Piggy Bank

In his gold war against the U.S., Charles de Gaulle in the past 20 months has amassed a huge hoard of bullion. With Finance Minister Michel Debre acting as De Gaulle's Goldfinger, the French this year have been cashing in dollars for gold at a $54 million-a-month rate. Last week the Bank of France reported that as of Aug. 1, France had hoarded $5.13 billion in gold.

Gold now constitutes 86% of all French reserves, compared with 73% at the end of 1964. Moreover, the government is squirreling away the precious metal at such a rate as to account for the entire net U.S. gold drain so far this year. Because France lost millions when the British devalued the pound in 1949, De Gaulle mistrusts keeping much of his country's reserves in either pounds or dollars. More than that, attacking the dollar helps him to reduce U.S. influence inside and outside France.

Now, even to some Frenchmen, the De Gaulle-Debre policy is beginning to appear piggish. Reflecting widespread sentiment, Cartoonist Jacques Faizant last week portrayed France as a piggy bank stuffed with gold instead of the truffles that most Frenchmen would prefer. The Paris daily Le Monde bluntly labeled the French accumulation of gold as "sterile stockpiling."

To add insult to injury, France insists on physical possession of most of its gold. Other nations are content to leave most of their holdings in the New York Federal Reserve Bank's airtight vault 85 ft. below Liberty Street in lower Manhattan. There, gold ingots worth about $12.9 billion are stored--as against the $10.1 billion worth residing in the famed U.S. Bullion Depository at Fort Knox, Ky.

The French trust no foreigners. They use the Federal Reserve Bank of New York only as a shipping clerk. In New York, the American seal is erased from the ingots, and the gold is sent--whether by plane, ship or submarine is a closely guarded secret--to France, where most of it is stored in the Paris vaults of the Bank of France. But there is considerable evidence that many millions of dollars worth of ingots, presumably for supersecurity reasons, are hidden away in heavily guarded caves in the French Alps.

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