Evening star., 1935-06-02
BY C. PATRICK THOMPSON.

III - Oft4INS L1lC opdCC O1 ILll &C odyo
recently $35 900, 900 worth Of
gold was dumped on London
- docks and carted of in its
clean little square IRON
bound wood boxes, each containing
four $4,000 bars, to the Rothschild
refinery, to be weighed, assayed. valued
rapidly refined, FURNISHED with the
gas flame, stamped for the bullion
market, and sold-all within "a hours.
In the same brief three-day period
in the same imperial capital s22, ,000,-
900 worth of the yellow metal was
exchanged for dollars, francs or some
other money token represented by a
credit in a bank, loaded up in horse
van or motor truck and carted to
the river bank where the Romans
once landed gold for their legions'
pay, or to the airport on the south
ern city rim, and borne away through
the air or over the sea to be boarded
in Europe or America.
These transactions, these comings
and goings may not seem impressive
when measured against an American
gold intake aggregating $1,000, ,000.-
900 In 1884, and an American gold
hoard which in April reached the
extraordinary figure of 1,720,000, 900
gold pounds-the greatest accumula-
ton in history. representing just one
half Of all the monetary gold ac-
cumulated in the world since Croesus,
King of Lydia, struck his lion-and-
bull crest on the gold coins.
But the London phenomenon is not
one of massive and inanimate bulk.
1t is a phenomenon of dynamics.
London is not a boarding center, but
market-the great free gold market
Of the world. The mass of gold which
has passed into central bank and
private boards in America, Europe
and India has passed through the
London market and the hands of its
famous old bullion broking firms.
Profits for Many.
Shippers, insurers, banks, brokers'
all scrape their profit of the metal
in its passage from mine or ancient
hoard to the market, and thence out
again to the gold-hungry individual
corporation, bank or government.
For three years now the market
and its folk have been enjoying an
unprecedented boom, with gold at
steadily rising prices. Every monetary
furry, every currency scare is grist
to their mill. When at last cur
rency stabilization comes, restoring
confidence and fixing currency values
the market, now waxing fat on cur
rency chaos, will put on crepe and
go into deep mourning. Its big days
will be over.
During the last two and a half years
spectators and hoarders have bought
approximately $4,000, 100000 worth of
gold in the London market. Half OF
that treasure, 100000 ounces, now
lies in London vaults (this is apart from
the 81. 1850, 100000 worth now owned by
the Bank Of England-that chunk is
still valued by the bank at the ole
parity Of IS shillings an ounce, Britain
not having devalued her pound, but
only cut 1t loose and let it run free
against gold and other currencies)
Some Of it is new gold, some old-as
old, maybe, as the Caesars of Rome and
the Pharaohs Of the pyramids. Fol
gold, most malleable and ductile of al
metals, unalterable by heat, moisture
or corrosive agents. is indestructible
and eternal. 1t takes a philosopher
to appreciate it; and most of the
members Of the old firms who deal in
it are philosophers as well as mer-
| chants.
Six Men Constitute Market.
II, around 10:45 am, you GO
through massive archway ano
across a cobbled courtyard in St
Swithin'S lane, in the heart of the
old city, the business quarter. you will
find them in conclave-six grave
gentlemen who deal in gold and con-
stitute "the market" This is thu
Rothschild Office, and these are the
representatives of the six great old
| firms (the earliest esta ablished in
1884, the year before the Bank Of
England. the youngest century old
who decide each day how much ir
terms of sterling, one ounce of fine
gold will bring.
1t Is not a complex calculation
SuiAChSy CASildllSC 4otCo dllO 4l1ISL
national demand determine the ster-
ling price Of gold. The only two fixed
points are in Paris, where the rate is
526.2426 francs an ounce, and the
American financial center. where by
administration ukase gold is worth
$35 an ounce. In London gold has
no fixed value, the pound being de-
tached and swinging loose in the
cross-currents of the foreign exchange
market.
Before the meeting starts the
Rothschild representative, who pre-
sides, has worked out the sterling
price of gold by reference to the
sterling exchange rate against either
dollars or francs. The brokers have
opened their mail, received their tele-