Can- United Year World Gold Production Valued in U. S. Money Source: The Federal Reserve Board; figures show thousands of dollars. Africa Esti. World (Cal.) Produc- South Rho- West Far East Col tion Africa desia Africa ada 458,102 238,931 12,000 469,257 227,673 13,335 6,623 160,968 States Mexico ombia Chile $1=25-8/10 grains of gold 9/10 fine; i. e., an ounce of fine gold 1929.. 382,532 215,242|11,607 4,297 139,862 45,835 13,463 2,823 683 1930.. 401,088 221,526 11,476 4,995 43,454 47,123 1931.. 426,424 224,863 11,193 5,524 55,687 1932.. 5.992 62,933 1933. 13,813 3,281 428 6,927 7,508 9,553 8,021 6,785 49.524 12,866 4,016 442 14,563 8,198 6,782 $1-15-5/21 grains of gold 9/10 fine: i. e., an ounce of fine gold-$35 52,842 13,169 6,165 3,009 16,873 8.968 6,919 United States totals include the Philippines. World totals exclude estimates for Soviet Russia, as follows, in millions of dollars-(1929) 15: (1930) 31; (1931) 34; (1932) 40; (1933) 56; (1933) 95; (1934) 135; (1935) 158; (1936) 187; (1937) 185; (1938) 180. The second 1933 figure for Russia and those since are based on $35 value per fine ounce. U. S. and World Silver Production, by Years Source: Director, United States Mint 49.422 253.695,856 115.175 55,647 274,573,873 124,077 144,943 1938.. 62,665,335| 40,511 267.765,434 116,577 151,210 1939.. 65.119,513 44,202 265,262,077 104,500 139.969 1940.. 69,585,734 49,483 96.302 Stock of Money in the United States Source: United States Treasury Circulation Statement Note. There is maintained in the Treasury-(1) equal to the face amount of such gold certificates. Reserve notes as a reserve for United States notes and Treasury Federal are obligations of the notes of 1890-$156,039,431 in gold bullion; (ii) as United States and a first lien on all the assets of the issuing Federal Reserve Bank. Federal Reserve security for Treasury notes of 1890-an equal dollar notes are secured by the deposit with Federal amount in standard silver dollars (these notes are Reserve agents of a like amount of gold certificates being canceled and retired on receipt); (ii) as or of gold certificates and such discounted or pursecurity for outstanding silver certificates-silver chased paper as is eligible under the terms of the in bullion and standard silver dollars of a monetary Federal Reserve Act, or, until June 30, 1943, of value equal to the face amount of such silver direct obligations of the United States if so authorcertificates; and (iv) as security for gold certifi-ized by a majority vote of the Board of Governors cates-gold bullion of a value at the legal standard of the Federal Reserve System. 156,039,431 9.901,261,037 6.447,056,447 49.88 156,039.431 9.964,467,385 6.460,891,315 49.62 156,039,431 10.483,210,020 7,046,742,702 53.72 156,039,431 11,333,196,181 7,847,501,324 59.48 |12,993,288,844/9,612,375,3321 72.39 U. S. Gold and Silver Exports and Imports, by Years Source: U. S. Department of Commerce; figures in thousands of dollars. 1928. 560,759 168,897 87.382 68,117 1940, 5,889 1.979, 457 508 3,574,659 4,995 7,082 230,531 14,630 85,307 3.674 58.434 1929. 116.583 291,649 4,749,467 83,407 63,940 1873-1940. 6,775,189 29,546,824 3,514,194 3,256,672 Silver export figures, 1936 and 1937 do not include pesos coined for the Cuban Government. Net United States imports of gold-(1934), $1.131,994,000; (1935) $1,739,019,000; (1936) $1,116,584,000; (1937) $1,585,503,000; (1938) $1,973,569,000; (1939) $3,574,151,000; (1940) $4,744,472,000. The world's industrial consumption of gold and silver, in 1938, was-gold, $58,039.320; silver, 53,013,498 fine ounces. Gold Reserves of Central Banks and Governments Source: The Federal Reserve Board; figures show millions of dollars; at par of exchange. Others not in the above table (millions of dollars)-Brazil (51); Chile (30); Colombia (17); Czechoslovakia (58); Denmark (52); Egypt (52); Greece (28); Hungary (24); Java (140); Mexico (47): Netherlands (617); New Zealand (23); Peru (20); Portugal (59); Roumania (158); South Africa (367); Sweden (160); Turkey (88); Yugoslavia (82); Uruguay (90); Venezuela (51). Gold reserves, Dec., 1940, not included above-United States, $48,000,000; Belgium, $17,000,000. U. S. Gold Exports and Imports, by Countries The total for 1934 includes January figures at $20.67 a fine ounce. "All other countries" include-(1938) $31,830,000 from Argentina. (1939) $28.097,000 from China and Hong Kong, $15.719,000 from Italy, $10,953,000 from Norway, $10,077,000 from Chile, and $37,555.000 from other countries. (1940) $75,087,000 from Portugal, $59.072,000 from Argentina, $43.935.000 from Italy, $33,405,000 from Norway. $30,851,000 from U. S. S. R., $26,178,000 from Hong Kong, $20,583,000 from Netherlands Indies, $16,310,000 from Yugoslavia. $11.873,000 from Hungary, $10.802,000 from Chile, $10.775,000 from Brazil, $10,416,000 from Spain, $10,247,000 from Peru, and $28,935,000 from other countries. History of U. S. Monetary Standards, 1785-1933 Source: Office of the Secretary of the Treasury Under the Articles of Confederation, the Congress in 1785 adopted the dollar as the monetary unit of the United States, and in 1786 fixed its value at 375.64 grains of pure silver. This unit was derived from the Spanish piaster, or milled dollar, which had constituted a large part of the metallic circulation of the English colonies in America. Congress, by the Act of April 2, 1792, established the first monetary system of the United States under the Constitution. That Act provided "that the money of account of the United States shall be expressed in dollars or units, dismes or tenths, cents or hundredths, and milles or thousandths,' and established two units of value: the gold dollar containing 24.75 grains of pure gold (27 grains of standard gold 0.916 -2/3 fine), and the silver dollar containing 371.25 grains of pure silver (416 grains of standard silver 0.8924 fine), the proportionate mint ratio of the two metals being 1 to 15. A mint was established at Philadelphia, and provision made for the coinage of both gold and silver coins. The coinage was unlimited and there was no mint charge. Both gold and silver coins were legal tender. The Act of 1792 undervalued gold, which was therefore exported. To remedy this the Act of June 28, 1834, reduced the content of the gold dollar from 24.75 to 23.20 grains of pure gold, and reduced the standard weight from 27 to 25.8 grains, thus reducing the fineness to 0.899225, and, since the fine content of the silver dollar was unchanged, making the mint ratio between gold and silver 1 to 16.002. By the Act of January 18, 1837, the fineness of both gold and silver coins was fixed at 0.900, and the weight of the gold dollar was fixed at 25.8 grains of standard or 23.22 grains of pure gold, and, since the fine content of the silver dollar was unchanged, a new mint ratio of 1 to 15.988 for gold and silver was thereby established. The acts of both 1834 and 1837 undervalued silver in terms of gold, and silver was attracted to Europe by the more favorable ratio there obtaining. By the Act of February 21, 1853, the fine silver content of silver coins for fractional parts of a dollar was reduced approximately 7 percent (previously their silver content had been exactly proportional to that of the silver dollar), and they were made legal tender to the amount of $5 only (previously they had been full legal tender). This Act also discontinued free coinage of fractional silver coins, and provided that thereafter they should be coined only for the account of the Treasury, any profit accruing to the United States through their coinage to be covered into the Treasury as seigniorage. The Treasury was to redeem these "subsidiary" coins at their face value in standard money, upon demand. The Act of February 12, 1873, codified the coinage laws then in effect and made a number of changes in the monetary structure. This Act declared that a gold "one-dollar piece" (of unchanged fineness and content, 25.8 grains of standard gold 0.900 fine, or 23.22 grains of pure gold) should be "the unit of value"; coinage of gold was to be unlimited, and The Gold Source: The January 1941 There seems to be a confusion of thought, not only among laymen but bankers, as to the question, "Is the United States on a gold standard?" One group maintains we are on a "restricted gold standard" or "modified gold standard," while others state we are "off the gold standard." Which is correct or is there another answer to the question? Whether our monetary system rests on a gold standard depends on the way that standard is defined. Formerly the gold standard might have been defined as a monetary system under which the authorities were required to buy gold from any one and to sell it to any one, in any amount, at a fixed price, and to allow gold to move into or out of the country without restriction. In the sense of this definition, we are not now on a gold standard. Private individuals may not, as a rule, buy or own gold coin, gold bullion, or gold certificates, and all gold transactions are subject to Treasury regulation. This has been true since the spring of 1933. The Treasury, however, has purchased at a fixed price of $35 an ounce all the gold offered, and on the few occasions when the sale of gold to settle international balances was requested, gold was released by the Treasury also at a fixed gold coins were full legal tender. Silver coins for fractional parts of a dollar, except for the halfdime which was abolished, were continued, as provided in the Act of 1853, with only a slight change in their silver content (and without change in their limited legal tender qualities). Former provision for silver dollars (of 371.25 grains of pure silver) was omitted, (a trade dollar containing 378 grains of pure silver, intended for export to the Örient in exchange for goods, was authorized; its free coinage was discontinued in 1878). The Act of February 28, 1878, (Bland-Allison Act) again provided for the coinage of the silver dollar of the weight (412.5 grains) and standard (900 fine) as provided by the Act of January 18, 1837, and provided that all such silver dollars together with those previously coined should be legal tender at their nominal value for all debts and dues, public and private, except where otherwise expressly stipulated in the contract. The Act of July 14, 1890, (Sherman Act) which provided for the purchase of silver (see page 11) and the issuance of Treasury notes of the United States (see pages 25-26) in payment therefor stated "that upon demand of the holder of any of the Treasury notes herein provided for the Secretary of the Treasury shall, under such regulations as he may prescribe, redeem such notes in gold or silver coin, at his discretion, it being the established policy of the United States to maintain the two metals on a parity with each other upon the present legal ratio, or such ratio as may be provided by law." The Act of November 1, 1893, repealed the purchasing clause of the Act of July 14, 1890, and declared it to be "the policy of the United States to continue the use of both gold and silver as standard money, and to coin both gold and silver into money of equal intrinsic and exchangeable value, such equality to be secured through international agreement, or by such safeguards of legislation as will insure the maintenance of the parity in value of the coins of the two metals, and the equal power of every dollar at all times in the markets and in the payment of debts." The Act of March 14, 1900, reaffirmed the Act of 1873 by providing that, "the dollar consisting of 25.8 grains of gold nine-tenths fine, shall be the standard unit of value, and all forms of money issued or coined by the United States shall be maintained at a parity of value with this standard, and it shall be the duty of the Secretary of the Treasury to maintain such parity." This Act also provided that nothing contained in the Act "shall be construed to affect the legal-tender quality as now provided by law of the silver dollar, or of any other money coined or issued by the United States." In 1913, Congress provided in the Federal Reserve Act that nothing in this Act contained shall be construed to repeal the parity provision or provisions contained in an Act approved March 14, 1900 *** and the Secretary of the Treasury may for the purpose of maintaining such parity and to strengthen the gold reserve, borrow gold on, the security of United States bonds ***.** Standard Federal Reserve Bulletin price. Moreover, gold movements have continued to affect the volume of bank reserves and bank deposits in the United States in the same way as before 1933. In fact, we have operated for the past seven years in a manner that does not differ in its economic effects from those of the old gold standard. Perhaps the most important difference between our present arrangement and the gold standard as we used to know it is the fact that the price of gold and the Treasury's willingness to buy or sell it are rot guaranteed by law, but are discretionary. Ordinarily this is more a theoretical than a practical difference; but at least on two occasions since 1934 rumors that the price of gold would be changed gained currency here and abroad and had considerable effects on international gold movements. It should be added that in any event a single country obviously can not be on an "international" gold standard. The United States, however, has kept the dollar stable in terms of gold, as it would have been under the gold standard; but, with other countries off gold, their currencies have not been held in a fixed relationship to the dollar, as they would have been had an international gold standard been in effect. Foreign Monetary Units Valued in U. S. Money Source: Official Bulletin, the Treasury Department Pursuant to the Tariff Act of 1930, the following estimates by the Director of the Mint of the values of foreign monetary units are hereby proclaimed to be the values of such units in the money of account of the U. S. in estimating the value of all foreign merchandise during the quarter beginning July 1. 1941. If no such value has been proclaimed, or if proclaimed varies by 5% or more from the buying rate in the New York market at noon on the day of exportation, conversion shall be made at such buying rate. Argentine Republic, peso ($1.6335). Given value milligrams of fine gold per lira established by is of gold peso. Paper nominally convertible at monetary law of Oct. 5, 1936. 44% of face value. Convers. suspend. Dec. 16, 1929. Australia, pound ($8.2397). Control of gold stocks and exports authorized Dec. 17, 1929. The Belgium, belga ($0.1695). By decree of Mar. 31, 1936. One belga equals 5 Belgian francs. Anglo-Belgian financial agreement of June 7, 1940, fixed the rate of exchange of the Belgian franc and the franc of the Belgian Congo at 176.625 francs for £1 sterling. Bolivia, boliviano ($0.6180). Conversion of notes into gold suspended Sept. 23, 1931. Brazil, milreis ($0.0606). Based upon official rate for milreis in terms of the dollar as announced by the Bank of Brazil. Conversion of Stabilization Office notes into gold suspended Nov. 22, 1930. British Honduras, dollar ($1.6931)). Conversion of notes suspended. Bulgaria, lev ($0.0122). Exchange control established Oct. 15, 1931. Canada, dollar ($1.6931). Embargo on export of gold, Oct. 19, 1931; redemption of Dominion notes in gold suspended April 10, 1933. Chile, peso ($0.2060). Given valuation is of gold peso. Gold pesos are received for conversion at the rate of 4 paper pesos for one gold peso. Conversion of notes suspended July 30, 1931. China, yuan. Silver standard abandoned by decree of Nov. 3, 1935; bank notes made legal tender under Currency Board control; exchange rate for British currency primarily fixed at about 1 s. 211⁄2 d.. or about 2912c U. S., per yuan. Hong Kong, dollar. Treasury notes and notes of the three banks of issue made legal tender by silver nationalization ordinance of Dec. 5, 1935; exchange fund created to control exchange rate. Colombia, peso ($0.5714). Obligation to sell gold New gold content of suspended Sept. 24, 1931. 56424 grams of gold 9/10 fine established by monetary law of Nov. 19, 1938, effective Nov. 30, 1938. Costa Rica, colon ($0.7879). Conversion of notes into gold suspended Sept. 18, 1914; exchange control established Jan. 16, 1932. Cuba, peso ($1.0000). By law of May 25, 1934. Denmark, krone ($0.4537). Conversion of notes into gold suspended Sept. 29, 1931. U. S. Dominican Republic, dollar ($1.6931). money is the principal circulating medium. Ecuador, sucre ($0.3386). Conversion of notes into gold suspended Feb. 9, 1932. Conver Egypt, pound (100 piasters) ($8.3692). sion of notes into gold suspended Sept. 21, 1931. Estonia, kroon ($0.4537). Conversion of notes into gold suspended June 28, 1933. Finland, markka ($0.0426). Conversion of notes into gold suspended Oct. 12, 1931. France, franc. Provisions of monetary law of Oct. 1, 1936, providing for gold content of franc, superseded by decree of June 30, 1937, which stated that the gold content of the franc shall be fixed ultimately by a decree adopted by the Council of Ministers. Until issuance of such decree a stabilization fund shall regulate the relationship between the franc and foreign currencies. Germany, reichsmark ($0.4033). trol established July 13, 1931. Exchange con Great Britain, pound sterling ($8.2397). Obligation to sell gold at legal monetary par suspended Sept. 21, 1931. Greece, drachma ($0.0220). Conversion of notes into gold suspended Apr. 26, 1932. Guatemala, quetzal ($1.6931). Conversion of notes into gold suspended Mar. 6, 1933. Haiti, gourde ($0.2000). National bank notes redeemable on demand in U. S. dollars. Honduras, lempira ($0.8466). Gold exports prohibited Mar. 27, 1931; lempira circulates as equivalent of half of U. S. dollar. Hungary, pengo ($0.2961). Exchange control established July 17, 1931. India (British), rupee ($0.6180). Obligation to sell gold at legal monetary par suspended Sept. 21, 1931. Indo-China, plaster. Plaster pegged to French franc at the rate of 1 plaster = 10 French francs; conversion of notes into gold suspended Oct. 2, 1936. Ireland, pound ($8.2397). Conversion of notes into gold suspended Sept. 21, 1931. Italy, lira ($0.0526). New gold content of 46.77 Japan, yen ($0.8440). Embargo on gold exports Dec. 13, 1931. Latvia, lat. Currency pegged to sterling Sept. 28, 1936, at 2,522 lat = £100; on Sept. 13, 1939, a law was passed providing that if the pound sterling should depreciate by more than 5 per cent with respect to the United States dollar, or the Swedish krona, the Bank of Latvia shall take steps to keep the rate of exchange of the lat stable by basing it on gold or some other monetary unit. Liberia, dollar ($1.6931). British money is principal circulating medium. Lithuania, litas ($0.1693). Free export of gold suspended Oct. 1, 1935. Mexico, peso. Decree of Aug. 28, 1936, left the monetary unit, the peso, to be later defined by law. Netherlands and colonies, guilder (florin). ($0.6806). Suspension of convertibility of notes into gold and restrictions placed on free gold exports-Sept. 26, 1936; gold export prohibition repealed by decree June 28, 1938; prohibition restored by Act. of Nov. 25, 1938. The Anglo-Netherlands financial agreement of June 14, 1940, established the official rate of exchange between the Netherlands Indies guilder and the pound sterling at 7.60 guilders for £1 sterling. By act of Sept. 20, 1940, the Netherlands Indies Volksraad decided, subject to later ratification by law, that the Java Bank shall fix the value of its stocks of gold coin and bullion at Fl. 2,121 per kilogram fine. Newfoundland, dollar ($1.6931). and Canadian notes legal tender. Newfoundland New Zealand (pound ($8.2397). Conversion of notes into gold suspended and export of gold restricted, Aug. 5, 1914; exch. regula. Dec., 1931. Nicaragua, cordoba ($1.6933). Embargo on gold exports Nov. 13, 1931. Norway, krone ($0.4537). Conversion of notes into gold suspended Sept. 29, 1931. Panama, balboa ($1.0000). U. S. money is principal circulating medium. Para Paraguay, peso (Argentine) ($1.6335). guayan paper currency is used; exchange control established June 28, 1932. Persia (Iran), rial ($0.0824). Obligation to pay out gold deferred Mar. 13, 1932; exchange control established Mar. 1, 1936. Peru, sol ($0.4740). Conversion of notes into gold suspended May 18, 1932. Philippine Islands, peso ($0.5000). By act approved Mar. 16, 1935. Poland, zloty ($0.1899). Exchange control established Apr. 27, 1936. Portugal, escudo ($0.0749). Gold exchange standard suspended Dec. 31, 1931. Rumania, leu ($0.0101). Exchange control established May 18, 1932. Salvador, colon ($0.8466). Conversion of notes into gold suspended Oct. 7, 1931. Spain, peseta. British Straits Settlements, dollar ($0.9613). pound sterling and Straits dollar and half dollar legal tender. Sweden, krona ($0.4537). Conversion of notes into gold suspended Sept. 29, 1931. Switzerland, franc. Order of Federal Council enacted Sept. 27, 1936, instructed the Swiss National Bank to maintain the gold parity of the franc at a value ranging between 190 and 215 milligrams of fine gold. Thailand (Siam), baht (tical) ($0.7491). Conversion of notes into gold suspended May 11, 1932. Turkey, piaster ($0.0744). 100 piasters equal to the Turkish £; conversion of notes into gold suspended 1916; exchange control established Feb. 26, 1930. Union of South Africa, pound ($8.2397). Conversion of notes into gold suspended Dec. 28, 1932. Union of Soviet Republics, chervonetz ($8.7123). Uruguay, peso ($0.6583). Conversion of notes into gold suspended Aug. 2, 1914; exchange control established Sept. 7. 1931. New gold content of .585018 grams of pure gold per peso established by monetary law of Jan. 12, 1938. Venezuela, bolivar ($0.3267). Exchange control established Dec. 12, 1936. Yugoslavia, dinar ($0.0298). established Oct. 7, 1931. Exchange control |