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Show - s' rrf"" vf'WW rJ?3 "V" I. J r--' " N t;-.? .TP -f-3 rj5. i'-wt f--4q n SIX BILLION Dollars in Gold Has DISAPPEARED; WHERE Has It Gone? The Yellow Metal a Vagabond, the Wandering Jew of Commerce America Has Most of It Now; Will She Be ABLE TO KEEP IT? J'fmf THE flare and glare of If l tlle Broadway cabarets W -fl- men toss S10 gold pieces jC E J to -waiters. They tip Jl j. i, taxi drivers and bell-fP bell-fP hops with coins of the QStvCy same glittering metal. Their wives spend $5,000 In an afternoon's shopping. Tables in fashionable amusement places are reserved re-served a week ahead. Broadway has never seen money spent so lavishly. 'Westerners and middle Westerners have flocked East to sleep In cots In bathrooms and hotel corridors and scatter money broadcast The country is gold mad. War prosperity has reached the apex of hysterical expenditure. ex-penditure. People are beginning to wonder. won-der. "Good times," say the unthinking. "War sales; industrial boom," says the man who thinks he knows. "The gold craze," say the astute political po-litical economists. "Europe Is being drained of gold. It Is piled In glittering stacks in the reserve vaults of American banks. For every dollar In gold the banks extend $3 or $8 in credit Values are Inflated. In-flated. Fortunes are made overnight. Gold pours in continuous streams to our shores. People borrow and invest, and go mad with the profits." $700,000,000 Extra in U. S. "Gold Is a mercenary tramp, a cynical globe-trotter," say economists. "It is here today and gone tomorrow. Today $700,000.-000 $700,000.-000 or $300,000,000 find the United States temporarily hospitable. Tomorrow Europe, again at peace, will lure It back. It follows the siren call of interest Its presence Is not an unalloyed blessing. Wa of the United States pay more for food and clothing, for all of the luxuries aud necessities neces-sities of life, because the world's golde l hoard is Increasing. Its favor is mercenary merce-nary and fickle. One-eighth of 1 per cent increase in foreign Interest rates will lure it from us. Since 1500, when the shadowy western El Dorados first started gold on its march to public favor, $12,000,000,000 or 513,0110,000.- v 000 of it have been produced. Probably $6,000,000,000 worth of the yellow metal had been mined prior to that time. Gold production since 1000 has been phenomenally phenome-nally rapid. The gold fields of Alaska, the states, South Africa, Russia and Australia have produced, since the beginning of the twentieth century, almost $6,000,000,000. Tet, at the present time, the world's available avail-able supply of gold is approximately $12,-000,000,000. $12,-000,000,000. Through the centuries the prized red metal has mysteriously trickled away. Six billions of It seem to have vanished. van-ished. Where have the vanished billions gone? Men have fabricated strange fancies of this ghost of vanished fortunes. Since the "tall ships" of old romance sailed out of the purple shadows of the famous' Spanish main with their decks "amuck with blood and gold," as Stevenson would have It, there have been those to say that gold trends back Into the obscurity from whence it comes. For centuries the tradition tra-dition has lived on that gold gotten with murder reverts back to its primitive freedom. free-dom. , "Where is the vast wealth of Tyre and Nineveh and Rome?" they query. "Where are the lost billions?" Science explains unemotionally. Professor Pro-fessor H. G. Moulton of the school of finance of the University of Chicago outlines out-lines three processes of attrition that despoil de-spoil us of dearly purchased wealth. "There is, of course," said Professor Moulton, "the ordinary wear and tear upon coin. Gold is soft, and despite the alloys calculated to make It harder It wears through constant circulation, until the inscriptions in-scriptions on the coin are obliterated. The losn In the aggregate Is rather considerable." consider-able." Industry and the arts claim a larger percentage of the gold that is permanently removed from the marts of commerce. "The very extensive employment of gold In jewelry and dentistry," said Professor Moulton, "constitutes an Item of greater significance than the wearing away of the coin. The use of paper as a practical medium of exchange has reduced the wear upon gold coin and bars, to a negligible minimum. But the demand for gold In jewelry, watchmaking, dentistry and the manufacture of delicate scientific Instruments Instru-ments Increases year by year. The other vicissitudes that tend to decimate the nomadic hosts of gold coins," he continued, "are hoarding, and frequent unavoidable losses In transportation accidents and kindred kin-dred forms of disaster." Favorite Theme for Writers. The glitter of red gold in the shadowy caves of the sea has always furnished a favorite theme for the writers of romance. The gold that goes down to the sea in ships y" L 'fo j j .AJ (JIIy In the flare of Broadway cabarets men toss $10 gold coins to waiters, their wives spend $5,000 in an afternoon's shopping the country is gold mad. iold - A . . -. - s .ri & M . - . - -" ' - ' - Hi kl-l n- ' - I 'Ij The Lusitania carried from $1,000,000 seems to Invite disa ter Hardly a coral 4 jW " f to $5,000,000 in gold and securities reef in the Caribbean but ha its tale of J f'J r ' when she was sunk in the Atlantic sunken galleon with their rent and stove t & '? & r - early in the war. For thousands in sides pouring forth gleaming trea ure V " Xr ' W ' 3 f v j f w u hj,L.( i. 'r'3v V- v ' ' t " of years since the days of Nineveh destlrred never to re ch port f ' j v fC ij4' . J J . "The gold that goes into the Orient I, ' , f ' "v ' i I ! and Tyre sinking ships have carried continued the di tlngui hed authority on If ( sA T " si " m " 1 4 H g0,d to the sea's floor, finance ' generally remain there The on ; ' ' f i v C' ' 1 - - T; fA drawing of the Lusitania sinking il ental mind ha not yet gta ped the e pedi ' 1 'U '"''-'l W . ' S"7 - i by V Illustration. VTSZNl-, : . , c v r s' - . 4 - ebbing of the gold flood. If the reaction ? " U f , . , y J Is too abrupt it will work great hardship f -S l - v'.-i no doubt S?' r V fct J2sX ' ic ' "u has been supposed that trie demand i ' ? n i '2 for supplies after the war will not be ap- ' V' Si ' V preciably less than the present demand. - I ,S SC 'M'11 t Vv'" - itf , and that this condition will result in our w c( tS" ' "V . , j, , k,. " retention of the extra millions. It is true .sSf?-V.o4 1 jT 1 v ' 's ? s h " that war-stricken Europe will continue au ' . . - " $ " s"'4-' ,, v , rl excellent customer after peace has ar- I T" " ' f 4-" ' t " v4c f 'jt wi" not purchase with gold. Her armies. ' ''"v;- , ' " ? v 1 v , It""- s 1 liberated from the trenches, will go back I Wh, N' k ' f . ,!T"' -V """V.- ( "1, 1 V 1 to the farms and factories. They will pro- i rfW '''v'4 ta ""X fb $V ' f S Etj duce again, and her products will com- I r.. x f w ' LjiL.-rrIl.,..- 'Tr ' " r.. .'-."ir.-r.'r- .rjrr.T.J mar-d American goods in exchange. Now. m - ! ' 6 Since the tall ships of old romance domestlc ,food s"PPIies '"equate for f 0 'is-fSJ iKiVst Wfi i?-' "v'--av,V AK,3? s -i i u i her own population, Europe must buy, and IJH " "ft - "V. f- sailed the Spanish Main amuck 6ne must pay, lu go)Q. But after the war " 'it "'V. I 1" I Wl1 '00 an Sld" pirate lore sne will match us In production and will ' v !' ' lyl as 'Jecn a favorite theme with outbid us n Interest rates. Gold will ifV 4Utl "V ' t V ' f writers. This painting by C. M. leave. Its departure is foreordained by f V' ' N Padday shows the hiding of "ill- ons, and must be regarded as in- P-.l'M. ' i - 'I - - K Pff avitable." KW'Vx M i - JS. ls gotten gains. Professor Davenport of Cornell estl- eSr& ' ' 4 ' U 1 Ph0t cMrl9ht C- M PaddaV and el- mates that the extension of national debt IST B0X4 ' f V 'K'r' RVal ACademV' by the European nations will impose an VU ' v 'N ? ,f!;", 5 enormously heavy burden upon the poor felV M"" 1 3 v-- , .x, , v, v., uu taxpayers. He has compiled statistics , T jx V rayed all of the world purcha ble wealth. lat' ' ' . , SvV-r J. t s - J i T v1 , , , i tending to show that In France the aver- ?S' w ' -r Egg woolen and hirdwood are more , Sf "; VtTi 1 xv xu x age peasant will have to expend fully one- k4 4 expen ne than they veie seenteen years b i t- j v . 'lf-3 ag So are all other commoditie Gold, half his annual income in the payment of t ' .x r " the Glorified a Povertv gre ,te t foe has It Is a cond,tlon unthinkable. New I , ' 7 V 5 wrought the change Fire or Ix billions taxes will have to be devised. Otherwise P' ' C 4X ' & -1 -T N 'X f aolln ,n gold have been added to the the frightfully onerous burden of taxation L'- Vff- ,;H TXiir , ! worlds wealth ince the beginning of the would culminate in revolution. The in- R V TAf sv " " 1 twentieth century There are now $17 In come and inheritance taxes will come Into r f ? V gold where weie formerly .12 And they their own. The single tax may be adopted. Kx Wr. , "V5W , ,d buv relatively le, ,n 1917 than they pur- Europe, weakened by the hardships of war JtV H A H" w)l i-s . - ' ch-ted.nlOOO Three quarter of a bll- must not only rebuild , Itself, but must fei , x"T" ' ' f 3- Hon In gold ha gravitited to the United shoulder the dragging burden In cost of1 9. ! ' - State since the w,r began With this dead men and horses, ruined cities sunke W&h? k V. wealth h. come higher price ships, burned ammunition and useless ar- "EI Dorado," the spirit of the Spanish conquerors of America who sailed and fought for love of adventure and the hoarded native stores of gold. Painting by E. J. Gregory, Royal Academy. ency of occidental methods of finance Value doesn't find expression in checks, drafts and bills of exchange in the vast territory "east of Suez." The natives of India, China and the Malay archipelago are hoarders of gold. Gold from all channels chan-nels of commerce is diverted Into the East' and because of the poor banking facilities is hoarded as the only tangible wealth available." The yellow fist of the Inscrutable oriental ori-ental closes about American gold coins and European pounds sterling to hide them away beneath bamboo floors, in hovels on the muddy banks of the Tang-tse and in the dim passes of the Himalaya Mountains. Moun-tains. This process has gone on for centuries. cen-turies. Asia buys largely from the western west-ern nations, but she pays In rice and silks and hemp and jewels. Gold remains. Vast Share in the Orient. If the natives of China ever become educated up to the point of buying government govern-ment securities, after the French consol system, the Mongols may become dictators In the world of finance. Whatever releases re-leases the Asiatic golden hoards Into the channels of commercial activity will see a speedy and startling readjustment of gold values. "How' can we keep the gold that has flowed from Europe to buy the output of our lusty "war babies," asks the man to whom "gold" and "industrial prosperity" are synonyms. "It can't be done," respond the economists. econo-mists. "Gold is the Wandering Jew of Industry," Indus-try," declares Professor Moulton. "It goes where it commands the- highest interest It owns no sentiment, no patriotism. ,io favorites. It is too volatile for legislative dikes and barriers. When our prese.-.t golden millions decide to leave, .they will leave. We can't stop them. Nor indeed Is there a single good reason why we should wish to. The mercantilist economists econo-mists of a few generations back thought thaf gold automatically Insured prosperity by its presence in a country. But their endeavors to bend legislation to the capturing cap-turing and retaining of gold proved a failure." More gold means relatively less purchasing pur-chasing power. Gold Is the standard medium of exchange. Against It Is ar- Since the tall ships of old romance sailed the Spanish Main "amuck with blood and gold" pirate lore has been a favorite theme with writers. This painting by C. M. Padday shows the hiding of "ill-gotten "ill-gotten gains." Photo copyright by C. If. Padday and exhibited ex-hibited in the Royal Academy, London. rayed all of the world s purchasable wealth. Eggs, woolens- and hardwoods are more expensive than they were seventeen years ago. So are all other commodities. Gold, the Glorified, as Povertv s greatest foe, has wrought the change. Five or six billions if dollars in gold have been added to the world s wealth since the beginning of the twentieth century. There are now $17 In gold where were formerly S12. And they buy relatively less m 1917 than they purchased pur-chased in 1900. Three-quarters of a billion bil-lion In gold has gravitated to the United States since the war began. With this wealth has come higher prices. Seeks Haven in War Times. Only to the man with gold at his command com-mand does the presence of gold signify greater prosperity. Labor finds it reflected re-flected in better pay and more consistent employment. But the purchaser of the means of subsistence, whether capitalist or laborer, finds that for him the golden flood has brought greater woes. As gold increases its purchasing power contracts. The canny Swedish financiers do not welcome the rush of gold, with which battling bat-tling Europe has purchased her weapons of death. Sweden fears an Inflated prosperity pros-perity that will make for mad Investment and finally precipitate financial disaster. Dikes to keep gold out of a country are far more potent than barriers erected to keep it in. Sweden Is succeeding. It does not want Its people mad with gold. Will America surrender its golden baubles with good grace? If it does the reaction from war-inflated prosperity will be mild. If It doesn't :f industry, fed on war-nurtured prosperity, sets up the wall that it cannot adjust itself to the old humdrum hum-drum routine then the parting with the tons of clinking metal will be a bitter one. "If we can relinquish the gold by degrees," says Professor Moulton, "there will be no severe shock to the nation. The Interstate commerce commission Is already taking steps to Insure against a too precipitate The Lusitania carried from $1,000,000 to $5,000,000 in gold and securities when she was sunk in the Atlantic early in the war. For thousands of years since the days of Nineveh and Tyre sinking ships have carried gold to the sea's floor. The drawing of the Lusitania sinking it ly V Illustration. ebbing of the gold flood. If the reaction Is too abrupt It will work great hardship no doubt "It has been supposed that he demand for supplies after the war will not be ap- preciably less than the present demand, and that this condition will result In ouTjr retention of the extra millions. It is true that war-stricken Europe will continue au excellent customer after peace has arrived. ar-rived. . She will still purchase. But she will not purchase with gold. Her armies, liberated from the trenches, will go back to the farms and factories. They will produce pro-duce again, and her products will command com-mand American goods in exchange. Now. with manufacturing at a standstill, with her domestic food supplies inadequate for her own population, Europe must buy, and she must pay, In gold. But after the war she will match us In production and will outbid us n Interest rates. Gold will leave. Its departure is foreordained by conditions, and must be regarded as Inevitable." In-evitable." Professor Davenport of Cornell estimates esti-mates that the extension of national debt by the European nations will Impose an enormously heavy burden upon the poor taxpayers. He has compiled statistics tending to show that In France the average aver-age peasant will have to expend fully one-half one-half his annual income in the payment of taxes. It Is a condition unthinkable. New taxes will have to be devised. Otherwise the frightfully onerous burden of taxation would culminate in revolution. The income in-come and inheritance taxes will come Into their own. The single tax may be adopted. Europe, weakened by the hardships of war, must not only rebuild Itself, but must shoulder the dragging burden In cost of dead men and horses, ruined cities sunkea ships, burned ammunition and useless ar- Uiiery. ll Will ue u Lasix tuiunani, a. nvin for the genius of such European Hamll-tons Hamll-tons as time and the crisis brought about by this war may develop. Must Maintain Credit. But a country's International credit must be maintained at all hazards. America Amer-ica will be paid. The hard wrung pennies of the Impoverished peasant will Insure against the American steel, kings and munition mu-nition workers having toiled in vain. Whatever What-ever we have sold on credit may be safely placed in the profit sidj'of the ledger. Europe's Eu-rope's credit must remain untarnished. The miserable luxuryf of war has always been paid for In full and usually It has been the poor who have paid it with Interest In-terest at the prevailing rate. While the war rages America gloats over gold. It spends its money freely. The nation Is exhilarated by the clink of the red metal and the crackle of yellow bills. It Is the gayest winter in .our history. Times are excellent anx though living is high, nearly every one has money. Every one seems to be spending it lavishly. We are In a period ot unsurpassed national prosperity. And Gold, the Glorified, the treader of the highways of Commerce, the Smiling Vagabond, nas made all these things come to pass! (Copyright. 1917, by J. Keeler. |