| Show World Monetary Developments By Frederic Frederk J. J Haskin WASHINGTON The The last few week have seen stirring developments developments develop develop- ments meats In world banking and monetary monetary mone tary affairs as stirring in some come ways as were the developments o on the outbreak of the World war and those which immediately preceded preceded pre pre- preceded ceded the declaration of the famous Hoover Hoo moratorium So SQ fast sst has communication become come so intimately intimately inti tnt conne connected ted and so interdependent interdependent pend pendent nt the banking arrangements and the currencies of the world that no longer can a nation act alone llone The repercussion of every financial move are almost uni uni- uni- uni versal verval When five Justices of the supreme court of the the- United States before a watching world handed down a majority opinion in the gold clause cases upholding the right of congress congress congress con con- gress to fix arbitrarily the validity of ot gold contracts In bonds and other Ins instruments there were movements on every bourse and In Iner r e every exchequer The decision waS waSa was wasa a 1 blow at the integrity of gold Jold contracts contracts con can tracts and that decision dedsion caused or partly caused the departure of Belgium from the g gold ld standard As Bel Belgium lum was a m member of the gold Jold bloc of Europe which had been holding steadfastly to the standard the whole bloc was in some degree affected Irritant and Sedative e Money Is one of the most mysterious mysterious mysle rious things in the world Its Influences are insidious Only the keenest keenest keen keen- est cx experts can predict what will vill result from a given cause or set of causes But one rule is often re re- liable When the price level of a country rises together with costs and perhaps wages thus causing a falling off oll of exports be because of the dear dc market and the Increase of imports because of cheaper foreign foreign for for- eign markets thus unbalancing the trade and when budgets become unbalanced and arid unemployment occurs occurs oc oe oc- oc curs departure from the value high standard is likel likely Also when a country engages in inactive In Inactive Inactive active foreign financial dealings of ofa a more or less speculative nature and foreign confidence is Imperceptibly Imperceptibly imperceptibly imper Imper- impaired with resultant withdrawal of funds then too the value high standard must be suspended suspended suspended sus sus- sus- sus as a sort of combination irritant counter-irritant and sedative When Belgium went off oft gold and then devalued the belga International international international financiers became more convinced convinced convinced con con- vinced than ever that international currency stabilization is imperative and the world is looking to the United States to take the initiative Therefore the money history of Belgium in the last few weeks may have a marked effect on American policy Swiss Referendum These movements are expected to bring Belgium a sudden augmentation augmentation tation of riches With the belga devalued devalued devalued de de- de- de valued it now is practicable for other countries to buy in that market market market mar mar- ket at on advantage and this should early swing the trade balance back to a position favorable to the king king- dom dorn The tourist season is beginning beginning begin begin- ning and Belgium being a favorite ground for tourists there almost certainly will be a heavy he-avy influx of tourists swelling the Inflowing tid tide of money and exactly reversing revers revers- lag ing the tide which flowed out before before be be- fore devaluation It is expected that Belgium will have to employ an exchange equalization fund just as Britain and the United States have havedon done don to prevent too rapid an appreciation ap ap- ap- ap predation n of the belga June 2 has been s st t as the thc date for tor the Swiss referendum on the gold standard question For the first time in history a government has submitted to a popular referendum referendum referendum refer refer- the question of whether it shall remain on or go off the gold standard It is quite possible that despite French arguments Switzerland Switzerland Switzerland Switzer Switzer- land will go off olt for that Alpine land is ever eager t to attract every possible tourist and the cheaper the Swiss franc the more tourist trade will be entertained this sea sea- son Switzerland has for tor many years been a sort of refuge for tor panic money When financial conditions have grown unstable In other countries there ther has been a Q flight of f capital to Switzerland So much gold ha has s accumulated there that the gold Jold reserves carried by the Swiss banks with the Swiss S s National National Na Na- bank have actually exceeded the entire Swiss note issue This must b be contrasted with normal reserves reserves re re- serves In other countries of 0 from 20 to 40 1 per cent behind note Issues Just how this foreign panic capitAl capital capi cap tal would be affected by departure from the gold standard remains to tobe be bc seen That there will be strong effects can not be doubted From France come both official and unofficial assurances that hat France Franc is determined to remain on the gold standard but In spite of the ph gold stock held second only to the fabulous stock of the United Sta States the hard times there with Internal political dissension dissension dis dis- dis- dis sension may moy cause a break at any any anytime time China anc and the Silver BoomI Boom Doom DoomA A I I fascinating example of how a amere amere amere mere proposal In a far country may affect acted world affairs is furnished by bythe bythe bythe the Thomas amendment A single United States Slates senator from one of the important though lesser states started a fresh silver boom the world over The action of President Roosevelt in heightening the price at which the United States Stales would buy silver last August pre precipitated th the worst depression ion in China in iii years The Thomas Thom S amendment proposing to 0 raise silver sliver to a currency currency currency cur cur- rency position intensified the silver silver silver sil sil- sil- sil ver boom and deepened the Chinese Chinese Chi Chi- nese depression The Thomas amendment did not carry but the damage in China had been done while meantime silver brokers inmany inmany in inmany many countries had rea reaped d big profits proms as well as steamship companies companies com corn panics express companies insurance insurance ance companies and smugglers engaged engaged en en- aged in smuggling silver out of China in large quantities It is predicted in some quarters that the outflow of silver from China in spite of the Chinese embargo embargo embargo em em- bargo upon it may force China on the gold standard Here again an important American effect ct Is seen Secretary of the Treasury has announced that the United States Slates has all the gold cold it can use and sales have been made to Mexico and ond Guatemala with more sales In prospect It is considered not at all out of the question that what with the newly Increased price fixed 1 by y President Roosevelt on silver and what the London the great British financial authority calls The United Unit Unit- ed States' States sudden and violent espousal JI of the ca cause se of silver this country might purchase large quantities quantities quan quan- of silver from China paying for it il with gold A it Complicated Puzzle While China has not had exactly what could b be called a silver standard standard stand stand- ard still Chinese currency has been linked to silver These fiscal ical end and monetary developments spanning the globe conceivably might result in the fantastic re result ull of oC a silver or at least bimetallic standard in inthe inthe inthe the United States the traditionally gold standard country and ond a gold old standard in China the traditionally tradition tradition- aUy ally silver sliver country Meantime India the other great silver using country which has been steadily losing silver sliver to the United States beginning April 1 1 started a reserve system based somewhat on the American system and on at least a partial gold standard standard stand stand- ard reserves consisting of a combination combination com corn of gold coin and arid bullion silver rupee coin and sterling se In South America the Argentine republic is engaged In the mobilization mobilization mobilization of reserves and presumably is about to take a more Important part in the international financial and monetary situation Russia half a world away stands forth forthwith forthwith forthwith with a balanced budget and although although al at- though a country countr turns up as the second largest gold producer In the whole world The thing is not a Chin Chinese e puzzle it is isa isa isa a puzzle made up of every national puzzle in the world |
