The Gold Queue

Britain's Foreign Secretary Ernest Bevin was having a friendly dinner with visiting American Legionnaires at London's Savoy Hotel last week. As he referred to "this awful economic crisis," Bevin had a sudden thought. Said he to the Legion's former National Commander Paul Griffith: "I know, Commander, that you will forgive me for suggesting the other day at Southport that you should take the gold out of Fort Knox. It does not seem to have been a very popular speech in America." While the diners laughed, Bevin continued: "Well, I do not mind whether it is Lend-Lease or that [gold], but all I say is this, that you can't get settlement in the world unless you get these economic conditions right."

Before the week was out, Britain decided to dip into her own gold reserves (amounting, with other reserve assets convertible into dollars, to $2.4 billion). She traded gold for $80,000,000. But Britain, needing her gold reserves to maintain confidence in the pound sterling, was not likely to make major inroads into them for current dollar needs.

The day after Bevin's casual reference to Lend-Lease, Chancellor of the Exchequer Hugh Dalton made a not-so-casual plea for crisis aid from the International Bank (whose staff calls its present quarters, one of London's deepest air-raid shelters, "the second Fort Knox"). Bank President John J. McCloy pointed out that the Bank was designed to make only commercially sound loans, attractive to private investors, and not to grant emergency aid not likely to be repaid.

But some financial experts, including John McCloy, are beginning to doubt whether U.S. dollar loans will ever solve Europe's troubles. They appreciate Europe's tragic poverty, but they are wondering whether continued handouts create, among other things, the proper attitude.

This file is automatically generated by a robot program, so reader's discretion is required.