Grandstand Play

In April 1933, the U. S. dropped the gold standard like a hot cake. All exports of gold to keep the dollar at 100-c- ceased. Last January the dollar was given a new par of 59-c- and went back on what Washington liked to think of as a new gold standard. Gold poured into the U. S. from abroad to keep the dollar from climbing above par -- $880,000,000 of it at the new value. But from January until last week not one ounce of gold left the U. S. to bolster up a sinking dollar. The reason was simple; the dollar did not sink.

Fortnight ago nationalization of silver gave the devalued dollar its first bad sinking spell, and last week gold flowed out again. Manhattan's Guaranty Trust Co., which made the shipment, had to get the Government to sell it gold for export since no one but the Government now owns gold. Permission was given in a trice. S.S. Manhattan sailed with $1,000,000 of gold for France, $279,100 for Belgium. S.S. Scythia, which entered New York Harbor with $577,900 of gold from Britain, sailed back with it still aboard.

Such was the Treasury's answer to foreign skeptics who doubted that the U. S. would actually ship gold to support the dollar. The answer was practically shoved at them because the dollar had sufficiently recovered before the gold left the U. S., so that Guaranty Trust had no real need to export it. Financiers had a very good idea that the shipment was deliberately arranged by the Treasury, was a grandstand play to demonstrate that gold would be exported in the old-fashioned way.

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