GREAT GOLD MYTH.

Hawera & Normanby Star, Volume XLII, Issue XLII, 6 January 1923, Page 10

GREAT GOLD MYTH.

IS THE GOLD RESERVE A

FALLACY?

(By St. John Ervine in the Daily Mail) A few. weeks ago, while in Switzerland, I received a great shock. I | changed an English note into Swiss I money, and was given, in addition to some silver and nickel coins, a gold piece! The concierge of the hotel handed this gold coin to me with the air of a man to whom gold coins are familiar. He did not make a speech as he gave it to me, nor did the orchestra come out I and play the Swiss National Anthem. [ For one wild moment I thought that 1 he was taking advantage of my being , a foreigner and was trying to pass spurious money! i "What's this?" I very nearly said, I turning to look for a policeman, but i recovered myself in time. I took it j away and jingled it on stone. It had j the sound which I dimly remembered Ito have heard from sovereigns and half-sovereigns in the remote period of i time when such coins were circulated . in England. ! It was, undeniably, a good gold coin, ' and I cannot tell you with what emoj tion I contemplated it nor how astonj ished I was at finding any European ' country still in a state to mint and <rir- ■ culate coins of gold. j I remember a year ago, in Paris, being presented with a postage stamp, enclosed in a disc with an advertisement of pills on its back, for change. I j remonstrated with the man. "Surely," said I, "the Republic of France can do better than this!" j He shrugged his shoulders—Frenchmen do shrug their shoulders —and showed me a silver coin, the only one he had, which looked as if it had been knocked about by Big Bertha. And yet, despite its lack of gold, the Republic carries on. Few of us have seen gold coins for several years. There must be thousands of young men and women in England to-day who have never seen a ! gold coin. But we survive. And suddenly J realised that one of the great economic myths had been blown up. We used to be told that the . richest nation, the most secure nation, in the world was the nation which bad the largest gold reserve. The United States ia so impressed with this theory that it actuaTiy keeps large quantities of unminted gold for emergencies, j But we have now discovered that a gold reserve may actually be ruinous, to a nation. The United States possesses nearly half of the total gold of the world, and its unemployment figures are double those of this country. Mr Hoover lately asserted that the Allies could pay the whole of their debts to America in gold. I doubt it, but if tney- could, and were to do it, they would probably ruin America; for the gold game is only a good game for so long as everybody consents to play it. "If the rest of the "world is content with paper money, then a gold reserve of any dimensions is useless. But the plain truth, becoming clearer every day, is this, that it is not gold reserves that make a nation rich, but work. If every piece of gold we possessed were taken from us we should still retain riches while our people have industry and the will to work. When this fact penetrates the skulls of political economists and politicians a revolution will have been made