Show EXCESS GOLD I MAY BE PERil PERI Economists Point Out Danger of It Encouraging Encouraging ing jug Inflation HT srn Special of oC The COP right 1923 NEW YORK June Juno 2 Any 2 et- et tempt et-tempt tempt correctly to read the pres present ent Int financial and commercial sit cit situation u lt-u or to forecast the t must take tho Into account two contradictory StatIstics on on tho the Imports po Aid act CX- CX ex pOrt ports Ui for the tho month ot oC o April flub flub- Int this week welk showed surplus of oC Imports to the th amount of oC approximately Tb brought tho the total Imports surplus for or the first quarter of the tho dar ear car up to about 89 10 Now the tho economist ha ha hava 3 long ion beEn predicting Just su-h su a a so- so Sc 1 callE called l unfavorable trade ly I In Ith ith Europe debt to America they thoy th y pointed out o Iter only method ot of was Wa Wain wain In goods or pr services for voId sold 1 I In mount was not aH a able It had been b cn expected Ins this ad adjustment the ne nc ne tariff would delay One of oC the argument against high t rae will be that It mide the task USk of 0 pa mont ment monthly y our European more difficult The result re as a a shown that economic la law Is trong- trong er an u barrier This Tbt ThiIs i develop development Is an salutary ment mentS e S e must take tae the goodS good and Europe must dispose of o then them thenIa In Ia our market E EXCESS GOLD But But along with thIs thi surplus of o 0 Imports HO o 0 have to account tom for the tho continued Inflow ot of gold cold Foreign eign exchange quotations notably sterling testify testily that there thero Is no ac Immediate prospect of ot any turn In It Irth the golden eolden tide The Th hastily dra drawn n from Crom the th Import sur- sur surplus sur surplus plus that outflow of gold would result has haa no substantiation 01 oC facts Moreover the weekly state meat ment of ot the tha federal reserve bans shows bank shows an Increase In gold cold reserves reserve to a new nC high total for the S ss s- s stem tern tem Now it Is perfectly obvious that this condition cannot continue In- In indefinitely indefinitely indefinitely- definitely It Is also e evident Ident how how- however however however ever that the surplus of Imports Is not yet sufficient to balance the othe Items In the th trade account and It may be confidentially stat stat- stated stated ed that the best barometer con con- continues continues Unties to be be not the export and import fIgureS but exchange rates If then this weeks week's week course court of stem ster- ster linc ling flag exchange Is considered it WIll WIllbe willbe willbe be seen een that the th huco huO gold rold stir sur- surplus sur surplus plus F is h likely to stay with us for some time and must be recognized D OF INFLATION TIO It Is this excess of gold cold which the economists regard as trio tile great great- greatest e est eat t danger dang In encouraging Inflation InUa- InUa inflation tion They advance various schemes to avoid the apparent peril One On o hese Is to men men men- mentally tally earmark whatever that may maybe maybe maybe be a part of ot this gold cold as naturally and t belonging to Europe to which it must eventually return By Bv not cot regarding this gold cold as ae s a proper ba basis for tor credit expansion It is 13 argued that the temptation for such expansion will bo removed If f any such artificial restraint on business and speculation can be tet liet et up it III canI bo bB I contrary to all human c Even though the basis of oC computing ing log the th ratio were ware chang chang- changed chanced ed ed cit everybody would know that the excess gold cold whether segregated statistically or mentally is still here and would shape chap their affairs accordingly It must be admitted that the check to expansion resulting from the series of warnings nines broadcast by the banking authorities is ap- ap apparently apparently ap apparently an example of this very kind of artificial restraint It re- re re remains mains to be seen howe or ho 1 er ho ho long these will prove effective affective In the face of ot abundant credit PRICES CONFUSING I The price movement of oC the week has lia been confusing and for the most part meaningless e I Investments and bonds bond and finally reacted No one seem seem- seemed teemed ed Cd to feel sure sura about the ImmedIate lat late future of business although on the tho other hand no one antici antici- anticipates anticipate pates pate any serious reaction The SpeculatIve markets marets have havo simply reflected the pre alline cautIon The In Investment market moved more uniformly High grade crade bonds have been dull but firm So far the buying has baa been mostly for tor the tho account of oC dealers and traders trad r rather rother than genuine Investors But the tho trend tren Continued Is significant just the Same Con Con- Continued ease easo In mone flione must even even- eventually eventually eventually be reflected In higher hither prices for investment securities and It is 13 ison lion on this theory that accumulation of high hl h grade crade bonds has has- been pro pro- greasing At the same tame time the th buying has not been aggressive and there has been no attempt to folio Athe the market maret up As to business Itself outside the I reluctance to undertake new build build- buildIng build log Ing construction In New Hork ork andI anda and anca II a few other large eastern centers I ther has been little change chance Car Car- loadings Car loadings continue to make new high records although the be figures ures for general merchandise have de- de decreased decreased de decreased creased and It Is general merchandise merchandise merchandise dise v which Is taken as the tho best measure me-asure of trade d earnings statements have havo made very er ery fa favorable comparIsons comparisons comparisons with sith those of or a a year ago I Grain prices are aro slightly under those for a week weel ago Copper and lead are aro distinctly weaker The Th federal Cedera I reser e rd bord reports the outlook good despite what they de- de declare clare dare to be a a a slackening of arth activities Most of the self self- appointed business doctors agree agre with this diagnosis |