Going Gold

Last week, for the first time since September 1934, gold was shipped from the U. S. to Europe. Stout little kegs containing $20,600,000 worth of yellow metal were headed up in the Assay Office in Manhattan, delivered to ships bound for France and The Netherlands. A reversal of the movement that has added $2,700,000,000 to U. S. gold stocks since the dollar was devalued two years ago, the shipments were caused by the dollar's recent weakness in international exchange.

No one was particularly alarmed by the outgoing gold. Indeed, the only fear was that the movement would not continue long enough to make real inroads into the country's embarrassingly large gold hoard, now standing at more than $10,000,000,000. A large part of the metal that has flowed to the U. S. since 1934 represents foreign capital seeking safety or investment. Fear for the dollar or returning confidence in Europe or both would probably draw the gold away. And this possibility is the chief argument against Federal Reserve Board action to cut the present high total of excess bank reserves (TIME, Feb. 10). Gold shipments reduce bank reserves by a like amount.

Representative Wright Patman, puffy-cheeked, bespectacled leader of the House Inflationists, had his own explanation for last week's gold shipments: It was all a plot by the "big bankers" to scare Congressional Inflationists, since issuance of printing press money would cause the bankers to lose "some prestige." But, cried the chubby Texan, "Any shell game does not go with us!"

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