Golden Avalanche

Golden Avalanche

Golden Avalanche

Golden Avalanche

Excerpt

In 1923 certain British economists, in characteristic half-serious, half-humorous vein, proposed that, in the process of paying reparations and inter-Ally debts, Europe should send her monetary gold to the United States, should then turn her back on the gold standard once and for all, and leave this country, quite literally, holding the bag. In the relatively tranquil period that followed, this suggestion, even as an economist's whimsy, fell into the limbo of forgotten things. Today, however, the suggestion is becoming altogether too real. In consequence, the United States is confronted with a gold problem of the gravest character, one that is almost certain to plague us for many years to come.

If, in 1923, our debtors on war account had sent us their gold supplies in part payment of their debt, we should, in effect, have obtained the gold gratis, rather than at the heavy cost at which it has in fact been acquired. The receipt of gold in payment of war debts would have cost us nothing beyond what we had already transferred to our debtors.

On the principal of our war loans we have not yet been able to make any net collections and, presumably, never will. Even such interest as was paid on those debts was more or less directly dependent . . .

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