Evening star., 1932-01-27
INDIA IS DECLARED
SHIPPER Of GOLD
Economists Interested in
Movement of Yellow Metal
From Orient.
BY JOHN L. COOLEY,
Associates >ress Financial Writer.


NEW YORK, January 27-Out Of
the land of Kim and Gandhi comes q
story that is worth the telling not only
for its own Importance at this particular
moment in world monetary affairs, but
also for its historic background
India is shipping gold. During count
less decades other nations have been
dumping treasure into her spacious lap;
now the flow has been reversed, with
what ultimate results no one can ven-
ture to predict.
Results of Movement.
So far, there have been some very
practical results. India is not only able
to meet her maturitieS at London and
to accumulate the basis for new credits,
but she is contributing to England'S
gold market at a time when England is
glad indeed to get assistance. The
pound Sterling's relative stability IN re-
cent weeks is believed due in no small
measure to the gold increment from
John Bulls politically troublesome pos
session. Furthermore, India is making
a pretty profit out of the transactions.
defieS computation. Century after cen
tury precious metal has been moving
into that vast land, there to be Swal-
lowed up and lost to all useful purposes
Indian natives are notorious hOarderS;
what small amounts Of tangible wealth
they can accumulate go into that very
reliable but non-intereSt paying de-
pCSitory, mother earth. Economists call
such practice sterilization.
For years India imported silver in
compensation for her favorable trade
| balances abroad. Her people demanded
cold hard cash rather than imports,
and thus steady stream OF metal dis
appeared into her homely Golfer. Later
she began to take yellow metal in pref
erence to white, and throughout this
century gold has had the call, having
been particularly in demand since the
war. For the few years prior to the
currency reforms of 1926 Indias takingS
amounted to approximately $15O,000,000
annually; even as late as two years ago
she was getting about a third Of the
worlds annual output. The gold thus
absorbed vanished completely.
Hidden Wealth.
However. since last Autumn it has
been leaking out. Exports in that in
terVal approached S2OO, ,OOU,OOO IN all
very considerable total, especially at
a time when other nations were de-
veloping a severe case of gold con-
sciousnesS. What is most encouraging
to economists and international bankers
is the fact that these shipments have
obviously been pulled out of India's
enormous hidden wealth rather than
from the governments reserves. The
total of the latter has actually risen.
1t is not difficult to trace the causes.
Since Britain abandoned the gold stand
ard the rupee has declined in value by
about two-t thirds, which means an in
crease of 6623 per cent in the worth of
the bullion, coin and decorative trinkets
which constitute the bulk of the hoard
ed metal. Also, India's foreign trade
balance turned against her almost
simultaneously, and she was thus COM
PEELED to export gold or to borrow
abroad.
Thus it has come about that the In
dian who bought gold at the old par
ratio can now sell with a very comfort
able margin in his favor; and at the
same time he is adding to the supply OF
metal available for monetary purposes
doing a good turn to the world in
general.