Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-10-28
ECONOMISTS URGE
MAKING GOLD WORK
Statistical Association Told
D. S. Has Power to End
Finance Troubles.


own economic troubles and greatly
aneIiorate the financial Ills Of the rest
Of tire world by putting is huge stores
Of gold 10 work. was the opinion ex-
pressed By noted economists at q din
ner o. the American Statistical ASso-
citation held last night at the Ald!ne
Club.
Speakers on the subject Of The Price
Level 6lurnps Of 1920 and le3i-What
Caused Them" agreed that "the gold
standard has not failed = II Is admin
istration that has failed" Some urged
that the country's supply OF gold must
be diverted from bolgtering our over
stuffed dollar" and used TO back an
expansion Of credit by the Federal
Reserve.
Leaders Are Speakers.
e. W. Kemmerer. professor Of inter-
national finance at Princeton Univer-
sity and economic adviser to several
governments: Carl w. Snyder, Statisti-
clan OF the Federal Reserve Bank Of
New York: irving Fisher. professor Of
economics ~ Yale University, and
Lionel D. Edie, former professor of
economies at the University Of Chicago,
were among the principal speakers.
Prof Kemmerer said that current
explanations Of the present depression
as being caused in whole or in part by
abnormal gold movements are errone-
Gus. He contended that IL the Nations
yellow metal we're property put to
work conditions would quickly change.
Whatever may be the explanation
Of this last great and sharp decline in
commodity prices" said he, 1T Is not,
IN my Judgment, TO be found either in
= decline in the worlds gold production
or In a maldistTibution Of the worlds
monetary gold.
u. 8. Gain Largest.
'sMr. Snyder's valuable study Of the
physical volume Of production covering
the principal advanced countries Of the
world shows for the period 1865 to the
present time an annual average rate of
increase tgeometrical) of about per
cent for the world and Of about per
cent for the United States
According to the figures of the
United States director of the mint, the
worlds stock of monetary gold In 1921
was So TOO 600 900. If this stock were
increased progressively by per cent a
year. from 1921 TO the present time. It
would be approximately Sill 800 900, 600
for 1880. This is exactly what the
worlds stock OF monetary gold was for
that year"
The speaker explained that, obviously.
during the period 1921 TO 1929, the
worlds stock of monetary gold in
creased at approximately the same rate
as the worlds physical productivity
Under normal conditions" he con-
tinued, there would be no need of q
full per cent annual increase in the
worlds stock Of monetary gold to take
care Of q : per cent increase in the
physical volume Of business, because.
with continually improving currency
and banking organizations with in
creasing cooperation on the part of
central banks, with the increased use
of checks In business transactions in
substitution for coins and notes. and
with increasing rates OF monetary and
deposit turnover, the eficiency Of
monetary gold should be continually
increasing.
Ordinary Decline Slow.
"A scarcity of gold. should IL occur. :
would be likely to make itself felt in
a slow but continuous decline in prices
as It did in the years ls!S 70 1895
rather than in Q catastrophe drop like
the one we have just had after q long
period of comparatively stable prices"
Prof Kenmerer said America, on
the basis OF her proportionate share
In the world economic activity, should
have much more gold than any other
country. France, he added. had a
much larger proportionate share of the
worlds gold than the United States.
Gold had recently flowed to the Unit
ed states for safe keeping. he said.
He pointed out that the Federal Re-
serve Banks have until recently been
maintaining the lowest discount rates
I'm history In order to stop this flow
Of gold.
with business depressed. confidence
laclsng and with so many of our finan-
~ - ~. e..
have piled UP I'm the banks, and even
in private boards. because the people
who could best use them have been
afraid 10 do SO" he said Much of
our gold is practically idle. but it win
be put to work when people abroad
and people at home believe that 1t can
be put to work safely and probably.
Then II will be found that the supply
IS ample If the world organizes its
gold standard currency systems ON mod
ern scientific lines and places its adj
u1inistration in the hands OF men of
character and ability"
Urge Reserve Change.
Profs. Edie and Fisher urged that the
ent official policy and expand credit
facilities by backing them with gold to
curb the fall in prices.
The Federal Reserve system should.
believe" said Prof Fisher, have con-
tinued its open market operations.
namely. buying bonds Other technical
expedients are also available"
Prof. Edie said either the credit au-
thoritieS must adopt positive sane and
constructive policies" along the lines
of putting gold TO work or see the
radical forces Of discomfort make the
whole question foot ball of politics. ="
Mr.. Snyder dealt only with the sta
ttstics Of the gold situation, outlining