Evening star., 1932-08-07
BY WILLIAM HARD.

Is it Just another false dawn Or
this time-will the sun really rise?
These are the business thoughts that
torment Washington at this week end
and give it fever of hope and an
ague of fear.
For the first time since the begin
ming of the depression the underlying
monetary conditions for prosperity seem
to have been genuinely 1roned out to be
smooth and firm.
The run on American gold from
abroad has ceased. The dollar Is reign
ing strong in the exchanges. Gold is
again. It is true that we still have less
gold in the United States than at the
beginning Of the depression. Then our
gold stock was four billion three hum
| dred million dollars. Now 1t Is approx.
mately only four billion. We have sus-
| tanned a net loss of some three hundred
million-but of only some three hun
dred million. At the beginning OF the
depression the best expert opinion was
that we had too much gold. There can
be no opinion now that we have TOO
little. Foreign opinion in our stability
has revived, and foreign money Is again
|
Foreign world circumstances mean
while have exhibited an upward move
ment on their own account. The repara-
tions question is settled, irrespective OF
any "gentlemen's agreement" among
the allied governments conditioning the
ratification of the settlement upon
American revision of European debts to
the United States. Nobody in official
position in Europe dreams that the
Lausanne agreement regarding repara-
tionS will fail to be in effect ratitled.
Nobody dreams that Germany will ever
pay more than the Lausanne agreement
provides. The reparations question has
definitely disappeared, and the inter-
national financial consequences are VlSl-
BILE in the New York stock market.
German government per cent bonds
have gone up 26 points over their low OF
the earlier part Of this year.
x
Similar improvements are visible else
where on the international financial
map. The credit of Australia has been
among the worst hit credits in the
world. Now the Australian govern
ment's per cent bonds have recovered
by 81 points. Even the bonds of the
Brazilian Province of Sac Paulo have
recovered by 10 points. The policy OF
Britain has had much TO do with the
easing of the international situation
and the restoring Of international con-
fldence.
The departure of Britain from the
gold standard and the consequent
cheapening of the pound in terms OF
foreign currencieS have made 1t i'm
mensely easier for foreign borrowing
countries to pay their immense an
nual interest charges to British in
vestors. Now the British government
has almost completed the conversion OF
dts ten-billion- dollar war loan (par
value) from a debt carrying 5 per cent
to debt carrying 31a per cent. The
tightening of the debt burden Of the
world has been greatly advanced by
British governmental monetary action.
X
A year ago this country was shiver-
ing under the shock of disasters abroad.
The foreign sky today is relatively clear.
There are some thunderS in 1t, but even
the most apprehensive observers can
hardly discern in it any more chances
for any more great lightning strokes
falling upon American business. Our
problems now become-in that degree
increasingly our own and dependent
more than ever upon our own resource
fulness.
In the view of political leaders In
Washington-and of business leaders
visiting Washington-it is precisely ouT
resourcefulness that is in question. Our
resources, not only natural and indus
trial, but monetary and financial, are
still Stupendous. The resourcefulnesS
for the using of those resources Is the
point in doubt.
The Federal Reserve Board has re-
Gently noted that the deposits Of indi-
viduaIs in our national banks are TO-
day-in spite of the depreSsion-vir-
tually equal to what they were IN 1924
, which was not Gin retrospect bad
year In other words, our individual
resources as expressed in our bank de-
poSits, are virtually as large today a;
5 they were when In 1924 We were full
of confidence and thereupon full oi
activity.
? Meanwhile our deposits in savings
institutions have expanded enormously
They have expanded even in the course
, of the depression. Two years ago, fol
!. instance, in New York State savings
t dollars. Today they are fve and q
quarter billion. The deposits in posta-
savings banks throughout the country
two years ago were one hundred ant
seventy-fve million. Now they are
seven hundred and Seventy-five million
X
These colossal figures are striking
evidence both of inherent power anc
Of tie ncn-use Of it. That contrast
between powerful strength and impo-
e tent inaction comes to certain amaz-
= ing exhibition in New York City. Tht
. individual deposits in New York City
national banks are today approximately
at the 1924 level. but the rate of annua
turnover in the funds thus represented
has fallen from sixty to thirty.
Or, to present the same picture or
a national scale:
t Total individual deposits in nationa
r. banks in the United States have toda!
= fallen only 4 per cent in comparison
with 1924, but total bank-check pay.