THE GOLD PROBLEM

Evening Post, Volume CXVI, Issue 80, 2 October 1933, Page 8

THE GOLD PROBLEM

HOARDING IN AMERICA

PROSECUTIONS TO COME

Tho question whether gold hoarders will be prosecuted is to be decided by Attorney-General Cummings, says the "New York Times;"

The Government's drive to get gold back has brought a vast reduction in gold and gold certificates in circulation since March. On July 31, 571,849,000 dollars in gold and gold certificates were outside the Treasury and Reserve Banks, a reduction of 649,052,000 dollars sineo tho President's order eamo into effect.

Keccntly Mr. Cummings declared that wilful hoarders of gold, who after final warning failed to return their holdings to tho Treasury ,or Federal Reserve Bank, would be prosecuted. Owing to tho long delay in starting prosecutions somo persons have felt sceptical that the Government actually will go into the Courts. They have taken tho attitude that tho threats of prosecution were merely designed to bring about the return of gold.

Officials at the Justice Department, however, insist that wilful violation of the edict will result in the presentation of cases to Federal grand juries. They express confidence that tho gold impounding order would stand the test of the Courts, a question that has caused widespread speculation.

If Mr. Cummings carries out his ylan, the first move will be a final warning to the 200 or more individuals found by Department of Justice agents to have refused to turn in their gold. Secondly, the names of the hoarders will bo givciK to the newspapers for publication. Then the cases will go to the grand juries. . '

Mr. Cummings expressed confidence that niost of the hoarders would relinquish; their gold before prosecutions started. All. those holding gold are now technical violators under the Presidential order. It was pointed out, however, that should a hoarder turn in his gold even after he is brought before tho Court, that would have a strong bearing on what' action was taken. ' . .

No intimation has so far boon given at the Treasury or by other Administration officials as to the permanent gold policy that must be worked out, probably within the jiext year. The supposition has been that gold "will bo impounded and maintained in the Treasury and Beserve Banks, subject, to withdrawal on licence only. That would mean the end of coinage of gold and that comparatively little coin would remain in circulation. :

There is no figure available on -the actual amount in circulation. Officials pointed out that a considerable amount of the gold and certificates listed as "in circulation" has been lost or destroyed, particularly the certificates, while a large amount has been taken to foreign countries. Tho amount listed as "outstanding" is not taken as the actual amount hoarded.

Officials declared that gold in circulation serves no useful purpose, either to the Government or the .holder, as long as other currency is maintained on a gold parity. A gold dollar will buy only a-dollar's worth of merchandise, the same as a paper dollar. On the other hand, when impounded in the Treasury gold may bo used as the basis for the issuance of two and a half times its value in paper money.

Begulations on the export of gold ore have been relaxed by the Treasury, according to instructions sent to collectors of Customs. Under tho order, fol lowing a ruling by Attorney-General Cummings, gold in the form ofunrotorted amalgam, cyanide precipitates, concentrates, and unsmolted ore may be exported. The gold embargo, adopted in March, prohibited the export of bullion, coin or golcl certificates. It has been pointed out that the export of ores is unimportant because of their bulk and the expense of shipment.