Gold and the Gold Standard.pdf

GOLD AND THE GOLD. STANDARD
THE GOLD STANDARD OF THE TWENTIES
In a brief survey of the restored gold standard
of the twenties, the three most important facts to
be noted are (1) the war-weakened and distorted
economic milieu in which the restoreq gold standard
had to function, (2) the changed and, debilitated
character of the new gold standard itself, and (3) the
brief period of its operation. These three considerations
will be discussedin the paragraphs that follow.
The Changed Economic Milieu
The new gold standard was required to function in
a different environment, one that was much less
favorable than that of the prewar gold standard.
Among important changes for the worse may be
cited the following: (1) the destruction that had
been wrought by the greatest war in history-a
destruction of scores of billions of dollars of property
and of over 13 million lives, representing much of the
best blood of the world, the blood of men who, if
they had lived, would have been in the prime of
life during these years; (2) the great maladjustments
in the production of various basic commodities
after the war, growing out of the efforts of different
countries during the war to produce goods for
themselves which war conditions prevented· them
from importing as formerly, or to produce certain
classes of goods in greater volume for war needs.
These created dangerous and uneconomic vested
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