Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-11-05
u. S. GOLD DOLLAR
HELD IMPROBABLE
Expert Declares New York
Has Opportunity to Become
World Financial Center.
~ the Associated Press

b the Assoeiated Press
NEW YORK. November s.--The man
who helped a dozen nations back 70
monetary stability today told the United
States that the American gold standard
and dollar are virtually impregnable.
so strong are they, Or. Edwin w,
Kemmerer OF Princeton University said
IN a speech before the Advertising Club
that Jew York now has the opportunity
Of replacing London a. the worlds
financial center.
Or. Kemmcrer. who was a principal
adviser in the formation OF the Dawes
plan and who helped several South
American countries back 10 the gold
standard. labeled ignorant" or "timid"
or "enviouB" those persons who have
expressed feaTB Of the breakdown OF the
gold standard
We In America" he said, still have
the largest Supply Of monetary gold of
any country IL the world and the larg-
est supply that any country has ever
held In the history OF the world. Untl
September last this stock had been in
creasinR month by month. with only an
occasional slight interruption, since the
Summer OF 1923.
we have lost 500 600. 600 worth re-
Gently OF this geld. but this amount is
only about II per cent OF our Septem-
Der maximum holdings and merely puts
us back 10 about the figure we had In
January OF this year,
Reserve Above Requirements.
1.-THE gold reserves Of our Federal Re-
serve Banks are still more than a billion
dollars above legal reserve requirements
and we have outstanding hundreds Of
millions OF gold certificates. for which
we can easily substitute Federal Re-
serve notes, thereby stu further in
creasing the supply Of RELY available
gold
I'VE still have an excessive amount
Of gold. not because We reached out
and grabbed It. but chiefly because so
much has come 10 us for safe-keeping
The diflculty at present Is primarily
one OF confidence. Much of our gold is
still comparatiS ely idle, but 1t will be
put to work when people abroad and
people at home come to believe 1t can
be put 10 work safely and profltably.
"The gold standard in the United
States today is strong-very strong
and the fears entertained by some timid
persons and by some ignorant persons
at home, as we'll as the fears publicly
expressed by some envious persons and
by some ignorant persons abroad, Of
the possible breakdown of the American
gold standard have no justification
whatever In the cold facts of the
situation.
i can imagine few things more
foolish than for any one actually to
hoard gold in a country with such a
large gold supply as the United States
and with such a strong credit position
in relation to the rest of the world.
THE boarding Of paper money in
the United States is likewise foolish.
All of our American paper money, in
addition TO the other assets back of 1t.
enjoys the guarantee of the United
states Government itself. and our
National Government meets Is obliga-
lions.
"Hoarded money is always in danger
Of being stolen and 1t earns no interest
The proper place for small savings Is
in a bank, but, in case there Is no
bank in q town, or in case for good
reasons a person loses confidence in
the accessible banks and has decided,
therefore, to withdraw his deposits. he
should not hoard the money with
drawn. but, rather. redeposit 1t in his
own local postal savings bank and
enjoy the absolute guarantee of the
United States Government itself"
Opportunity Is Knocking.
ever since the war" DR.. Kemmerer
continued, New York has been gain
ing on London as a center for inter-
national finance. The shock given to
the financial world by Great Britain's
recent suspension of gold payments
and the difficulty Of carrying on in
ternational financial operations through
the INTERPRETATION of a paper money
standard will deprive London for
long time, If not permanently, OF her
premier position as the world money
market center.
This position is now being offered
New York The United States has a
well organized banking system. In re-
cent years we have been engaging in
creasingly in the field of international
finance, and we have many men, par
ticularly young men, of training and
experience in this field.
THE all-important question is: Have
our bankers enough knowledge of in
ternational finance, enough experience,
enough vision and enough financial
leadership to take the position that
London is now passing over to us?
1T is our opportunity and our re-
sponsibility. viii we meet it?"