"What the Gold Standard Means" (Artikel von 1932)

verfasst von greenspj, 28.08.2002, 05:23

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http://www.goldeconomy.com/article.php?sid=211

"What the Gold Standard Means" (1932)
Posted on Tuesday 13 August @ 14:40:55

Editor's note: My wife recently bought a December 1932
issue of Good Housekeeping. She bought the periodical
because she was interested in some of the articles on
homemaking. However, buried within the issue was a
one-page article defending the American gold standard...

I found this very interesting given the fact that this
was right before the U.S. not only went off the gold
standard, but outlawed private ownership of gold
altogether. I have reprinted the text on TGE so you
can see what American housewives were reading about
gold back in the early 1930s. -- M.C.

What the Gold Standard Means
By Ruth Boyle

from the December 1932 issue of Good Housekeeping.

More gold passes from hand to hand during Christmas
week than at any other time of the year, for gold
pieces are the most attractive form in which to make
a gift of money. This gold goes back into the banks
in a short time, and during the rest of the year,
most of us never see a coin of the yellow metal. At
present, however, because of the wide discussion of
the gold standard, we look at the bright coins with
much more than usual interest.

Our attitude toward gold money is curious. Ordinarily
we prefer paper. If we were cashing a check for $100
and the bank offered us a choice of bills or gold,
we would ask for bills because they are lighter and
safer to carry than coins. We exchange bills every
day without a thought that intrinsically they are only
so much paper - worthless except for the fact that
they are notes backed by all the taxing power and
prestige of the United States. Unconsciously we
register our faith that if we wanted hard money in
exchange for our bills we could have it. We believe
that the banks and the Treasury would open their
golden store and satisfy our demand. But if for some
reason our faith that we could get gold if we wanted
it were weakened, we would all rush to convert our
money into gold.

To understand this seeming paradox - everybody wanting
gold yet nobody asking for it and using it - it is
necessary to understand what our money system is and
what it means to be on the gold standard. As I write
this, the United States, France, Switzerland, Belgium,
and Holland are the only important countries in the
world still on a gold basis, but before the war, except
in China, India, and some Latin American countries,
all the leading nations of the world had adopted the
gold standard. Silver and copper pieces are used merely
as a matter of convenience. Everybody knows that a dime
does not contain ten cents' worth of silver, nor a cent
a cent's worth of copper. They are simply token money.
But everybody recognizes gold as money. Everybody is
sure of its worth, whether it is coined or uncoined,
all over the world.

In the United States being on the gold standard means
that the government offers to pay a fixed price, $20.67
an ounce, for all gold brought into its mints. Its
currency is exchangeable for gold at the rate of 25.8
grains of gold for each dollar certificate. In other
words, the government agrees to buy and sell gold
freely at a fixed price, and it stands ready to meet
its obligations, dollar for dollar, in gold as far as
it is called upon to do so. If it should fail in these
respects, it would immediately be off the gold standard.

All our government, most state and municipal, and many
commercial bonds are payable in gold at maturity if the
holder demands it. This seldom happens because ordinarily
we receive a check which we deposit in the bank and draw
upon in paper currency. Experience has taught us that we
can always obtain gold in exchange for paper money, so we
prefer for the most part to leave it where it will do the
most good - as a reserve in our banks and in the Treasury.
Today, as a rule, less than eight percent of our gold
stock is in circulation.

Why do we feel that it is important for our country to
stay on the gold standard? We know that the world got
along for centuries without it, and even now, as I have
said, there are only a few leading countries which have
not had to suspend gold payments in the present crisis.
The reason is that unless paper money is well backed by
gold, there is no monetary security, and without monetary
security trade and commerce languish. In"A Primer of
Money" by Donald B. Woodward and Marc A. Rose - a book
about money and banking which I have found as easy to
read as a newspaper - is this explanation:

"The gold standard is a powerful force in establishing
the same price level for commodities everywhere. Price
is the amount of money exchangeable for a stated amount
of goods. Money is the same everywhere - It is gold. So
price measures the ratio of the scarcity of money gold
to the scarcity of any given commodity. If wheat on a
certain day is scarcer than gold in Italy, Italy naturally
offers to increase a little of the amount of gold it is
willing to exchange for a bushel of wheat. In Australia,
on that same day, wheat is more abundant than gold.
Australia thereupon ships wheat to Italy, and takes gold
in payment. This will continue until there is a balance
between wheat and gold in both countries. That is the
theory of price stated as simply as possible. And it
works. The process goes on every day, in almost every
commodity, but its very celerity, continuity, and
smoothness cause it to attract little attention in modern
times. It is only when the gold system breaks down in one
or more of the nations that we see how quickly trade
dries up, discouraged by the difficulties of dealing with
fluctuating moneys, frightened by the hazards involved."

The most impressive evidence that the gold basis is
worthwhile is that every country which has been forced
off it in the past has struggled to come back to it.
During the past year, we have heard much talk that this
country might follow England and suspend gold. This is
not likely so long as we keep the credit of the country
good. If we printed huge amounts of currency which could
not be backed by gold, if we spent and went into debt
recklessly, foreign countries would demand that we pay
our debts in gold, and our own citizens would justly
look askance at paper and demand the precious metal.

If everybody wanted gold all at once, there would not
be enough to go round. Then automatically we would go
off the gold basis. But this cannot happen so long as
our people and our leaders are determined to keep Uncle
Sam's reputation as the best credit risk in the world."

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gesamter Thread:

• "What the Gold Standard Means" (Artikel von 1932) - greenspj, 28.08.2002, 05:23
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