The Kennewick courier-reporter. [volume] (Kennewick, Wash.) 1914-1938, 1935-10-24
Gold Is
Pouring In

wheat farmer of the plains country
or the cotton farmer of the South
or any other type Of farmer can
fail to become excited over the in
fiux Of gold In the last five or six
months. 1t appears to be far cry
from the grain fields or the cotton
fields or the quarries or the small
town to the heavy concentration of
yellow metal to which the United
States has been subjected. But the
link nevertheless exists. 1t exists as
surely and as definitely as night fol-
lows day and, therefore, It becomes
q subject In which all Of us are VI
tally interested.
Since the beginning of September
q widespread flight Of capital from
Europe has manifested itself in the
shape Of gold exports to the United
States. Three or four hundred mil.
lions of dollars in gold have landed
here In that time. They bring the
net inflow of gold for the year well
above S1,OOO,OO0.O00. And, going a
bit further, this addition plus an
other $1,000, 100000 places our gold
stocks in excess Of $1,000, 900,
or roughly $2000,OO0,0O0 more than
was held here when the dollar was
devalued under President Roose-
velt's instructions.
1t seems impossible TO attribute
this heavy and prolonged inflow to
any single cause. Immediately after
devaluation of the dollar, there was
a steady stream of yellow metal
headed for the United States which
was due almost entirely to a desire
of American holders OF gold, tempo
rarily stored abroad, to repatriate.
But even In that case, there was
contributory factor to be considered.
Monetary manipulation by the
American government had tempo
rary effect on our exports, increas-
ing them to some extent and ii was
increasing the balance of payments
due to this country. So, we find our
policies-that is, policies Of the
Roosevelt OBSERVATION-DISCLOSURES
BILE for the start of the inflow.
Later, another influence. devel-
oped. Under the pressure Of Amer
lean monetary policies, foreign pow
ers found their allegiance to the
gold standard severely strained. Sill
yer purchases by the treasury had
an effect. The combination was pri-
marily responsible for the second
rush of gold. ....s-... ..- .-s
Subsequently, the Italian-Ethio-
plan controversy began to take Sc
rious form and new flood Of gold
to America developed. This was diff
ferent than that which had imme.
diately preceded it because this
movement was related to interna
tionai conditions of a political M
ture whereas the previous move
ment had resulted without relation
to international strife In a military
way but centered wholly upon Amer.
lean monetary policies and their eff.
feet upon economic conditions
abroad. o.
Now, let us consider what can
happen. Those acquainted with f.
nance recognize
I'LL. What in the existence
Can Happen Of a gigantic
stock of gold
the largest In American history and
approximately IS per cent Of the
entire world stock-the existence
of a potential, If indeed 1t is not
a probable, base for imitation. There
is so much gold held by the Ameri-
can government, which holds virtu-
ally all Of the gold stocks In this
country, that no end of paper money
can be issued against 1t. Those who
believe in that type OF currency
policies say that 1t would be per-
fectly safe; that the government
could pay off dollar for dollar or
even more than a dollar for every
paper dollar outstanding from the
gold it holds. This school of thought
contends that there Is actually
shortage of money In circulation
and insists that this is one reason
why the country has not recovered
from the depression more rapidly
than conditions show. OF course,
cold appraisal of that argument
catalogues il as the same old de-
mand for imitation of the currency
and everyone knows what imitation
will do In the way of wrecking the
person who works for wages or
whose sole income consists Of a
compensation delivered to him in
the form of weekly, semi-monthly,
or monthly pay checks. The size
of that check never has and never
will catch up with the increase in
prices which that individual must
pay to live.
Then, there is another potential
danger in this tremendous horde Of
gold. 1t is in many ways similar to
that which ] have just related. 1t
lis, however, more of psychological
condition than the first. i refer to
the attitude usually adopted by
those who pull for imitation when
they see a government possessed Of