New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1916-12-13
The Gold Idea

Gradually the mind has freed
itself from the quaint superstition
that gold is wealth. Now it is strug-
Cling with the tyranny of the sacred
assumption that it is indispensable
as a standard Of value. 1t is hard
to imagine that if all the gold in the
world were sunk in the mid-Pacific,
O. the real business of the world, which
is to produce and exchange goods,
would presently be taking place in
/ al essential respects as before Yet
/ it would be so, for the very simple
reason that commercial processes
could not stop. To substitute an
other kind of money for gold might
or might not produce a disastrous
temporary arrangement Of prices,
but with gold still enthroned in the
world and treated as the immutable
standard Of value prices have become
very much deranged. People say
that to discuss the demonstration Of
gold is preposterous, whereupon they
proceed to discuss it. In the Deem
Der bulletin of the National City
Bank we read:
There is no reason at present for
anticipating any change in the policy
Of the Bank Of England in regard TO
gold payments, and the sensational
speculations as to the possibility Of
the Allied countries abandoning the
gold standard are almost too prepos-
ferrous 70 be discussed Great Brit
ain, at the end Of this war, will be
still the greatest creditor nation in
the world. Her loans to her allies
from April ! 20 October 7 Of this
year, as stated by Mr.. Asquith in the
House Of Commons on October II,
aggregated s253 100000, or approx
mately S1,265 100000, which undoubt-
edly exceeded her borrowings abroad
and her sales of securities in the
same period. In other words. even
now she is increasing the credit bal
ance in her relations with the rest Of
the world. All those relations, in
GLIDING the position Of London as
the worlds clearing house and her
place in world trade, are pivoted upon
the gold standard. Even if she should
follow the example OF Germany and
France and our own example during
the Civil War and suspend gold pay
ments, il would not signify abandon
ment Of the gold standard or any
loss 20 her creditors. 1t would mean
that she would have 70 do interna-
tionsl business at somewhat greater
inconvenience and cost and al a tenn
porary disadvantage IN competition
with New York, but It would be one
Of the unavoidable costs OF the war.
Meanwhile we repeat that there are
no signs that London is contemplst-
ing a suspension of gold payments.
and We shall not believe that it is
going 70 occur until it does occur.
The new gold taken out Of the ground
annually in Allied territory amounts
TO $30O,000,000 and this need only be
supplemented with s100,ooo,00o or
5000, 100000 from the Allied reserves
70 cover annual shipments to this
country 70 equal those Of 1916. II is
70 be hoped that the United States
will not be required 10 receive more
than s50O,OOO,OOO in gold a year in
addition 10 its own production.
Recently "The London Statist"
scandalized all orthodox economic
thought by printing an article in
which the obvious truth was guard
eddy admitted that if Great Britain
went on piling up debt the fiction of
its being payable in gold would break
down. Then it proceeded 10 discuss
what might happen TO the exchange
value Of the pound sterling in the
event Of gold payments being sus-
pended abroad. II was a sane arti-
Gle, but you lay your hands upon the
gold idea at your own peril. "The
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