FISCAL: Cut in Gold

The Senate Banking Committee last week approved a bill to lower the minimum gold backing of Federal Reserve notes from 40% to 25%, the backing of Reserve deposits from 35% to 25%. Then the bill went to the Senate.

The committee had no choice. The U.S. gold hoard, which amounted to a historic $22,737,000,000 at the time of Pearl Harbor, is now down to $20,452,000,000. This might shrink even further if foreign balances in the U.S. of $5.3 billions are converted into gold. Reason for today's lowered total: the U.S. has been paying cash for more than half of its war...