16. Progress in Monetary Conceptions

Thirdly, starting December 15, Switzerland abro gates all measures of control in the commerce in gold. The importation and exportation of uncoined gold, that is, in any form other than in coins, are allowed. Only the importation and exportation of coined gold remain subject to control. Thus is gold restored to its normal status as metal. As I have mentioned elsewhere, this is the first step to take toward a logical organization of the gold system. One should begin by recognizing ,it as a metal, and restore to it, as a metal, all the liberties which other metals enjoy on the international market. Shall we say that the situation in Switzerland is exceptional, like that of Canada? During the war years and the postwar years, Switzerland enjoyed a continuous influx of gold. Her reserves are not only sufficient, hut overabundant. Far from desiring more gold reserves, Switzerland seeks to get rid of the 1M THE TRIUMPH OF ,GOLD money. In consequence, recognizing henceforth that the dollar has a decreasing value, the public looks for investments in real estate or stocks, as a protec tion against inflation in prices and the loss of the purchasing power of the dollar.

The conclusion which the Bulletin of the National City Bank draws from these considerations is par ticularly interesting. "It is gold," it says, "which for centuries has had the best record as a store of value. Paper money has been good as long as it was issued by banks legally obligated to maintain its converti bility into gold at the loaner's will. The worst recol lection is that left by the paper money issued directly by the national treasuries, but the paper money created by a bank of issue is just as bad if the bank is exempted from its obligation of converting it into gold." And the article concludes: "The simplest way for the government to restore confidence in money would be to revive the law of 1934 on the gold re serve, so as to reaffirm and strengthen the present bond of the dollar with gold, and to put an end to the dangerous notion that the principal function of the Federal Reserve banks is to provide the govern ment with a money both cheap and progressively depreciated."

The formula of the American writer remains a bit vague. It limits itself to asking for the return to the convertibility of the dollar into gold. He does not mention changing its price. But this position taken by one of the largest American banks against main. 186 THE TRIUMPH OF GOLD taining the system of paper money, this new in sistence on the continuous depreciation of the dollar, until now not mentioned, marks an advance in the opinion of competent men. No doubt that one swallow does not make a sum mer, but three or four swallows, at the beginning of 1952, already is not too bad. '187 17 The Failure of the International Monetary Fund (L'Opinion, June 5, 1952) In economic matters, the most important phe nomena are not always those that are talked about the most. On the contrary, those which escape public attention are often destined to play the essential role. Here is an example. It is known that the policy of the International Monetary Fund has consisted, for some years, in pro hibiting free markets in gold, in order to reserve to the central banks or to the government treasuries all the new gold produced by the mines. The aim is to concentrate the gold-the new as well as the old under the guardianship of the monetary officials of the different countries, and to make this sacred metal inaccessible to the public.