The Wilmington morning star. [volume] (Wilmington, N.C.) 1909-1990, 1944-05-24
Is Idle Gold ReallyIdle
BY NEAL STANFORD

A man can sit still and still be busy. A
gun can be unused and still be useful A
dollar resting in a pocketbook is far from
lmpotent And so it is with that gold hoard
or most Of it which lies busily idle" down
at Fort Knox, Kentucky.
The major part Of that gold pile of S21 3
billions between two-thirds and three-quarters
of it,, study of Treasury figures indicates,
is supporting Americas financial economy.
And until the country changes the rules, which
1t can do again as it has done before, some
Sl4 or SIS billions of that gold hoard is figura-
lively busy snoring up the Nations monetary
system.
While the Treasury doesn't put it quite so
bluntly, what its figures show is that at the
moment only about ST billion of that sum is
not actually needed. However with gold flow
ing from this country to other countries at
the rate of 81 billion year, that figure of 81
billion is more liable to decrease than in
crease IN the immediate future.
Very roughly and quite unofficially, it is
possible to estimate that the United States
will have some billions to help reconstruct
other nations currencies after the war if it
wants to, but not much more than 5000 OOO.
900.
The Treasury's gold holdings may all look
alike but they don't all act alike or work alike.
Some belongs to the sterilization fund which
Will be the nucleus of any American con-
trlbution to an international financial stabli-
cation fund. A large part of it is required to
back up the Nations currency lesser
amount is needed to support bank deposits.
Using figures drawn from recent Treasury
reports and Federal Reserve bulletins one
can strip the TreaSury'S present gold holdings
from S213 billions to ST. billions of socalled
idle funds in three quick subtractions.
Present size of gold holding: s21 300, 900, 900
First subtraction the 81 800 OOO 900 in the
Sterilization fund which is some of the gravy
obtained at the time OF dollar devaluation
and never put into the Nations financial blood
stream, if you'll pardon the mixed metaphor
That leaves SIG, 100000.
The Nations common currency, Federal Re-
serve notes, requires a 40 per cent back
ing in gold. There is S18,0O0OoOOOO worth
of gold required to be held to back
the currency Gao per cent of $4,000, 900 OOO-
or S7200,000, 000) That leaves only $12 3OO
100000
But another tidy sum of gold is being used
| to support Federal Reserve Deposits with 81
per cent gold The law says it should be ir
gold or lawful money but it's doubtful if there
enough lawful money other than Federal
Reserve notes - to support the present size
of deposits. Such money would have to be
withdrawn from circulation to be so used
With $15,000000,000 of such deposits requiring
S. 200 100000 This third reduction brings the
figure down to 81, 100, 900, 900.
What should it do with it? Some of it - moi
quite another billion dollars will be added
to the sterilization fund and put in the genera
| ''kitty' for stabilizing international financia
relationships if the United States joins the
recently proposed setup. 1t has been suggest
ed that the United States spend some of if,
gold holdings accommodating stock piles of rub
Der, tin, iron and other strategic materials
It has been recommended that the T1niter
States buy strategic bases if it cannot lease
them. 1t has also been proposed that the Unit
ed States divide its gold with other nations te
give them bigger stake in the metals future
But unless the United States changes its
gold requirements for currency and deposits
it will not according to every indication to
day, enter the postwar era with more thar
So'Uoo,ooooo o or SO of what can be reasonabl,
oaneu lule gold 1t IS significant that ir
; recent testimony before the House Foreigr
: Affairs Committee the adequacy of the Ma
ton's gold supply to meet postwar needs wa:
seriously questioned; also that Undersecre
tary OF the Treasury Daniel w. Bell has adj
vlsed the House Ways and Means Committee
l mat the problem of a squeeze on gold rather
than plethora of gold might need investiga
ton. The combination of physical dleness ane
bookkeeping activity regarding gold is wha
confuses the layman.-Christian Science Moni
tor
In Germany men are now limited to 10 hair
cuts year. They might follow the exampl.
} of their Fuehrer-and tear the stuff out by
the roots.
To punish his recalcitrant generals, Hitle
might try sentencing them to spend nigh
: in Berlin, Or any other big German town