EMBARRASSING GOLD

Evening Post, Volume CXXII, Issue 155, 29 December 1936, Page 10

EMBARRASSING GOLD

AN AMERICAN PROBLEM

A financial authority in New York, writing on November 21 to a Wellington resident, referred to the accumulation 6f gold in the United States. He said: "We are being plagued by a continual increase in our holdings of gold, which is beginning to worry the Federal Reserve. That is one serious problem that confronts the Treasury. "Are we coming face to face with the necessity of letting gold find its own level and have a market here as in London? If so, it would tend to prick the gold-mining bubble which we are blowing in Canada and elsewhere. It seems heresy to think of allowing gold to find its own level, but what are we to do with it? It will then take its place with silver." The flow of funds from Europe to the United States was also recently referred to by the Financial Editor of the "Daily Telegraph," London., Ihe flow, the writer observed, was persistent and large. Some indication of the extent and strength of the flow is afforded by the latest figures of the gold movements to New York. The National City Bank in its November review gives the additions to U.b. monetary gold during October as 186 000,000 dollars, representing 176 000,000 dollars as actual imports. Of this 94,000,000 dollars came from France during the first seven days of October, and arose through transfers contracted for prior to the devaluation of the franc. . Some 52,000,000 dollars came from London, with 26.000,000 dollars more to come. The London gold is dehoarded metal, and it remains to be seen how much more will come out oi hoards. But the effect must be to increase bank reserves, which represent money which will remain until more settled conditions prevail. This flow of gold creates fresh embarrassment in raising the banking reserves and brings the total -net imports for the year to 363,000,000 dollars and since the devaluation of the dollar to 3,739,000,000 dollars. The United States gold stocks for the first time exceed eleven billion dollars, or half the monetary gold stock of the world.