Evening star., 1937-07-04
GR0PES
FOR CLUE FROM
STRANGE FACTORS
Labor Strife, Gold Enigma
and Sinister European
Trends Watched.
USUAL TRADE SIGNS
MAY BE MISLEADING
Some Observers Refuse to Accept
Present Reactions as Only an
Interlude in Recovery.
BY CHARLES r. SPEARE.
rectal Dispatch to The Star.

srecial Dispatch to The Star.
NEW YORK, July "a prolonged
and progressive movement toward
higher volumes OF production or of
prices, in industry, in trade, in securi-
ties and in commodities, is quite likely
to bring about. from time to time, a
halt OF varying degree
For technical reasons. securities and
commodities will react from what may
appear to the speculative or invest
ment public too high range of mar
ket values.
Production may outrun consump-
ton. Business sentiment may be af-
fected for divers reasons This Is
all in the normal course Of CONNER
cial and business life.
The situation today is not normal.
What has happened in the last six
months has been a result OF factors
new and strange to the American
people, and which have introduced ele-
ments of profound anxiety respecting
the future.
We have been having, during the
half year, the most serious labor trou-
bles OF this generation. They repre-
sent. as one writer has described them,
an entirely different social and eco
nomic atmosphere from that to which
the American people had become ac-
customed
In this same period. the state Of
the Nations finances has become more
complex than ever before The So
called gold situation is unique. It's
eventual trend puzzles economists
throughout the world Close to the
foreground of this extraordinary con-
dition OF affairs is the sinister political
and financial outlook in Europe.
Future Is Uncertain.
II it were not for these new influ-
ences that now take such a prominent
place in all discussion of the business
life OF the country, one might be WILL
ing to accept the different sets of re-
actions in trade and In finance as
only an lnterlude in an era OF recov-
cry and expect to witness a rebound,
IN production. distribution and prices,
"lIllui lew months
And there is a considerable number
OF trained observers who do not an
tlcipate resumption of the forward
movement in all branches later this
year, although this is associated in
their calculations with a considerable
degree OF credit imitation. This con-
fldence, however. it must be said. is
not SO strong as 1t was month ago
for the spread and violence of the
labor disturbances and the lack Of So
luton OF the gold question inject two
unknown quantities into the situation
that may reverse all previous calcu-
lations.
Soon after the beginning of the
year, the influence of the c. I. O.
In the labor market began to be felt
1t has since grown more positive The
Slt-doWn' strikes in the motor in
dustry demoralized 1t for weeks with
out having a great deal of adverse
e1ect either on general business or on
the price of securities. About the
same time. the huge rearmament pro-
grams in Europe began TO make their
impress on commodity prices here
They also stimulated great activity in
certain industrial lines.
Comes to Surface Later.
1t was not until the labor troubles
entered the field of the Independent
iron and steel companies, after the
United States Steel Corp. had made
its bargain with the c. I. O., that
the seriousness OF the conflict not
only between labor and capital, but
between one element in labor and an
other element, came to the surface
At this writing, it Is impossible to
forecast the lengths to which this
may go in the next six months, or
what sort OF bearing it may have on
the country's business. Mass move
ments OF labor, leaderless and un-
trained, are as difficult to gauge as to
their effect on business as was the
effect OF mass production of goods, in
its earlier stages. on employment.
For several reasons foreign countries
have been sending their gold in large
amounts this year to the United States
Some of it represented the only means
available by which payment could be
made for goods. services and securities.
Another portion was exported here for
safety in the event of foreign wars.
The most active movement OF the
yellow metal and the most disturbing
to the administration and to the
American banking interests, has been
that of recent weeks, when de
boarded" gold has been coming to
New York in large quantities in the
belief of its holders that the United
States Government proposed to re-
duce the price of gold in order to check
the export fever. This gold now held
by the Treasury is approaching ST.
00o,00O,0OO.
Rise Above IL Billions.
The total gold holdings of the United
States have risen above $4,000 ,000,-
900. 1t is estimated that, In the last
three and a half years over S5,000,-
100000 in gold has been sent to the
United States because it could be sold
here at $35 an ounce. To appreciate
what the Treasury gold holdings
amount to. it may be said that their
dollar value today is greater than that
of the gold held by all of the banks
and governments in the world in
1929.
Just as the relief expenditures have
(see sPEARE, Page D-8)