Money: Sanguine & Somber

After Britain devalued the pound last month, the gold-backed U.S. dollar faced a rush of gold-buying speculators who figured that the free world's key currency was next. Last week, well after the gold rush had subsided, President Johnson saw victory. "The speculative attack on the system," he said, "was decisively repelled." The price? "A relatively small cost in reserves."

These were reassuring words—and some reassurance was needed. The week of speculative fever following Britain's devaluation cost the U.S. $475 million in gold. That was the biggest single week's loss ever suffered by the nation's steadily dwindling gold reserves, which as...

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