Evening star., 1932-05-30
BROKERS WORRIED
|. BY GOLD OUTFLOW
Wall Street Traders Keep in
Close Touch With Tax
Discussions.
Special Dispatch to The Star.

Special Dispatch to The Star.
NEW YORK, May 30.-Although New
York banks and exchanges were closed
today In communication OF Memorial
day, many bankers and brokers kept in
constant touch with Washington to
learn the outcome of the tax discus
sions there because of their possible
effect on the current drain of gold from
the United States and the fall Of the
dollar over the week end. Should the
tax discussions lead to a quick bal
ancing Of the budget, they would at the
same time put an end to the gold
efYlux
A net loss OF SOC, ,757 300 of gold. the
series Of unpleasant financial events
the New York market in the past week
This latest movement has brought the
total Of efflux to $284, 1886, 900 since the
metal movement was resumed on April
IS. As result Of these exports Amer
lean gold monetary stocks now total
-, ,207 ,0O0, 900, . loss Of IL per cent
since this time last year.
Imitation Talk Fans Fears
This gold now comedies with fresh
foreign fears for the stability Of the
dollar. These fears have been famed
again by congressional talk Of "infia-
tion," which Is like deadly poison to
Europe. Such imitation fears" were
spurred by the passage by the House
Of the Goldsborough bill, discussions OF
soldiers bonus to be paid in newly
issued currency and proposals of huge
Government bond issue for uemploy-
ment relief The foreigners fears also
fad hx-
sional failure thus far to balance the
budget.
study OF the weekly Federal Reserve
System statements during March, OF
shortly after the passage OF the Glass
Steagan bill and the systems in
auguration of its Government security
buying program, reveals q slight in
crease In gold stocks. Discussions about
the Goldsborough bill which was passed
by the House May 2, and which the
Senate Committee on Banking and Cur
rency is considering this week, engen-
dered inflationary fears, so foreigners
renewed their gold Withdrawals.
Note Circulation FigureS
The manner in which the Glass
Steagall bill is operating is indicated by
the reserve systems statements on
March % and May 26. On the former
date Federal Reserve note circulation
totaled $2.822, ,755 0O0 1t was secured
by 756 per cent gold and 244 per cent
commercial paper. On the latter date
reserve note circulation totaled $2,758,-
223,000. 1t was secured by rs per cent
gold, II per cent commercial paper and
per cent by United States Government
securities.
Since early discussions OF the Colds
borough bill began or between April IS
and the present, $284, 1885 900 of gold has
been exported. despite betterments in
other directions, brought about by the
Glass-Steagall act, the open-market
purchases Of Government securities by
the reserve system, the work of the Re-
construction Finance Corporation. and
anti-hoarding campaigns which have
caused circulation to decrease.
Wall Street believes that the quicker
the budget is balanced, by the passage
Of sales tax or otherwise, and Con-
gress adjourns, the better off this coun-
try will be because the foreigners fears
of imitation will be allayed and the gold
export movement will naturally subside.
tcopyright. is32)