THE HOARDING OF GOLD

Evening Post, Volume CVI, Issue 126, 24 November 1923, Page 6

THE HOARDING OF GOLD

According to the Paris correspondent of the "Morning Post," it is a commonplace for enormous hoards of gold coins to remain concealed by peasants in France. This assertion suggests characteristics in the French peasantry of which Balzac, and later de Maupassant, made such excellent use. The insecurity of riches following on the French Revolution and the circulation of worthless paper money will excuse the over-eager-ness shown by the French rustics to be quite sure of holding on to gold when it came their way. It may not be the chief factor in the delay of a return to the free circulation of gold in all British countries, as was general before the war, but the fear that the coins, once handed over the bank counters, would not return in the same volume as they went out is one of the reasons given for the continuance of bank notes as legal tender. The bank notes circulating in this Dominion, for instance, are backed to very considerably more than their face value by gold lying in the vaults of the banks; m fact, at last quarter, while the notes were reduced in number the gold reserve had increased. But there is a fear, and it is wellgrounded, that if sovereigns were as suddenly put into circulation as, under war conditions, they were legally substituted by paper, many of them would find their way to India and China, there to be hoarded or turned into jewellery' —a form of carrying one's savings about very well understood in the Orient. ■ \ .

Confidence expressed in the acceptance of money in the form of paper has never been a strong point with people like the cautious and exceedingly thrifty French nor with the,mass of the people of the East. Enormous business transactions are conducted by Indian and Chinese mercantile nrmson paper, but the people want something of greater intrinsic value, be it in copper coins or gold and silver money or ingots. They feel they know where they are with these; and they mistrust anything suggestive of debasement of poms. Concrete facts appeal with great force to them ; economic theories not at all. There does not seem to be any doubt about the probability of the hoarding of gold once it is released by the banks ; and jet, in the interests of stability of -currencies, the time must come when gold will be resumed. Perhaps it will take the fora of paying, on demand, so much gold to so much paper In that way, perhaps, the return could be gradually made, and the evils of hoarding to some extent mitigated or countered. In the meantime hoarding in European countries will no doubt continue with all the untoward things associated with it: loss by robberies, forgetting the exact place or under which tree the treasure was planted, and the tragedy, too, of old people murdered for their hoards, real or imaginary. The secreting of gold in coin and. other forms is no new thing, among the peasantry of France or of any other landwhere it can be come by; but the war and the circumstances arising out of it have given it a greater impetus. It is, after all, but symptomatic of a feeling of insecurity which the resumption of circulation of gold coinage, even to a limited extent, might do something to remove.