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If the world is to escape the tyranny of gold, for which man enslaved man, even nations as powerful as the U.S. must prepare to give up some of their economic sovereignty. They will have to allow foreign technocrats a voice in their economic councils. Having sapped its international financial strength, the U.S. cannot hold the wobbly monetary structure together by itself. It needs Europe's help, and in return must accept some of the measures of discipline that Europe demands, unpalatable though that idea may seem. As an alternative, the U.S. could at worst retreat into economic isolationism and perhaps maintain a reasonable living standard. At best, the gold crisis could bring the dawn of a new era of international economic partnership.
-The 19th century system whereby each nation set the value of its currency by weight of gold, and guaranteed to convert paper money to bullion on demand. Honoring that commitment forced nations into ruthless de flations, panics, recessions. Under today's gold-exchange standard, which was evolved in the '20s to economize on the need for the metal, central banks hold some reserves in foreign currencies convertible to gold (such as the dollar). -Tinkering daily with the price of gold during the months before that, F.D.R. liked to decide on a figure in a huddle with Acting Treasury Secretary Henry Morgenthau, Financial Adviser George F. Warren and Reconstruction Finance Boss Jesse Jones as 1 breakfasted in bed at the White House. Wrote Morgenthau in his diary: "If anybody ever knew how we really set the price of gold through a combination of lucky numbers, etc., I think they would be frightened."