Gold

The creation of vast international debts by the War has led to considerable pressure on the gold standard system. The amount of gold in the world is smaller than the debts owed by foreign countries to the U. S.; moreover, half of the world's gold supply is here already.

In countries whose currencies are not on a gold basis, and not at par with dollars, a premium is consequently placed upon gold production. This is largely the reason for the record gold production of the African Transvaal field. In July last, the Rand produced 829,437 ounces of gold, the highest output for a single month on record.

Ordinarily the African gold output is sent to London where it is exported to the highest bidder. Owing to the premium on the gold dollar in foreign exchange over the paper pound sterling, the flow of gold from London has been mainly to this country.

Gold already in England is, by British law, prohibited from being exported. Thus it is only the new Transvaal gold that ultimately comes to Manhattan. On the other hand, the U. S. is regularly taking so much of the Rand gold output, is gradually adding to her already enormous supply of the yellow metal and, as long as the gold standard is adhered to here, must continue to do so.