Fate Of Gold
p. 17 · Read in the full issue
What Will be the Effect of This War?
MANY people with interests in the goldfields of Papua, New Guinea and Fiji will read, with trepidation, this paragraph from a London corres pondent, dated June: — “In London, where new ideas are slow to penetrate, the value of gold is being questioned for the first time since the Middle Ages.”
It was pointed out in this journal, many months ago, that the economic cataclysm in which the world now is involved, as a result of the war, inevit ably will affect gold.
For ten years prior to the outbreak of war. the price of gold had been held steady, and half the currencies of the world maintained at par, because the United States was buying every ounce of gold that was offered, at a price around £lO per ounce.
Most of the world’s gold production, therefore, was flowing to the United States, with the result that, in 1939, two thirds of the world’s recorded gold was stored at Fort Knox—“a hole in the ground in Kentucky”.
Men who are interested in this kind of thing need only sit down and think quietly for a while to realise that such an economic paradox could not continue indefinitely—the thing must have blown up of its own accord before long. As it was, the position was temporarily relieved by the war.
To-day, at least more than half the trading countries of the world are under Axis and Japanese domination—which means that they are not interested in gold in relation to currency. The Rus sians, realists always, who had during the last ten years greatly developed their gold industry in Siberia, have now allowed their gold production to dwindle and, instead, are concentrating on the production of metals which have a defi nite usefulness in war.
But this does not mean that gold is going to lose all its value. Recognition of gold as a precious metal is ingrained in human nature—gold has been recog nised as a precious metal throughout thousands of years of our history, and will continue to be.
Nevertheless, clarification of the gold position is due, and overdue.
Mr. W. W. Bolton, a well-known and highly esteemed member of the English colony in Tahiti, attained the venerable age of 84 on July 3. “He is the youngest man of his age I have ever known.” writes our Tahiti correspondent. “He is strong in body, clear in mind, and is as keenly interested in all worthy things of life as the average man of fifty”.