The Triumph of Gold

264 Pages·1961·10.348 MB·English

by  Charles Rist

THE TRIUMPH OF GOLD

THE
TRIUMPH OF
GOLD
(i) (i)
BY CHARLES RIST
Translated from the French
With an In~roduction
BY PHILIP CORTNEY
WISDOM LIBRARY
a divisionof
PHILOSOPHICAL LIBRARY
NewYork 16,N. Y.
©Copyright,1961,byPhilosophicalLibrary,Inc.,
15East40Street, NewYork 16,N.Y.
AUrightsreserved
Library of Congress Catalog Card No. 61-12991
Printedin theUnitedStatesofAmerica
Contents
Introduction by Philip Cortney 1
Preface 47
1. Freedom for the Gold Market 57
2. The Two Monetary Markets 61
3. The New Franc 65
4. The Blocking of 5000 Francs Notes 68
5. Gold and Paper 73
6. How to J3ring Gold Back to Europe 77
7. Change in Orientation 82
8. Gold,jlnternational Currency 90
9. The :Qistributionof Gold in the World 102
10. Gold #nd aReturn to the Ideas ofJohn Law 107
11. The Brice of Gold in the United States 135
12. Old If1-eas on Money which Have Become New 144
13. Abou~ Gold for Europe 171
14. PricesiQuoted in Gold 175
15. The lfaradoxes of the European "Payments
Union" 179
16~ Progress in Monetary Conceptions 183
17. TheFailureoftheInternationalMonetary Fund 188
18. Borrowing and Saving 194
19. An American Opinion on the Gold Clause Of
the Pinay Loan 200
20. Has the Free Price of Gold Rejoined its Official
Price? 203
2l. How to Evaluate the New Price of Gold 208
22. Drop in World Prices 215
23. Forecasts on the Convertibility of Currencies 220
Appendix: Remarks of Allan Sproul 227
Index 257

"Theone truereserve, gold." •
Introduction
Charles Rist passed away in 1955. He was one of
the great monetary economists of our time and en
joyed an international reputation. I had the good
fortune to be one of his friends. Whatever worth
while knowledge ofmonetary issues I acquired, which
resisted the acid test of constant reflection and ex
perience, lowe to him. While he had deep rooted
convictions, Rist was no doctrinaire: his mind re
mained open, receptive and lucid until the last mo
ments of his life. "L'histoire des doctrines relatives
ala m'Onnaie et au credit" by Charles Rist is one of
the great books' on money. Unfortunately, the Eng
lish translation does not do it justice. Whenever I
become disturbed by the assault of fallacies expressed
by clever sophisticated writers, I reread Charles Rist,
whose intelligence, good sense and clarity give his
ideas the power of evidence.
• • •
Those who are pressed for time could limit their
• In an article: "Monetary Magicians," New York
T,imes,AprilS, 1961.
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THE TRIUMPH OF GOLD
first reading to the Preface by Charles Rist and to
the articles: 1) Gold and a Return to the Ideas of
John Law (p. 107) . 2) The Price of Gold in the the
United States (p. 135), and 3) How to Evaluate the
NewPriceofGold (p. 208) .
FROM JOHN LAW TO ALLAN SPROUL
It occurred to me that an English translation of
Rist's last book "La defense de I'or" could serve a
good purpose at a time when our statesmen need
clear thinking andsound guidance in order to restore
monetary sanity. I chose for the English edition the
title "The Triumph of Gold" because it was Rist's
conviction, as it is mine, that only a return to the
gold standard· is able to preserve our free society
and human freedom. We shall have· sound money
or we shall cease to be free. Only the discipline of
the goldstandard will insure us sound currencies and
a workable international monetary system, both es
sential to the preservation of the free world.
In an appendix to this book the reader will find
a famous speech by Allan Sproul, delivered in 1949
before the American Bankers Association. He was
then President of the Federal Reserve Bank of New
York. The ideas and policies regarding gold, enun
ciated in this speech, have become the "constitution"
of the paper money managers. Rist's book answers
most of the ideas defended by Mr. Allan Sproul.
This is not surprising, because. the views held and
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THE TRIUMPH OF GOLD
advocated by Mr. Sproul are as old as they are dis
credited by actual experiments in the past.
In his speech, Mr. Allan Sproul stated: HI perceive
no moral problem involved in this question of gold
convertibility. Money is a convenience devised by
man to facilitate his economic life. It is a standard
of value and a medium of exchange." It is symp
tomatic of his thinking that the "store of value" at
tribute of sound money, universally recognized by
all important writers on money, is not even men
tioned. Does Mr. Sproul think that the depreciation
of the dollar by more than 50% since 1940 does not
matter and is not a moral issue?
Discussing the depreciation of the dollar since
1939, the National City Bank in its "Monthly Letter"
dated December 1951 made the following pertinent
comments, as, true today as they were then:
"Gold has had the best record over centuries as
a store of value (a vital function of money which
many economists nowadays forget). Paper money
has been goodwhen issued by bankswhich have been
under a legal obligation to maintain convertibility
intogold at the option of the dollar.... Paper money
directly issued by National Treasuries has the worst
record, though money.can be just as bad if it is put
outby a bankofissuewhich isfree from the necessity
of maintaining gold convertibility and bonds to the
wishes ofa profligategovernment for cheap financing.
Most of the .worthless currencies issued in foreign
countries during and after the war bore the stamp of
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THE TRIUMPH OF GOLD
a corrupted central bank of issue."
Is the preservation of a free society not a moral
issue? The issue between individualism and collec
tivism, between internationalism and economic na
tionalism is settled when a country has decided what
kind of monetary system it is going to have. If the
government is free to print and manipulate money
at will and arbitrarily, then we cease to have a free
society.
Ina speechdelivered also in 1949 by Mr. Randolph
Burgess, then Vice-Chairman of the National City
Bank of New York, one can read:
"Of course the modern economic planners don't
like the gold standard just because it does put a limit
on their powers . . . I have great confidence that the
world will return to the gold standard in some form
because the people in so many countries have learned
that they need protection from the excesses of their
political leaders."
Henry Hazlitt in his recent book "Inflation" writes
as follows: "The gold standard is not important as
an isolated gadget but only as an integral part of a
whole economic system. Just as 'managed' paper
money goes with a statist and collectivist philosophy,
with government 'planning', with a coercive economy
in which the citizen is always at the mercy of bureau
cratic caprice, so the gold standard is an integral part
of a free enterprise economy under which govern
ment respects private property, economizes in spend
ing,balancesitsbudget,keepsitspromises, andrefus·es
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