Show WHERE DOES THE GOLD GO national finance the average citizen sees little gold considerable sid erable of it meets his eye in the shape of very thin leaf spread out as a decoration in hotel corridors and on signboards sign boards possibly he has a gold wates and his wife owns a ring or a brooch or two once in a while a gold coin gets into his hands and he rids himself of it as quickly as possible for fear he should pass it off for silver change and yet new gold to the amount of worth comes into the world every year about half of which is employed industrially and the other hal is coined what becomes of it and why do we not see more of it in an article contributed to la nature paris july 8 mr L de launay attempts to answer these questions he writes gold i is a very special kind of commodity which long habit makes us regard as still more peculiar than it is in reality it is a commodity and whoever has thought a little about it has realized that when we exchange gold for wheat cotton or another industrial metal the two products of the soil put up one against the other are in reality comparable e As montaigne said when I 1 play with my cat who knows whether my cat is not playing with met me we pay for the wheat with the gold but inversely the gold is paid for with the wheat being merchandise gold is thus subject to the law of supply and demand and its price must vary with conditions we notice this little because the gold standard is now almost universally adopted so that a convenient convention leads us to attribute to gold a fixed price and ali all other substances appear to vary with relation to this one value it is a simple question of relative movement but the accident that has happened to silver once endowed with the same privilege might some day happen to gold and conceivably platinum might be able to occupy the point of advantage theoretically it is easy to conceive that a rise in the value of gold should show itself by a simultaneous and proportional fall in the values of all substances purchased with gold practically so many other factors influence these fluctuations tuat ions of price that economists often have trouble in ascertaining their exact direction bearing and origin it is none the less true that when the mines throw on the market every year of new gold this gold must find an outlet how is this found what becomes of the gold these are questions that more than one of our readers has surely asked an attempt at ail an answer is made by mr de launay using a recent interesting investigation vesti gation by andre conzet we have room only for his general results but some ot of the comments that he makes in passing are of interest por for example he thinks that the fact that the movement of raw gold is chiefly to london is to be explained by the fact that three quarters of it goes to english speaking countries then too the greater speed of the english lines of navigation and the better organization of english commence tend in the same direction with the result that almost all the raw gold goes first through the hands of four or five london re finers no iio matter to what use it is subsequently to be put michael chevalier once predicted a great fall in the value of gold by reason of the discontinuance of its industrial uses on the contrary these have increased steadily although the use for money has increased at an even greater rate to quote mr de launais Lau nays conclusion it if we return to the question asked at the outset namely what becomes of the new gold we see that a part varying from a half to a third with the cost of extraction and also with the changes in public prosperity passes into industry of the rest which is coined into money a very large proportion finally filially reaches the great government banks thus in the ten years from 1900 to 1910 of a total production ot of more than went to swell these reserves increasing them from to nearly and if to the government banks or treasuries we add the great credit establishments of the whole world we find that a very small proportion of the gold mined finds its way into the purses of individuals divi duals which thus corresponds to the natural economic idea of considering gold as a simple token of a nature form and concentration that are particularly convenient all exchanges of a certain importance being preferably regulated by means of instruments st of credit |