Evening star., 1939-02-19
A fixed and high price OF gold means a

q
lot to them.
Most gold miners are foreigners. For
eign countries produce more than five
times as much gold as our own mines.
Foreign countries like our gold policy
very much. 1t is like a grand dole to
them. They send their gold here and
buy from us goods that this Nation
sweats to produce. They eat our food
and clothe themselves in American
goods, while we take their gold in ex-
change, and put 1t back in the ground.
Americas Needs ProblematicaL.
The United States now holds about
$l4,7o0 900 900 in gold, or about STA per
inhabitant. Assuming that the only re-
naming monetary use for this gold, as
determined by the Macmillan Committee,
Is to settle our international debts, how
much of this vast hoard are we likely to
need in the next decade? No one can
tell exactly, of course, but an intelligent
guess Is: Only about two and one-half
billions, and there is really no certainty
that we will need any. The chances
rather are that we wilrkeep on receiving
more foreign gold.
The above estimate makes full allow
ance for the large foreign investments
here-the so-called hot money" or float
Ing capital, which theoretically can be
withdrawn in gold. 1t allows for a re-
turn of peace to Europe, and an attend
ant outflow of capital from here. It also
allows for our own very large invest
ments abroad. And it allows for our
favorable balance of merchandise trade,
which American official policy now seems
so anxious to increase with loans to de-
faulting nations in South America.
We now hold almost three-fifths of all
the gold known to be held by govern
ments and central banks outside of
Russia.
We have SO much gold in Kentucky and
elsewhere that Washington does not
know what use to make of it, OF the
400 900, 900. a small item of $780,
100000 has been tied up and put away,
out of harms reach, in the inactive part
of the stabilization fund.
Another $712 900 900 has been similarly
stored, inactive, in the Treasury's gen
eral fund" Other hundreds of millions
have been sterilized, in effect, by the
increased reserve requirements of the
Federal Reserve System.
In short, this country is gorged with
gold. Yet out of respect for horse-and-
buggy traditions, we keep on buying gold,
paying dearly for it.
Aids U. S. Exports
When gold arrives here, the Treasury
calls 1t money and issues dollars against
it. For each ounce Of gold it pays $35.
When foreigner sells gold here and
spends the proceeds for American gaso-
line, cotton, wheat, automobiles, or other
goods, our manufacturers and exporters
feel fine. The trade statistics show a
rise in merchandise exports. That makes
jobs.
But the fact that America is giving real
wealth for the imported gold does not
occur to many people. The fact that
foreigners get real wealth in return for
what is really receipt in the form of q
yellow metal is overlooked, because the
merchandise exports which are eventually
caused by the gold inflow make jobs in
the cotton fields and auto plants.
But the cotton, gasoline and autos ex-
ported are consumed abroad. The bene-
fit goes abroad. If we produced cotton
and autos and gave them away at home,
that, too, would make jobs here. Then
the consumers benefit would be an Amer
ican benefit.
Some people imagine that large gold
hoard will be very valuable to us in time
of war. Such a hope is no Justification
for the continued purchase of gold when
we already have over $14,700, ,000, 900 of
1t. Yet we buy more gold every week,
from our own mines, and from abroad.
Mostly we buy it abroad.
And the rate Of purchases is not dimin-
ishing. In no year since we boosted our
buying price to $35 did we import as
much as In 1898. In 1895 we bought, net,