Evening star., 1936-07-13
Figures
What They Mean.
BY A. A. PATTON,
Associated Press Statistician.

NEW YORK, July 13.-Although
most nations have abandoned the old
gold standard, the world Is absorbing
the precious metal in the biggest VOL
ume ever known.
Africa's Rand-World's No. / pro-
ducer-had the largest June save one
in its history, with the total for six
months gaining 5.3 per cent over last
year. World gold production for the
first five months this year was the
best on record at approximately s425,-
100000.
Increased Purchasing Power.
Back of the enormous expansion In
gold mined is its sharply increased pur-
chasing power in terms of other COM
modities. In 1929, when the gold
standard prevailed in most countries,
its price was fixed automatically by
the exchange value of currency. In
the United States, for example, an
ounce of gold was worth S2067 in
currency at the Treasury. You could
either sell gold to the Treasury or buy
it, in any amount.
Prices for ordinary commodities
tin. sugar, hides, etc.-are set in the
market place by demand. supply and
tariffs.
The onslaught Of depression drove
these prices down 40, so, 60 per cent,
as the case might be. But the holder
of gold could still get s2067 an ounce
for his gold, turn around and buy con-
siderably more wheat. cotton. rubber
or whatever than he could in 1929 for
the same amount of the yellow metal.
When the world tumbled from the
old gold standard, this disparity was
accentuated. The United States
Treasury, for instance, bid up the
price of gold and now pays s35 an
ounce.
The metals premium was bonanza
to the mines. World output has stepped
up so per cent since 1929, and
it's value, measured in the devaluated
currencies of the world, is at least $50
per cent.
Largest Beneficiary.
The largest beneficiary is South
Africa and its Rand, which turn out
more than one-third Of the yellow
metal. Soviet Russia ranks second
with 18 per cent of output; United
States has IL per cent and Canada IL.
The most impressive expansion of
production during the depression was
Russia's, up almost skiold. United
States and Canadian output increased
by about half. The Rand's was prac-
tically unchanged.
Where has this huge increase In
production gone? Almost half has
been gobbled up by the central banks
of the world Equalization or stabili-
zation funds operated by England and
the United States have absorbed a
large slice of the remainder Hoard
ing took a big toll in the aggregate,
especially in the first quarter of 1886
Conditions Upset.
The jittery flight of capital from
country to country. upset international
trade conditions, currency devaluation
and lack of confidence have made the
gold holdings of some nations top
heavy and others too small.
The world gold supply-excluding
secret exchange funds is distributed
roughly as follows: United States, 46
per cent; France, II per cent; Eng
land, 7 per cent; Russia, 4 per cent;
Spain, 3 per cent; Belgium, per cent
All the other countries divide the
remaining 20 per cent, including such
powers as Germany, Japan and Italy
The effect of this huge mass of gold
on prices Is expected to push them up
Cheap world credit. armament pro-
grams, the low starting level of prices
(below the lowest point ever touched
between 1900 and 1930) and the SLOW
ing down in the increase of popula-
ton growth point to the likelihood
OF a continued rise in commodity
prices" the latest Federal Reserve Bull
letin states.