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Hokitika Guardian, 20 August 1931, Page 4

Tub accumulation of large stocks of gold in any country does not mean that prosperity prevails there (says the Magazine of Wall Street), but rather the reverse, since gold that does not foster active credit is useless. Tn its present issue, that publication says: “To men, as to nations, the possession of gold is a symbol of prosperity. Letts see. The United States has more gold than it ever had—and less prosperity. The banks are bursting with gold and barely meeting their dividends. Our great corporations have immense reserves of gold equivalent and their business is dwindling. All the nations are sending gold to us and our business with them is fading away. The truth is that large accumulations of gold -are an inverse measure of prosperity. Probably fourfifths of the gold in the Federal Reserve Banks is idle—and nobody ever contended that idleness makes for prosperity. The fact is that except as it is used as the basis of bank credit gold has no relation to prosperity. But when there-is no business, there is no credit and gold is useless. In other words, business gives gold a utility value. Gold is dead until vitalised by commerce. The piling up of gold in any country does not signify that it is prosperous; it merely shows that that country is giving other countries more goods than it receives; that it is parting with more usable wealth than it is getting back. To-day the United States -is receiving gold and going without goods it would like to have And because it is receiving gold it is seeing less than it would like to. When we are prosperous, which means that credit is being freely extended, we need gold because it is the one commodity that mankind has agreed to accept on balance in place of the goods it would rather have. It is merely a balancing item -in the offsetting of credits -against debits.”