A TALE ABOUT GOLD

Poverty Bay Herald, Volume LX, Issue 18079, 4 May 1933, Page 8

A TALE ABOUT GOLD

.(Hey,wood Broun, in New York WorldTelegram.) Once upon a time—perhaps it was in the future rather than past—the three heads of government finance of England and America and France got together and decided that the 'method of storing gold in some urban sulpcellars was cumbersome and in certain circumstances even dangerous. They decided to take the gold supply of the three nations to a lonely little island in the middle of the Pacific. There it was stored under a small guard. Not much protection was needed, since only the head men and the guards were informed as to, the plan and the location of the island. The island was equipped with a radio receiving set, but it bad no means of sending messages. For 10 years everything) proceeded tranquilly enough. International obligations were satisfied by the simple device of sending a wireless saying, “Earmark nineteen million of the French gold for the United States,” or vice versa. At the end of 10 years the three financial heads decided to look in on the island to see how things were getting along. They just wanted to be on the safe side. A fast cruiser under scaled orders transported them to the spot. But there was no island. Some disturbance at the bottom of the seas had sucked down, the little coral eminence, and with it went the gold supply of three great nations. Two of the financiers were aghast. “Woe is me !” said one, and the other .exclaimed, “This is the greatest tragedy in the history of civilisation !” But the eldest of the trio was not much perturbed. He paid a passing, though rather perfunctory, tribute to the unfortunate guards who had died at .their .posts, but lie went on to say : “The gold that is gone is nothing.”

His companions looked at him with incredulity. “But how is international trade to go on?” they asked. “Just as before,” lie answered. “We can still Rond wireless messages and order earmarking. Who will be the wiser?” I will confess that I borrowed the anecdote from Morris L. Ernst and that I doubt that the incident ever occurred, arid yet it is basically a true story. The sanctity of the gold standard is largely a state of mind rather than a state of matter.

Of course, the economists have pointed out that the supply of the metal is somewhat limited and that the rate of new production varies only slightly. Still, there .is no sure guarantee that an even greater Klondike might not be suddenly discovered some fine afternoon and vitally change that situation.