Courtesy Reuters

Gold: Master or Servant?

"Man-hours are the only real wealth and the only real capital. Gold is worth nothing anyhow, -- as the financial writer of one of our greatest newspapers, greatly daring, pointed out, some weeks ago. We spend millions of man-hours digging it out of the ground, refining it, transporting it, and then in burying it underground again in vaults which cost man-hours to dig and make proof against assault. And if an earthquake swallowed the lot nobody would be any the worse if the controlling financiers kept the knowledge to themselves." -- The Airplane, London, October 4, 1940.

CHANCELLOR HITLER and his Finance Minister have loudly proclaimed that the German reichsmark, being based on productive labor, is a far sounder form of money than the American dollar backed by all the American gold. In the "New Order" gold will have no place, and the gold hoard of the United States will lose its value. Such statements have been branded by the American Economists' National Committee on Monetary Policy as a typical totalitarian attempt to destroy the confidence of people in democratic countries in their major social institutions. This Committee asserts that Germany cannot impair, much less destroy, the value of the gold stock of the United States, and declares that even if a victorious Germany should refuse to accept our gold, "our currency would still be more valuable because it is secured by gold as an asset than it would be in the absence of such security." This view is in harmony with a common American belief that the dollar is in some way strengthened because it is "backed" by great quantities of gold. We read, for example, in the last Annual Report of the Chairman of the Chase National Bank to its stockholders that, "Our financial strength is supported by three-quarters of the world's gold." Yet it is apparent that the present value of an ounce of gold is wholly determined by the fact that it can always be exchanged at the United

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