Evening star., 1936-06-07
DENIES
GOLD IS LACKING.
Experts Say Price Decline
Was Not Conditioned by
insufficient Stock.

Contrary to predictions by pesSi-
mistic economists, the Brookings In
stitution has just released 207-page
statement of eviderce to prove there
will be plenty of gold in the world
for decades to come and that the
real risk to be guarded against in
planning a restoration of the gold
standard is that of an excessive supply.
The Brookings experts deny that in
adequacy of the world gold supply was
q factor contributing to the decline
of prices between 1924 and 1929.
They deny also that there was any
immediate prospect of serious de-
cline in gold production before the
coming of the depression.
Moreover, they claim the supply now
i, is sufficient to justly restoration of
the gold standard as soon as it is con-
sidered otherwise desirable.
Written by DIR. c. o. Hardy.
Third in a series of studies of f1nan-
cial developments in the United States,
/ the treatise was written by DR.. Charles
20. Hardy. member of the BrookingS
: staff who, four years ago, wrote
detailed analysis of credit policies OF
the Federal Reserve system. Entitled
"Is There Enough Gold?" the latest
report makes a definite affirmative
answer.
Foremost among the recommended
tions of DR.. Hardy and his Brook
, ingS colleagues is their conclusion that
huge gold reserves should be estab-
lished in all countries in event OF
restoration of the gold standard in
its postwar form.
I'VE believe that if the gold stand
ard is restored" they declared, the
objectiveS stated can best be achieved
by establishment of some plan under
which a large part of the existing
: world gold stock would be segregated
in extraordinary reserves. These re-
serves, which would not necessarily be
. under the control of central banks,
would be drawn upon to take care OF
extraordinary transfers of balance
from one country to another, but
would not be taken into considera-
Z ton in determining the credit policies
of central banks and other monetary
authorities in their attempt to control
the volume Of domestic credit"
The gold reserves are necessary, DR..
Hardy believes, to prevent monetary
disturbances which may result from
. the huge transfers of floating credit
dissociated from shifts in the balance
OF trade and long-term investments
The report takes issue with the find
ings of the gold delegation appointed
by the Financial Committee Of the
League of Nations in 1929 to study
the relationship between the price
level and the gold supply.
While the delegation did not offer
evidence of the existence of a gold
shortage, it presented a dismal pic
ture of the future. Predicting ex-
haustion of the South African mines,
the financial research wizards an
nounced a serious inadequacy would
prevail by 1910.
After presenting tables of statistics
indicating the gold output of the
world has enormously increased, the
Brookings economists declare 1t seems
clear the estimates furnished to the
gold delegation greatly exaggerated
. the prospect of an early decline of the
gold-mining industry.
1t Is estimated that since 1892, ac-
cording to the Brookings figures, ap-
proximately 1,124,355,000 ounces of
gold, valued at $23, ,675,122, have
been taken from the earth. Gold has
been found scattered over practically
the entire world, except for the areas
around the two poles, which have not
as yet been seriously prospected.
With an allowance of 2 per cent
for what has been worn out and lost,
the present world stock is estimated
at $21, ABS, 100000. If this gold were
Jumped together in the shape of a
cube, the cube would measure only SO
feet on each side.