The Hartford herald. [volume] (Hartford, Ky.) 1875-1926, 1916-12-06
WILL GOLD FALL
IN VALUE, ASKED
Will England Be Forced to
Go to Paper Basis?
IS STANDARD TOO CHEAP 1?
Gillison Gardner Discusses Nom
ey Situation as Affecting
America.

Washington, Dec. 3.--Is gold be-
coming too cheap! Is too much
gold one cause OF the increased cost
of living? What will happen if gold
continues to pile up in the United
States Treasury? Can Great Brit
ain-the mother of the gold stand
dard-maintain her credit by con-
tinued gold payments? Is there any
danger that Great Britain may go to
a paper currency with the indefinite
continuance of the war?
These are some of the inquiries
raised by the Federal Reserve
Boards warning against the too free
purchase of short-term, high-interest
notes now being put out by the Brit
ism government. In effect our Fed
eral Reserve Board has said: $50
a little slow in taking the credit of
warning nations. Gold is better
than promises. We have good uses
at home for lot of our money"
|
Board remarks in passing that there
| is much unnecessary worry in GER
| tain quarters over the supposed
menace of too much gold in this
country. The gold reserves in the
reserve bank system have not yet
been fully paid up, and until they
are, this foreign gold can go into
| those repositories.
Situation In England.
How long can Great Britain con-
tinue to make gold payments to
meet the interest on her war Dor
rowings? | have just talked with
man who spent nearly two years in
vestigating this subject. An Amer
lean, he lived year in London be-
fore the war broke out. and then
was sent to South Africa to investi-
gate the matter of gold production
there. He spent nearly year in
that work. He tells me that the
situation is this:
Shortly after the war began the
British government practically took
over the South African gold mines,
and has since been operating them.
The nations fnanciers realized that
nothing would be more important in
winning the war than to insure the
credit of the nation. and that moth
ing would go further toward insur-
ing that credit than to make certain
of reliable and bOuntiful supply of
gold to pay interest on the national
debt. In pursuit of this policy the
government has been producing
gold in Africa in practical disregard |
of cost. 1t was no longer necessary
that five dollars worth of gold be
produced at less than s. cost in la
Dor units. In fact, the government
is now paying twenty-one shillings
for twenty shillings worth of gold, a
five per cent. premium on every |
pound sterling of gold produced. |,
Meantime capacity has been largely |
increased. Not only are old mines
and machinery being worked to the
limit, but new mines on land which !
has hitherto been part of the public
domain and in many cases was not
suspected of being gold-bearing, |
have been opened up with new ma /
chinery and new labor.
Australian Mines Worked.
Also, the Australian mines. where
the OUTPUT had begun TO fall off.
have been put under forced pressure
and are contributing a larger share
than ever before. Altogether the !
world production of gold has reach /
ed the amount of $500,00O,O00 a
year, of which ii is estimated more !
than half is being produced by Great
Britain.
This gold is shipped 10 Sydney,
Australia. on goyernment cruisers,
and thence through the Indian /
Ocean across the Pacific to Canada,
to London's branch bank at Ottawa,
where England now keeps practical !
ly all her gold. 1t is from this Ca
madam depository that the New York
banks draw when the balance re-
quires a payment In gold to main
tain British credit.
On the face OF things IL would |
seem that this would insure Eng
lands borrowing power for a long,
IL not indefinite. time to come. A