Ww does America really mean to do about gold? Is there any chance that she will stop buying or will buy only at a lower price? For years the central question of American gold policy has been an enigma for gold producers, for holders of gold-mining shares, for the foreign exchange market, for the business man who is affected by the foreign exchanges—indeed for the future course of business activity as a whole. If in the spring of 1937 we had possessed a clear and unequivocal statement of official American views about gold, the disastrous gold scare Would, have been avoided and the whole subsequent course of world trade might have been different, states the "Financial News" of May 16.
Nor did the end of the gold scare itself finally put to rest all doubts as to America's long-run intentions.
as true today as it was two years ago that the annual production of gold is substantially in excess of the normal absorption by central banks and that the vast bulk of this gold production is in effect finding its way towards the United States. The problems of gold overproduction and Zold maldistribution remain; their Solution has only been postponed by the breaking of the 1937 boom and the artificial hoarding demand whipped up by the continuing political tension, Hence it is not surprising that an undercurrent of uneasiness as to the future of gold persists and finds expression in such things as the failure of the Gold share market fully to discount last year's rise in the' sterling price, as contrasted with the immediate response to any development (such as the Bank of Eng-Jand's revaluation this year), which cañ be seized upon as reassuring, of gold? Is there any likelihood that Wwe will get so much of the world's gold that we will get stuck' with it? 1s it not true that foreigners are getting shares of our productive industries and giving us in return gold which no use for?"
On the first point, Mr. Morgenthau agrees that America doubtless has more gold than is needed to provide a basis for the monetary system, but ne contends that "it is impossible to say with certainty that we have too much gold" for the purpose of settling international accounts at a time when the political and economic outlook is so uncertain. As to the of being "stuck"
"The danger that gold will no longer be used as a medium of international exchange is so remote as not to merit serious consideration."
Text read from the printed page and cleaned; old type leaves the occasional error.