anaheim-gazette 1932-05-26

Dual System of Gold Deposits Explained As Europe Draws $37,000,000 in One Week Huge Withdrawals Not Attack On American Dollar, But Result of England's Going On Double Standard, Thus Affecting Value Of Money Throughout World; Silver Agitation Growing By CALEB JOHNSON There hasn't been a time since 1896 when there was so much talk about gold and silver and their use as money as there is in these days. We hear a great deal of talk in Congress and outside of it about gold reserves, and especially lately about the withdrawal of gold from the United States to Europe. In one week lately $37,000,000 of gold was shipped out of New York and back to Europe. But the alarmists who point to that as an indication that the American dollar is losing its value, that our country is going off the gold standard, that Europe is scared to death and is getting its gold out of this country as fast as possible, don't know exactly what they are talking about. This matter of international gold reserves is really a very simple thing, once it is explained. The federal reserve bank and other banks, and the United States treasury, hold two kinds of gold. That is, they are the same kind of gold but some of it is in the form of uncolored bars which have been deposited with the Federal reserve bank of the United States by the central banks, of many foreign countries for the purpose of maintaining a credit in America and so maintaining the value of their securities held in America, and its currency in its foreign trade uses. Two Kinds Explained Most of the time these gold exchange balances are left undisturbed. There may be a hundred million or a thousand million dollars worth of gold in the vaults of the federal reserve bank, kept separate from all other gold and "earmarked" for the credit of some particular country. Technically, that gold does not belong to the banking institutions or the treasury of the requisition for return in gold of this huge mass of redeposited European reserves. Silver Move Galns There is now available, in a form in which it can be used as a basis for currency, enough gold to meet all the world's needs. If there were, a very large part of the present international financial stress would be relieved. The movement to restore silver to its old position as a basis of money is gaining strength. It has much more substance and enduring value than any of the thrills to increase the volume of money by issuing currency on government credit without any metallic reserve back of it. But in the meantime the world production of gold seems to be increasing. In the first three months of 1932 the largest volume of gold ever mined in a corresponding period was taken out of the mines of Ontario in Canada. Out of a single group of mines, Kirkland Lake, more than five million dollars of gold was extracted, and almost as much came out of the Porcupine camp. The total production of gold in Ontario for the quarter was over eleven million dollars, or at the rate of above forty-five million dollars a year. India Hoards Gold As long as the world continues to use gold as its sole or chief yardstick for the measurement of values, prices of commodities will always depend upon the supply of gold. By vis-à-vis of their securities held in America, and its currency in its foreign trade uses. Two Kinds Explained Most of the time these gold exchange balances are left undisturbed. There may be a hundred million or a thousand million dollars worth of gold in the vaults of the federal reserve bank, kept separate from all other gold and "earmarked" for the credit of some particular country. Technically, that gold does not belong to the banking institutions or the treasury of the United States at all. This "earmarked" gold can never be touched for our own banking purposes. To do so would be an international crime. But there may be also hundred of millions of dollars of gold which has been merely placed on deposit with our central bank, and which under ordinary banking practice the federal reserve bank is at liberty to use as if it were its own, the expectation being that we will always be ready to pay this back in gold when ever the country that deposited it demands it. The device of international deposits of gold was recommended to all of the nations that had abandoned gold payments after the war, by the International conference of Financial Experts held at Genoa, Italy, in 1922. This proposition that the central banks of issue of those countries, when they were in a position to establish a given percentage of gold reserve against their circulating notes, should invest a part of such reserves in a gold paying foreign market whence it could be withdrawn in gold if later required at home. Accounts Abroad When Europe resumed gold payments between 1925 and 1928, the Genoa proposal was widely adopted. As a result, the central banks of such countries as Holland, Belgium and Switzerland kept one-fifth to one-third of their reserves abroad while the Bank of France acquired possession for its own account of extensive foreign balances previously established by French citizens. But the Genoa idea was venturesome. It resembled somewhat our practice of permitting smaller national banks to deposit with city institutions three-fifths of their stipulated 15 per cent reserve. That plan worked well enough in smooth financial weather, but often made trouble in a storm, and Europe's confidence in the Genoa plan necessarily received a heavy blow when England suspended gold payments last September, an action which resulted in a 25 per cent impairment of the gold value of continental bank reserves deposited at London. Warns of Polley The resultant loss to the Bank of France, for instance, was nearly $100,000,000. The French government made it good, but not without definite warning that carrying "gold-exchange of the mines of Ontario in Canada." Out of a single group of mines, Kirkland Lake, more than five million dollars of gold was extracted, and almost as much came out of the Porcupine camp. The total production of gold in Ontario for the quarter was over eleven million dollars, or at the rate of above forty-five million dollars a year. India Hoards Gold As long as the world continues to use gold as its sole or chief yardstick for the measurement of values, prices of commodities will always depend upon the visible supply of gold. By visible supply is meant gold in the form of coin, bars or bullion held in bank vaults. It is probable that there is more gold buried in India than there is in all the banks and treasuries of the world, but gold so hoarded is of no value as money, except as its owners take it out and spend it or put it in banks—and India has no banks, or very few. These great hoards of Indian gold have been accumulating for hundreds of years, some of them perhaps for a thousand years, the secret hiding place being handed down from father to son, while each generation makes some additions to the store. If India, with its 320,000,000 people, ever reaches a stage of social and economic development where it can establish a sound and stable banking system which will eventually lure this hoarded gold out of its hiding places that country could and would become the most powerful financial and economic nation in the world. Plan Motorcade For Water Route Groups From Orange County Are Invited to View Vast Project In order that residents of Southern California may become acquainted with the physical aspects of the international route over which the waters of the Colorado river may be brought to the coastal plain, the International Water association, of San Diego, announces a gigantic motorcade for Saturday, May 22. The cars are to meet in Balboa Park at 8:00 a.m. and proceed to Tecate where they will take the Cantu highway across the mountains in Mexico, crossing Laguna Salada, which will be the storage reservoir for the project, and reaching Mexicali early in the afternoon. The return trip will be over El Centro-San Diego highway at will. Col. Ed. Fletcher, of San Diego., is in charge of the motorcade. He urges every civic organization in Los Angeles, Orange and San Diego counties to put at least one car in the big parade. State Engineer Edward L. Warns of Policy The resultant loss to the Bank of France, for instance, was nearly $100,000,000. The French government made it good, but not without definite warning that carrying "gold-exchange reserves" should be abandoned and foreign balances gradually called home. The other continental central banks adopted a similar policy. For obvious reasons, a substantial part of these foreign reserves had been lodged or invested in the United States. Their recall involved equivalent shipment of gold by the federal reserve, which had always held itself ready to respond to such legitimate demands. The reduction since September, in total "gold-exchange reserves" reported by the European central banks, has already ranged from one-half to three-fourths of the aggregate sum at which they stood last Autumn, and the reduction has presumably been largest with those which had been carried in America. This is the plain and simple story of the large gold shipments from New York since last September, and also of last week's gold exports. There is nothing occult about the process and, since the recall of these balances was part of a predetermined policy, it can certainly not be construed as "flight from the dollar." Whatever alarm or mistrust accompanied the movement was caused by the action of England As concerns the federal reserve, it is to be observed, first, that considerably the greater part of these European bank balances has now been returned to Europe; second, that the amount remaining is no more than the federal reserve can return, if desired, without inconvenience. As against these much reduced foreign bank credits—probably not now exceeding in this country a few hundred millions—the federal reserve has the power to provide at least $1,300,000,000 gold. It has something more; the repute, in the eyes of every timid European market, of having met instantaneously and with complete composure an all but overnight in Balboa Park at 8:00 a.m. and proceed to Tecate where they will take the Cantu highway across the mountains in Mexico, crossing Laguna Salada, which will be the storage reservoir for the project, and reaching Mexicall early in the afternoon. The return trip will be over the El Centro-San Diego highway at will. Col. Ed. Fletcher, of San Diego, is in charge of the motorcade. He urges every civic organization in Los Angeles, Orange and San Diego counties to put at least one car in the big parade. State Engineer Edward L. Hyatt, Jr., will be a member of the party. Governor Rolph and Lieutenant Governor Merriam have been invited. Most of the county supervisors of the three counties and many cities officials, including Mayor John F. Forward, Jr., of San Diego, original backer of the so-called Allison-Forward plan, will take the ride. J. C. Allison, father of the plan and chief engineer of the project, will explain its details on the floor of the Laguna Salada. A reception for the party, which may number 500, is being planned in Mexicalli. The International Water association claims that the proposed route is much shorter, has less tunnelling, half the pump lift, will cost far less and deliver twice as much water as the Parker route being considered by the Metropolitan Water district. Water at 4 to 6 cents a thousand gallons can be delivered, it is claimed. State Engineer Hyatt recently said: "If half your statements are true, the project should be snapped up without delay." He accepted Col Fletcher's invitation to be a guest on the trip. Anyone intending to make the trip should wire, phone or write O. B. Tout, 211 Union Title Building, San Diego, immediately. Inspect Gold Mine In Port Wine Channel C. S. Schermerhorn, president of the Mountain Boy Mining company, and oca men interested in the company this week inspected their 73.42-acre property in the Port Wine Channe east of LaPort in Sierra county. Now that snow has mostly disappeared, work on developing the gold-mining claim is progressing rapidly. Missionary Funds Raised by Baptists Almost three-fourths of the funds contributed a year ago were raised again this year for the Home and Foreign missionary movements of the Southern California Baptist churches, which held their convention in San Diego last week, according to Anaheim delegates returning Friday evening. The conclave opened Tuesday and closed Friday noon, and boasted a large attendance. Those attending from Anaheim were: Rev. Virgil K. Ledbetter, Mr. and Mrs. George L. Beardsley, Mrs. Anne Wilson, Hobart Schuckman and Mr. and Mrs. W. E. Bartlett. The latter couple attended as guests, the others were delegates. Legion Carries On In Fight to Find Work The campaign to place one million unemployed in jobs, which has been conducted since February 15, by the American Legion, the American Federation of Labor and Association of National Advertisers will now be continued by the Legion alone according to an announcement made today by Albert G. Motsch, of Long Beach, state chairman of the employment and relief commission. "Approximately 760,000 jobs have been found or created in the national campaign" said Motsch. "The American Federation of Labor and the Association of National Advertisers, believing that their port—that of organization and educational work which formed the background of the campaign—has been accomplished, will leave the actual work of finding the additional 240,000 jobs to the 10,000 posts of the Legion throughout the country. The campaign has been more successful than its most enthusiastic supporters predicted and will be carried on until the million job mark is reached. Sees Debts As Great Burden Lions Club Speaker Believes Real Estate Boom Coming in 1934 Payment of redemption and interest thrust upon the present generation of Americans by the past who believed in the "installment plan" is one of the biggest burdens facing this country today, in the opinion of Ralph B. Rutledge, manager of the Pacific Union Deposit company, who addressed the Anaheim den of Lions Friday. Rutledge declared that great possibilities lie before America and the world in general in the next ten years. He stressed the point that Russia had much to teach us in the way of industrial development, although the speaker didn't favor that type of government. The speaker looked forward to a gigantic real estate boom in the year 1934, providing taxation doesn't prevent return of investment to the soil. Evan Alsip introduced the speaker in the absence of Program Chairman M. E. Beebe. Installation of officers awaits definite word from Dr. Elliott Rowland of Santa Ana, district governor, who has been asked to officiate. Junior College Holds Open House All Week Fullerton junior college, which has been holding open house all week, will conclude its six-day program Friday evening with the annual spring concert to be given by the combined music departments of the high school and junior college. Tuesday evening a one-act play was given by the drama department. Thursday was exhibit day, which showed the quality and type of work done in each room. 150 Masons Attend Anniversary Fete Past Masters Occupy All Chairs In Initiation Work Degree work of past masters, who occupied all the chairs in the initiation, this week stood out in the minds of 150 Masons of Orange county who attended the sixty-second anniversary celebration of Anaheim lodge No. 207, F. A. M., held at the Masonic temple last Friday night. The celebration started at 6:30 o'clock with dinner and appropriate entertainment, of which William Birkel was committee chairman. Master Arthur H. Shipkey welcomed the past masters back to the lodge, referring in particular to the founding of the lodge in 1870. Shipkey introduced Past Master Hugo Schulz who, as toastmaster, called on each of the past masters present, representing the period from 1900 to the present time. Representatives from Santa Ana, Yorba Linda, Buena Park and Fullerton were present. Among the past masters attending and responding to welcoming addresses, as well as taking part in the initiation work which followed the regular entertainment and banquet, were: A. S. Bradford, P. H. Krick, W. H. Spake, C. E. Holcomb, W. M. Martinet, Sr., A. Alexander, E. H. Metcalf, George Jackson, Jack T. Johnson, W. P. Webb Jr., T. Lumsdon, D. D. Webb, W. D. Kohlenberger and Hugo Schulz. PLEADS GUILTY, FINED $250 Preston A. Lucas, 24 cook who pleaded guilty to possession of intoxicating liquor following a police raid on his hotel room early Monday morning, was ordered by Judge Frank Tausch to pay a fine of $250 or serve 125 days in the county jail. lieving that their port—that of organization and educational work which formed the background of the campaign—has been accomplished, will leave the actual work of finding the additional 240,000 jobs to the 10,000 posts of the Legion throughout the country. The campaign has been more successful than its most enthusiastic supporters predicted and will be carried on until the million job mark is reached. Fullerton junior college, which has been holding open house all week, will conclude its six-day program Friday evening with the annual spring concert to be given by the combined music departments of the high school and junior college. Tuesday evening a one-act play was given by the drama department. Thursday was exhibit day, which showed the quality and type of work done in each room. PLEADS GUILTY, FINED $250 Preston A. Lucas, 24, cook who pleaded guilty to possession of intoxicating liquor following a police raid on his hotel room early Monday morning, was ordered by Judge Frank Tausch to pay a fine of $250 or serve 125 days in the county jail. Why the-- Weekly New Remember These Pertinent Facts! The Weekly has: Although flooded with Fullerton and Los Angeles paper, such as the GaOutside dailies coming God of Circulation, not concerned whether the people here wantcerned with is the demost of these cases—either the newspaper Remember These Pertinent Facts! The Weekly has: 1. Longer Life. 2. Greater human interest. 3. More Loyalty from its readers. These are the reasons why America's foremost advertising men declare the weekly newspapers are the greatest news and advertising forces in the country today. Advertise in the Gazette---It bring KELVINATOR—Regular 5 Cubic Foot Machine REDUCED from $196.40 to $157.12 FEARN, 273 E. Center St., Anaheim - Easy Parking - Phone 3111 They’ve Never Tasted a Tonic! THESE are not patent medicine children. Their appetite needs no coaxing. Their tongues are never coated, cheeks never pale. And their bowels move just like clockwork, because they have never been given a habit-forming laxative. You can have children like this—and be as healthy yourself—if you follow the advice of a famous family physician. Stimulate the vital organs. The strongest of them need help at times. If they don’t get it, they grow sluggish. Dr. Caldwell’s syrup pepsin is a mild, safe stimulant. When a youngster doesn’t do well at school, it may be the liver that’s lazy. Often the bowels hold enough poisonous waste to dull the senses! A spoonful of delicious syrup pepsin once or twice a week will avoid all this. It contains fresh laxative herbs, active senna, and pure pepsin, and does a world of good to any system—young or old. You can always get this fine prescriptional preparation at any drug store. Just ask them for Dr. Caldwell’s syrup pepsin. Get some syrup pepsin today, and protect your family from those bilious days, frequent sick spells and colds. Keep a bottle in the medicine chest instead of cathartics that so often bring on chronic constipation. Dr. Caldwell’s syrup pepsin can always be employed to give clogged bowels a thorough cleansing, with none of that painful gripping, or burning feeling afterward. It isn’t expensive. Although flooded with daily newspapers from Santa Ana, Long Beach, Fullerton and Los Angeles, Anaheim has a real need for a weekly newspaper, such as the Gazette, which has filled this need for 62 years. Outside dailies coming into this community are bowing to the insatiable God of Circulation. They're not interested in the community; they're not concerned whether Anaheim forges ahead or lags behind, or whether the people here want honest government. All the outside dailies are concerned with is the demand of out-of-town advertisers for circulation. In most of these cases—believe it or not—the circulation isn't profitable to either the newspaper or the advertiser. That's why responsible advertis- Fullerton and Los Angeles, Anaheim has a real need for a weekly newspaper, such as the Gazette, which has filled this need for 62 years. Outside dailies coming into this community are bowing to the insatiable God of Circulation. They're not interested in the community; they're not concerned whether Anaheim forges ahead or lags behind, or whether the people here want honest government. All the outside dailies are concerned with is the demand of out-of-town advertisers for circulation. In most of these cases—believe it or not—the circulation isn't profitable to either the newspaper or the advertiser. That's why responsible advertising agents throughout America today are swinging away from "forced circulation" to the steady, result-getting kind as exemplified by Gazette readers, many of whom have paid for 50 years or more to have this community-serving newspaper delivered to their homes. Because, to get circulation, these invading dailies "play up" scandal and emphasize beyond all horizon of good taste incidents of tragedy, residents of Anaheim and vicinity turn to the Gazette for wholesome accounts of the city's real news — the every day happenings which make this one of the world's finest districts in which to live and rear children. Several reasons dictate this attitude. The daily is read rapidly, most attention being paid to comics, the front page and possibly sports. Yesterday's daily is as dead as Tut-Ankh-Ahmen. But yesterday's GAZETTE is saved for "Tomorrow and Tomorrow"; so that Brother and Sister and Aunt Mary can see the record of their activities—of his athletic prowess—of her initial debut as hostess at a tea—and of the program she sponsored at the Woman's club meeting. Gazette readers call, or soon learn to call, a great share of local residents by their first names. They are more interested in Mary Jane's card party or Old Man Smithkins' fire than in a couple of earthquakes at Patagonia. Yes, the GAZETTE is filling a real need in this community. -It brings home the Bacon