The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1933-09-14
Common Sense About Gold

New York Times)
In last weeks address on the money
standard to the British Association
for the Advancement of Science, by
Professor John H. Jones of the Uni
versity Of Leeds, general return to
the gold standard was predicted al
most as a matter of course. That a
single economic expert should make
this prediction would be itself of nc
great significance, but the consen.
sus Of judgment to the same effect
has been impressive. Not to mention
the emphatic turning-down at Of
tawa OF every suggestion for a man
aged empire currency" we have had
last years declarations of the Bank
Tor International Settlements anc
the League OF Nations economic com.
mittee that the gold standard is thu
one mechanism through which 9
monetary system resting on com.
mon basis" may be reestablished
Even speakers and writer's, who have
stressed the argument that the gold
standard has not been working right
~ IN the past few years, have tacitly
assumed that the real problem Is not
indefinitely to relinquish the gold
standard, but to remove the obstacles
which have interfered with its pro-
per operation.
The contention of the address tc
the British Association is that ma.
tionS such as England and America
have a particular motive for return
to gold. They are visibly injurine
one another by trying to get the
advantage In deprecated exchange
The essential feature Of the gold
standard, Professor Jones pointed
out, has been that it maintained q
fixed rate Of exchange, established
an international price system and
controlled the internal currency sup.
ply" That Is what the Chicago
Bankers convention meant, In its re-
solution that this nation cannot in
definitely continue to carry on its
business affairs with monetary sys-
tenn In 50 unsettled a state as it Is
at present" The recent foreign ex-
change market tells the story. In
July, the pound sterling and the dol.
lar were at parity on the interna-
tional market; in terms of gold, each
was deprecated about 81 per cent
But at the close Of August the
pounds depreciation was IS per
cent, the dollars less than q. II
IS futile to talk of lifting artificial
barriers from trade while that sort
OF thing is going on.
In the face Of this confusion the
paradox is presented Of governments
which are professedly cutting loose
from gold" accommodating in the
vaults Of their own central banks
unprecedentedly large amounts Of it
Talking at Oxford a year and q
hall ago, Professor Cassel, bitter.
ender among the managed cur
rency" adherents, lamented that
those short-sghted institutions were
clinging persistently to their gold
He denounced it as "the old idolatry
Of gold reserves" One may fancy
his feeling today, when the Bank Of
England since last January has add.
ed $346, 000, 900 to its stock Of gold
which is now $73 900 greater thar
the highest record prior to 1881. Fol
that acquisition, the heavy premium
charged In England's deprecated
currency was paid cheerfully.
With equally unaccountable disre.
gard Of New-Era money theories, oul
own federal reserve has accumulated
gold so fast since April that it nov
holds $l02 800 900 more than tn,
largest gold reserve reported in an,
other year. This recent increase a
our own central institution, it IS true
has resulted mostly from the threat,
to private holders Of gold coin o.
certificates. unless they should Civ
it up. But that IS not the case witt
the European banks. and the yer,
measures taken to pry out private
American boards OF gold are indi
rect evidence of the value Official,
placed on it as currency reserve.
It must at least be admitted tina
these incidents throw q singular ligh
on the contention Of occasional phil
sophers that I'VE have done Will
gold" that "the gold standard Is al
obsolete superstition" and that al
we need, In order to establish al
ideal standard Of value for the fu
ture. Is q committee Of statistician
e1uippsd with pads pencils and Ia
latest market reports.
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