. bar
gained for your wheat and drew up
the contract But when you discussed
payment. he said: I'm sorry | haven't
any good United States money to pay
you with: I'll have to pay you In my
English paper money. which isn't
worth Its face value in gold don't
know what II may be worth next
week. but that is your risk"
/ A Deadly Foe of Trade
How many would be willing to sign
! contracts on this basis7 Yet that is
| the way most OF the worlds trade has
had to be carried on since the ARMS
tice. In practically all countries ex-
cept the United States the currencies
have had no fixed value In gold. but
have changed In value from day to
day. Whenever one country sold any
thing to another country. somebody
had to take the risk OF loss because
the value OF the money might change
before payment was made. Such I'M
certainty of payment is a deadly foe
of trade. and people were afraid to do
| any larger International business than
1 they had to.
Exports of food stuffs from the Unit
ed States fell from two and a half
billion dollars In 1919 to eight hundred
millions I'm 1928 and the difficulties of
European buyers In making satisfac-
1 tory payment for American farm prod
ucts was one of the large factors In
the drop in the prices OF farm prod
ucts. But now the recent action OF
Great Britain In declaring that 1t will
again redeem its paper money In gold
means that British buyers of American
49, fsNv hay trffh fsr~ oxf
which is accepted the world over at Its
face value In gold. With the return OF
Great Britain to the gold standard, a
majority OF the countries Of Europe
have paper currencies equal to gold
How Reserve Banks Helped
American bankers have assisted In
the British return to the gold standard
by giving s1oe 900 900 credit to the
British government. But more impor,
tant than this was the action OF the
Federal Reserve Banks In granting the
Bank OF England material co-opera
ton. They placed 5000. Oeo,o 900 gold al
} the disposal OF the Bank OF England
for two years. to be used by It. II nee
: essary, in maintaining the gold stand
ard. The readiness of the Reserve
. Banks thus to cooperate was an i'm
portant influence In the willingness Of
the British to take this all important
step.
This action OF the Reserve Banks
was q most constructive step In aid
Of American farmers and producer,
who will benefit greatly by the re
, moval OF this element of uncertainty
from their export transactions II al
the sins OF omission and commission
: charged againts the Federal Reserve
i System by banker. business man. Tvs
stock man or political blatherskite II
the last 1--WE years were true. and prac
ticalfy none Of them are. the service
rendered commerce and industry b,
the System In connection with the res
toration of the gold standard In &C
large q part OF the world would fal
{ outweigh any mistakes that those In
, charge of the System may have made
, No banker. business man or farmer
should permit any self serving declar
alton by favor seeking demagogue Il
swerve him from determination te
see that the System is maintained fol
! the future welfare OF the country.
/ Fundamentally conditions are ver,
sound and We are doing very
large volume OF business. no little par
OF which Ia due to the eqaalixing ant
stabilizing effect exercised by the Fed
4 eral Reserve System on the credits o
4 the country. Throughout all the stress
of the last FIVE years there have beer
no times of either. stringency or pie
thorx OF hank credit Rates have rur
along on rather level keel and II
my Judgment have had much to d.
with the stable volume Of bushes,
a which We have enjoyed. and which /,
, quite contrary to the old experience O
. this aftermath OF panics. With credi
structure such ~ only the Federa
Reserve System can guarantee, L fee