1924-06-02 — Page 3

Page

SPECIFY

S. K. F.

BALL BEARINGS

ON ALL MACHINES YOU ORDER.

Wcan supply Bearings for all kinds of Machines

POWER SAVING. NO HOT BEARINGS. SELF ALIGNING REQUIE LEES ÄTTENTION,

THE UNITED ASBESTOS ORIENTAL AGENCY. LTD

Tel. Coätral 938.

SOLE AUENTS FOR HONGKONG.

THE HONGKONG DAILY PRESS, MONDAY, JUNE 2ND, 1924

Address: 2, Queen's Buildin ga.”

QUEEN'S THEATRE

PLEASURE HOUSE DE-LUXE

Commencing 30th MAY to 2nd JUNE.

At 5.15 & 9.15 p.m.

"YOUTH TO YOUTH"

Au Unbeatable Combination played by a Distinguished Cust, headed by

BILLIE DOVE.

At 230

&

7.15 p.m.

A FOX "SERIAL

THE BRIDE "13"

Expisode 9 & 10.

USUAL PRICES.

BOOKING AT THEATRE.

UNUSUAL OPPORTUNITY for A SHORT TIME ONLY

M.

A Select Assortment of

DRAWN WORK

AND

LACES

20% BELOW ACTUAL COST

AT

"DO BE CHAIRFUL" COMPANY

51, Queen's Road Central

Y. SAN & CO., LTD.

PRESENTED CHOICE TELECTED BEST TOPIC STEM SINGER

EARE THIS SIDE MYSAN &

NABE I HONGKONUN

MANUFACTURERS

STEM GIN

M.Y.SAM

OF

BEST PRESERVED

"STEM CINGER.

HEAD OFFICE: No. 93 to 100 Queen's Road Central FACTORY: Canton Road, Kowloon.

BRANCHAS AT: Manila, Singapore, Shanghai, Canton, Chins

The CITROEN.

The Last Word in Car-Economy RUNNING COSTS LOWER.

Loss Lyres

Less Oil

Winner 3 years running 1920-21-22. Grand Prix for Law Consumption.

Cars for Sale:

LEPACK CO., LTD.

50-54, Queen's Rd. C.

THE GOLD PROBLEM OF THE UNITED STATES.

GOLD POURING INTO THE STATES.

and have no desire to hold there more than the low requires, When their de posíta Šriso raboya the amount legally "necessary, the excass in used either to reduce their. borrowings from the Federal Beserve System, or, if they are not bor- rowers, to enlarge their fonna or holdings The following interesting observations of securities ember bank borrowings on this subject are contained in the latest $400,000,000 on April 16th, 1924, as com

in the shape of rediscounts, stood at

circular of the Royal Bank of Canada -- pared with @683,000,000 on April 18th, The position in which the United States 19 If rediscounts wore all paid off, the find themselves in regard to gold at the Federal Reserve System could still absorb a further 8443,000,0014 gald by selling that present time is a very interesting "oar, After having received a great quantity amount of Government securities and bills during and immediately after the war, at Purchased in the open market, which it nos holds. The total of these items ra the expense of other countries' stocks of the precious metal, the United States conferred to is $310,000,000, an amount some- what less than two years imparts of gold tinues to take most of the world's annual

at the rate at which imports were reepived in the first quarter of 1924.

If gold imports continued after member bank borrowings had beep repaid and bills and securities held by the System had heen disposed of, the effort of the banke: to find employment for their surplus re- serves would inevitably tenil to have as a result, first, lower interest rates, Inter. an increase in commercial borrowings, and, finally, rising prices.

production. The world's requirements for gold can be divided into three main cate gories; the amount required for use in manufacturing, the amount required for use in manufacturing, the amount required by the Orient for boarding, and the amount required for monetary purposes. The de mand from the first two named sources absorbs only a moderate portion of the annual production, and gold is now hardly used at all as a circulating medium, so the main source of demand is from centcá

If the above presents an accurate pic banks or governments who use gold nature of the situation, then the price de reserve. The central banks and teen eling, which has been going do in the suries of Europe are to-day holding more United States since September is not gold than they did before the war. In liable to be carried very far. We havo creases in the holdings of such countries considered the theoretical possibility of as England are largely balanced by de- clines elsewhere. The increase in hold the Reserie Systems necumulating a re- ings was largely a war time phenomenon. Serve of 100 per cent, against note and and for some time past Europe has shown deposit liabilities, hate such a point is no desire to accumulate larger reserves of tices. It would mean, for one thing, that most unlikely to he arrived at in prae- this expensive metal. The gold unwanted the Federal Reserve System had no carn by the rest of the world consequently con- tinues to pour into the United States, in assets, or, in other words, nothing which, as a gold standard country, must coming in with which to pay its annual operating costs of $20,000,000. Under receive it in any quantity.

present conditions, the System requires earning Assets, of...net less than $630,000,000, in order to pay expenses, and carning assets could only fall some $930,000,000 below their present figures without resulting in an operating loss.

The fact that gold is used as money tends to obscure the fact that ita exchange value is determined in the same way as the exchange value of any other com- modity-by demand and supply. The de- cline in the value of gold since 1913 is measured by a rise in the Index Number of United States prices from 100 in that year to 150 in 1994 The limitation of European requirements, and the continued inflar of gold, undoubtedly would have resulted in inflation and, a higher price level than the one now prevailing, had it not been for the policy pursued by the Federal Reserve System, during the last three years.

A WHERE THE GOLD GOES TO..

BEARING ON EYEOPLAN FINANCE. The United States situation has so important bearing on Europeau finance, and is being watched, especially by Eng land, with the greatest interest. The European countrica who borrowed $10,000,000,000 from the United States during the war, did so during a time at high prices. The actual cash was of no use to them; they immediately turned the tea billion dollars credit into food; stuffs and munitions, purchasing these supplies while the Coited States price index for such goods averaged at least 200 Now, when they come. to repay their debts, the price index stands at 150.

to-day about 33 per cent. more in actual goods than was received by the borrowers during the war. A general rise in the United States price level would have the effect of eparing these countries a portion, of the heavy losses which deflation in-

As the average bank in the United States wants little gold in stock, and as the people want practically done, the incoming supplies quickly reach the hands of the United States Treasury and the

The monetary terins only serve to ob- Federal Reserve Banks. The latter, bas- scure such transactions. Commodities ing their policy on the sound theory that are the reul basiz. The tea billion dol atability in prices is a desirable thing, lars, which these countries are obliged have allowed the gold to accumulate into repay the United States, represent their vaults, without using it as a basis for the extension of credit. During the last year and a half, they have been assist ed very greatly by the fact that active business and production on a large scale throughout the country have increased the legitimate demands for credit and curficted on them. It would also simplify rency. Additional credit has been sup the task of restoring the pound sterlin plied by the National and State Banks, and certain other currencies to a gold without enlarging their borrowings from basis. The next twelve months should the Federal Reserve, while an increase in yiehl an indication of what results can currency circulation has served to absorb be expectesI. the gold imports in the form of gold ceri ficates. Instead of pushing the circula- tion of Federal Reserve notes, the policy has been to, encourage the circulation of these gold certificates, which are backed by 100 cents in actual gold bold in the Treasury. The circulation of this form of money increased from $171,000,000 on June 1st, 1999, to $571,000,000 on Febru- ary 1st, 1924, at the same time as Federal Reserve notes in circulation declined from $9,150,000,000 to $2,008,000,000.

RESERVE PERCENTAGES.

The Federal Reserve Systems is only obliged by law to keep a cash reserve of 30 per cent. against deposits, and 19 per cent against notes in circulation. We show, below, the present position of the System, the cash reserves (almost entire ly gold) being divided for the purposes of the present article into percentages of notes and deposits.

APRIL 16TH, 1021.

Federal Re

serve Notes- in Circula- "tion 100% Reserve Deposits

$1,966,343,000

Federal Re-

€1.5% Reserve

Total Notes

serve Banks 2,011,585,000

and Deposits: 3,977,934,000

Total. Linh

Reservca

$1,960,349,000

1,238,941,000

3,208,200,000

Combined Fercentage Reserve 80.6.

Every dollar in circulation in the form

13 DAYS FOR £995

AUSTRIANS AND DERMANS, CROWD INTO ITALY.

Reports from Italy stating that there is an overwhelming affus of German and Austrian tourists into that country are now partly explained

It appears that the Austrian Academic Association organised a gigantic Easter tourist party to the Italian cities for 12 days beginning April 13th, at inclusive fors of shout £9 is Nearly 3,000 Austriana subscribed, and started happily in special trains from Vienna.

The Pope, it is stated, has promised to receive the party, although nearly half of the tourists are Jews, and the organisers. | Have arranged for the three sections of the party to assemble in Rome during Easter for reception by the Fope. ?..."

Eastertide is always a congested period for Italian travellers. Hundreds of let- ters are now arriving in Vienna describing the experiences of the luckless 3,000 toursts fundrals spent two nights in the streets of Ference hangry, unwashed, and penniless.

WARREN CO.. LTB NANITARY ENGINEER.

MONUMENTALISTS, 45-

OFFICES & 198A, Wanchai Road,

GODOWNS

TL, No 300. HONGKONG.

ALL KINDS OF BUILDERS REQUISITES IN STOCK.

of Federal Reserve. notes »can be con sidered as backed by 100 cents in gold, and every dollar on deposit in the Federal Reserve Banks, as backed by 61.5 cents in gold, those percentages lacing now far above that practice has found accessary.

This large percentage reserve has been allowed to accumulate for the express Boil, Vent and Rain Water Pipes Floor purpose of avoiding inflation. The and Wall Tiles Baths, Basins. Eath Federal Reserve System recently gave Fittings Waterheaters for Gas, Oil or official publicity to their policy, stating Coal Fuel. Also A Few Chip Hestora tint discount rates and credit facilities are not new determined by reserve per centages.

What lenda the. situation its great ta forcat to-day is the possibility that the present state of affairs cannot long be maintained in the face of continued heavy imports of gold. The Federal Reservo System has only in limited power of aborting gold in such a way as to pre vent it from affecting bank credit and prices. The incoming gold is received by the commercial banks. Without detailing the process, we can say that usually its first cffect is to increase the aroun which the member banks have on deposit

Open and Closed Gratis, Cookin (

ESTIMATES FUZE 702 ALL NANIFANY

INSTALLATION, HOT WATE

STRZEMA, Áo.

GENERAL EXPATS PROMPTLY ATTENDED TO.

Specialists in Monumental Work-Out Italian Marble or Hongkong Granito,

JUST PROFITED: A SHIPMENT OF ITALIAN MARBLE FLOOR TILES. Prices on Applicatica.

with the Federal Reserve Banks. Now ARTIFICIAL WPEATER-ROM 8" to 18"

the member banks receive no interest ou their deposit with the Federal Reserve

· · DALBYR "ra; Stock,"

(1458

MADAME

FLINT

CHIC

SUMMER

FROCKS.

CHINA BUILDING, 1ST FLOOR.

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TIMBORITE

WOOD PRESERVATIVE AND STAIN.

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Three Sha car -Green:

Dry Bot, Decay and

STOPS Destruction by White Ante

Tint Cards and Information from

Wilkinson, Heywood & Clark

Telephone.

K711

Alexandre Buildings.

Phone Central 763.

BICYCLES

LADIES', GENTLEMEN'S OR TANDEM FOR HIRE OR SALE.

HANG LEE CYCLE CO.,

33, HairHong Baan, "KOWLOON. Next to PALACE HOTEL,

Telephone K711

PIANOS FOR SALE OR HIRE.

TSANG FOOK PIANO CO.

2127.

WANGHAI, Bean.

PERFUMERY

Manufactured by BIGAUD, PARIS:

ARMAIRE

| BALSAMADO

MARY GARDEN "

** MORA "GARITOSAL ?

***DULEB MIATM.

#LILAS RIGAUD "

(GA)

Obtainable from

VICENTE ATIENZA,

- 18, Naritax Rö, KÖTLOOK. Thu, K. 155.