Salt Lake Telegram | 1931-09-23 | Page 12 | How Gold Standard Works in Business

I 1 HOW HOVY GOl GOLD STANDARD R 1 WORKS IN BUSNESS Standard Violated by England's England's England's Eng Eng- lands land's Refusal to Give Gold for Currency NEW NE YORK Sept Sept 23 UP UP The The I standard is the of gold backing a countr country's s currency by gold goldt a a. a sufficient SHi 0 dent quatt quantity of which is held in reserve re rc rc- rc I serve so the currency can cn be be kept at ata atI at I a a fLed fixed value If ir I a country countr declines delnes to permit to th the th I withdrawal of oC gold as In Ill the te present c case e of England its it cur currency currancy ncy loses I its It ts standard value abroad A country countr on a n gold standard fixes fies th the price of gold In relation to Its It currency and ad keeps the ratio rato In the thecae case cae of or Great Britain the pound S stor sti l l Ing ng was as worth wort 8 5 in gold god It I meant theoretically that If I one loo took tooka a a certain amount of sterling to t the Bank Dank of England he could buy a cerain cere ain tain Un amount of gold of a certain I fine fineness mess ness es fixed fLed by law lav Tha Th United States presents the I classic example of at a a gold standard Our gold dollar weighs grains and ad contains contins 2322 grains Sains of fine gold No single gold dollars are ae coined on account of the size but this is I the standard The currency law of l 1000 O makes make It the duty of the secretary of the he treasury to maintain mantin all al other othe forms of money at a a parity parit with wih gold The gold standard standard calls caUs for free coinage of gold If I a a pcr person on brings brines to o a United States mint worth lof of tine line gold he will wi be given 00 worth wort of gold old coins Under the British act t of 1925 1025 the I Bank Dank of England Egland stood sto ready reay to sell sPI gold to any Rny person who makes make demand demand de mand in i that behalf behal at the head office of at the bank bak during durin hours of ot the bank and pay the purchase price of 3 pounds 17 shilling 10 3 12 2 1 pence roughly 19 p per pr r Troy ounce of gold of the standard of fineness prescribed bcd for gold coin cin by hy the coinage coin coh age aRe act of 1870 but only in the form forta of bars containing approximately ly 40 TOY ounces of fine gold That Tat regulation m fixed the value value of gold old The pound sterling therefore had a definite defnie ratio rato to gold old If I the tho pound declined It would buy the sal sains amount of gold old In England as it t did b before fore Englishmen and others could take a depreciated pound to the Bank of at England buy gold ld at at the I fixed rate rat ship the gold abroad and receive currency of or other countries s rind and thus make profits In proportion to the amount which the th pound was wa down If It I nil all al transactions were made mae In n England Englad or Great Britain the pound sterling would remain fixed a at t a certain tam tai tain figure But all al transactions are Ire not not Payments must mut be made macic for foro I goods o rec received ived from all a of the world Therefore the pound must mut have a ratio to all al other currencies If I goods coos are being shipped in g l r amount than others are bein being Imported imported im Im- Im ported money will U come into int Great Britain That Tat money w will be In the form for of gold Britain will wi have have a favorable fa ta arabIa balance balace of trade As A gold god comes Into a country th count of Its it currency rises ries in proportion tion ton to the country shipping the gold for fo that country countr is i losing the metal and is i therefore in 11 a weakened poi tion ton When the trade trae balance swerves around the other way and more goods goos are taken token Into the country coun count try tr than are sent out the country in i question must shin gold to make up th the difference in the value of the exports exports ex ex- ex ports and the Imports When Ven gold leaves the country it has ha a tendency to ie t reduce the value of its it exchange 1 I and thus work against the gold bal bal- lance once ance