The Washington times., 1934-11-03


an "un avor-
able balance of AzSS@S5#'
trade" which Lewis Haney
means that they cannot pay for
their imports by exporting their
own products.
But more important is the poll
tical unrest and selfish monetary
agitation which affects them. In
Belgium for example, where the
chief weakness lies. the govern
ment is having political Difficult
ties. And at the same time,
groups of industrial leaders" are
leaning toward "devaluation' as
a means of stimulating their ex-
ports.
These things arouse fear of cur
rency depreciation and tend to
arouse a boarding psychology
among the people, which is the
chief danger.
Accordingly, foreign specula-
tors have sold the Gold Bloc cur
rencies short, and this depresses
them further.
The reason why some Belgian
and Dutch industrialiSts favor
. depreciation of their curren-
cies is significant. They figure
that they will be able to cut
their prices abroad without sui
fering any loss. AS the belga
and guilder would decline in
exchange for dollars, our i'm
pOrters would be able to get
more belgas and guilders for a
dollar. Thus they could get
goods cheaper and would buy
more goods in Belgium and
Holland. At the same time, the
Belgian and Dutch manufac-
turers figure that they would
not pay any more of their cur
rencies to their labOrers, so
their cost of production would
not increase.
Thus they argue that their ex-
ports would increase, and their
profits Gin belgaS and gullderS)
would be maintained.
They seem to forget that their
nations, which are heavy i'm
porters, would have to pay more
Of their currencies for imported
food and raw materials. Thus
living costs would rise, and their
Akborers would suffer by reason
Of reduced real wages. This
would further increase discomfort.
It is not necessary that any of
the Gold Bloc nations should
"devalue," or go off gold. Not
even Belgium has to do so. They
all have ample gold reserves
against their note circulation.
If any of them should take these
steps, it would be the result of
political agitation or a desire to
experiment with export stimu-
lants as a temporary expedient.
It does not seem that any
large drain on their gold re-
serves is at all likely, unless their
own citizens begin to fear that
their governments will yield to
the money doctors, and begin to
hoard. In that event, "flght"
from Gold Bloc currencies would
doubtless develop, and would feed
upon itself. Restrictions on gold
exports might intensity this psy-
chology.
But the attitude of France so
far has been one of having more
gold than needed, and willing
ness to ship all that is required
to support the franc. She is also
helping Belgium with credits.
If internal "runs" or I'M
sound economic experiments
should induce these countries
to suspend their gold stand
ards, they might gain a tenn
pOrary advantage in exports,
although they could not hope
for even the small gains that
England and the United States
secured, and their internal
prices would probably be soon
raised.
There might be temporary
increase in their purchases of
our cotton and other products,
in anticipation Of the declining
purchasing power Of their cur
rencieS.
But their people, as consum-
ers, would be injured. And their
business, together with that of
the rest of the world, would be
greatly hurt by the increased un-
certainty and instability of cur.
rencieS.
The price Of gold probably
would rise and fresh stimulus
to gold boarding would be given
The day when chaotic cur,
rency and trade conditions will
drive the world back to gold
standard would certainly be
brought nearer.
COAL MARKUPS
Minimum price markups fol
sale of retail coal in four areas