How wise or necessary is the U.S. law that requires 25% of all Federal Reserve notes and deposits (85% of all currency in circulation) to be backed by gold? Last week one of the most prominent voices in the financial world declared that the 15-year-old reserve requirement, long considered the soul of economic orthodoxy, has outlived its usefulness. Said Henry Clay Alexander, chairman of the Morgan Guaranty Trust Co., addressing the annual meeting of the Investment Bankers Association in Hollywood Fla.: "Repeal of the 25% gold-backing provision would be a logical step...
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