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Show India Kept Poor by Hidden Gold Billions of Dollars' Worth Secretly Hoarded or Used for Ornaments. Washington Five billion dollars' worth of gold nod silver treasure Is sequestered in India in temple decora (Jons, Jeweled ornaments and hars of bullion, together with the bangles, anklets, necklaces and American eagles," with which millions of women wom-en array themselves, according to a new study of the legendary "wealth of the Indies" submitted to the United States Department of Commerce. "Frozen wealth," the government economists call this treasure, for It Is distributed and used In such forms that It yields not a penny of return to Its owners nor a dollar of credit to carry on the world's commerce. With a lofty Indifference to International Interna-tional money markets and the needs of trade, India sprinkles gold dust over the food served at extravagant banquets. Immense quantities of gold and silver are used to array brides for their marriage ceremonies, and In a multitude of other forms of decora Uon. Gold Is believed, moreover, to have an occult power of healing the sick "It Is a popular remedy In the native phnrmacopoeia," says the government study, "and medicines containing gold are favored for many diseases." The World's Gold Supply. All this has more than a picturesque Interest. It Involves the problem of altering the distribution of the world's gold supply a problem that took on new Importance when executives of the British. French and German Ceii tral banks and the American Federal Reserve system recently foregafhered in New York and Washington, and with the adjustment of Federal Reserve Re-serve rediscount rates below the F.u ropean level. As the world recovered from the financial chaos of the war most nn tions have struggled back to. or to ward, a gold standard for their currencies. cur-rencies. To establish and maintain such standards they must have gold reserves. The currents of International Interna-tional trade and other Influences have brought to America's coffers about half of the world's monetary stock of gold. But in the last quarter of a century India has been quietly nhsorb- ing Immense quantities of the yellow metal. With a store now estimated at about $2.f)K.()00.000. she draws to herself a large part of the new gold produced from year to year. Meanwhile, the world's gold production produc-tion has declined sharply from the maximum for this century, reached between 1(110 and 1015. Although there has been a recovery In part since 1022. this Increase has been vitiated, viti-ated, so far as monetary gold for the world Is concerned, by the increase of Indian absorption. Proposed Remedies. In nn attempt to halt or at least retard this accumulation, far-reaching changes are projected in the Indian financial system. Adoption of a gold bullion basis for India's currency; replacement re-placement of silver rupees In circula Hon by gold notes; establishment of n strong central hank; and extension of savings bank facilities are now proposed. pro-posed. All are designed largely to wcati the Indian population away from the habit of hoarding gold and silver pieces and bullion bars. If that is ever accomplished. India's five billions and more of gold and silver In time will cease to be merely so much "frozen wealth." What disturbs bankers and econo mists is not the size of India's store of gold, great as it Is. so much as the way it Is treated. The United States has more gold, our holdings hein2 ap proximately ?4.r,(l.ti(Ki.(HKI But this Is working In an elective way It serves as the foundation for the vast superstructure of credit employed al home and lately extended, with unprecedented un-precedented swiftness, to the rest of the world. Great Wealth Unused. India's gold Is idle. There is lacking lack-ing even a pretense of making it odd anything to the productive forces or the comfort of India's Sno.iHKUKHt peo pie or their fellow-beings in other lands. The exhaustive report submitted to Washington was prepared by I'on (". Bliss. Jr.. assistant trade commission er at r.umh.iv. under the prosaic title "The Bombay Bullion Market." Mr Bliss s:,ys on this point : "Vast reserves have been accumulated accumu-lated in the course of many tears reserves cm imnt.-M n miwmmins to $.-,.(iixi.(ii!ii.(iixi (Mr. Bliss here in chicles si s2.:,i::i.U'xi.ii:i t,,ruxiinj lion ol silver biddings) but lhe have bee:! jealously lio;irdeU in (Inform (In-form of unproductive precious metals "I'll! to productive uses, or loaned out 111 the world's money markets they would suffice to make India one of the powerful nations of the world. "The traditional 'wealth of the In dies' is there, but in such a form that It yields nothing to its possessors in the way of Improved standards of living liv-ing or the power to command the services serv-ices of others." Why Gold Is Hoarded. The wealth is scattered among millions mil-lions of unorganized holders, and even the silver coins winch constitute the metallic currency are snatched into private hoards by the ryots or peasant peas-ant farmers. Tills orobtem of hoarding. hoard-ing. Bliss' report shows, is at the root of the pathetic plight of millions of these farmers. Hereditary custom, social so-cial organization, seasonal harvests and the still primitive financial system sys-tem all influence them to assemble any wealth they have in a readily portable form and often to hide It. In old days of tyranny and oppression, oppres-sion, manifest prosperity was nn Invitation In-vitation to be stripped of one's possessions. pos-sessions. Hostile invasions also forced great southward migrations of people who, to save their wealth, had to collect col-lect it in a highly concentrated form. These conditions have left their influence influ-ence to this very day. Other Causes of Saving. The Hindu family, moreover, ordinarily ordi-narily holds all real property and household goods in common. The individual in-dividual wishing to save for his own use can segregate his savings only in the form of gold and silver. Millions of the native population, too. have an access to hanks. In time of stress they must draw on accumulated reserves or resort to the money lender at To per cent interest. "Consequently," Mr. Bliss writes, "there is a strong tendency in times of prosperity to purchase small quantities quan-tities of silver and gold in the form of coins, bullion or ornaments as a reserve re-serve against want. "Millions of people, particularly In south India and east India, never have a sufficient margin to do even this, as they have no savings whatever; what-ever; this is evidenced by the necessity neces-sity for famine relief measures In many sections as soon as there is a crop failure." |