Evening star., 1940-02-18

<Ao Illc GuIOpCdu WAL COllCllucS 10
drain the resources of the belligerents,
this country's accumulation of the worlds
gold continues to increase. Thus far no
person in authority has come forward
with a solution for the problem created
by the unwelcome influx of this none
tary metal 1t WILL however, be major
problem of the peace settlement.
Adolf A. Berle, jr., an Assistant Sec
retary of State, recently suggested that
after the war this country may be willing
to make gift of some Of our gold to help
reconstruct Europe. Speaking before the
Political Union of Yale University, he
said:
"It seems fantastic today to suggest
handing over some of our accumulated
gold as free gift to re-establish inter-
national currency, to let other nations
set their houses in order and thereby re-
establish trade and normal life. But this
may not seem nearly as fantastic few
years hence"
Mr. Berle added that by such an ap-
proach to the problem I'VE shall learn at
length that we hold the tools in our
hands to remedy many Of the injustices
in our own life"
More Than Doubled.
How has the United States accumu-
lated this gold reserve which every expert
says is dangerously large now and will
continue to increase? IN 1929 our gold
stocks amounted to 189 100000 ounces, or
81 per cent of the worlds supply; today
they amount to 510,00O0O0 ounces, or
slightly more than go per cent OF the total
accumulation. Meanwhile, the non Amer
ican supply has increased only from
310,000,000 ounces to 326,000, 900 ounces.
Our monetary reserves have increased
from about $4,000, 100000 in gold in 1929
to ST., 1914, Co., 900 as Of the end of last year.
In 1899. our net imports of gold reached
the almost unbelievable total of 1884,
Isl 900.
Part of the answer is the fixed Amer
lean payment of s35 an ounce for all
newly mined and foreign gold. Anothe:
part is the disturbed world conditions
Senator John G. Townsend, Repubi-
can, of Delaware, has directed attention
to the s35 price, pointing out that it is
q subsidy to the foreign ld-producing
countries, particularly Soviet Russia.
But he has offered no solution. He has
merely recommended that Congress and
all of us study the subject now, before
we find ourselves with all the worlds
gold in our lap" Other Senators, Rep
resentatives, bankers, economists and
lay experts have demanded that the gold
purchases be stopped, or that the price
be reduced, say to $25 an ounce, or that
embargoes be levied against certain
countries, or that gold specie payments
be resumed. To all these proposals the
Treasury and the Federal Reserve Board
have ready answers; yet these two
agencies, while admitting the serious
ness of the problem, have no solutions
of their own except that we keep on ac-
cumulating and hope for the best.
The general official opinion is, how
ever, that there is little danger that the
United States eventually will have a
virtual monopoly Of gold and be in the
position of the boy who got monopoly
of the marbles in the neighborhood and
found he had no one to play with. The
explanation given is that as long as the
British Empire produces about go per
cent of the annual supply, London will
Join the United States in keeping inter-
national trade on gold basis. At $35
an ounce, the Empire regards gold as
one of its most lucrative commodities.
Price Arbitrarily Fixed.
The price of $35 was fixed by presi-
dental proclamation in January, 1884,
after this country had been off the do
mestic gold standard for about 10
months. At the time Mr.. Roosevelt was
greatly influenced by the late Prof.
George F. Warren, professor of agricul-
tural economics and farm management
at Cornell University and the exponent
of the so-called rubber dollar" as the
means of raising commodity prices. Be-
fore the price was arbitrarily fixed gold
had found its own level" at between $31
and s34> The traditional price had been
$2067 an ounce.
Some New Deal monetary experts ad-
NIT now that the 1884 dollar devalua-
ton and the subsequent gold purchases