Who Has The Gold?

Gold has been the symbol of wealth in all the civilizations that have arisen in the past 10,000 years. The Assyrians, the Egyptian dynasties, the ancient empires of India and China, Greece and Rome, the Incas and Aztecs and all the other peoples that have made a brave show on the pages of history have worshipped at the feet of the Gold. In modern times the hope-less depreciation of paper currencies has turned men back to gold for security wherever governmental action has not made the holding of gold a crime. Throughout history men have toiled and fought for this beautiful and enduring metal. In all times and all places, gold has bought the things men most desire, from freedom from want to the might of kings.

In spite of the tremendous influence of gold on mankind, for good and for bad, all the gold that men have won from the earth in 10,000 years could be put in a room 48 x 40 x 20 ft. Less than a seventh of this gold has been destroyed or lost. The permanence and beauty which have given gold such a hold on the imaginations of men should make it relatively easy to determine how much gold there is in the world, and who owns it. The gold can be put in vaults, and once there it stays. Nevertheless, gold statistics are hardly more than guesses. Estimates of production and of public and private holdings vary by many hundred millions, or even billions of dollars. Gold data should properly be expressed as estimates rather than statements of fact.

The figures for world production and distribution of gold are rough approximations. While they are derived from reports of the American Bureau of Metal Statistics, the United States Bureau of Mines, the Federal Reserve Bulletin and other standard sources, these authorities often disagree with each other and even with themselves. Data is recorded to the nearest hundred thousand ounces of gold, or the nearest hundred million dollars. Even these approximate figures give a false impression of accuracy. There may be far more serious errors. However, such errors will not invalidate the general answers to the question “Who Has the Gold?”

Gold Production

Production is the least uncertain of the chapters in the story of gold. About 35% of the world’s output in normal times, exclusive of the USSR production, comes from South Africa, 15% from the United States and 13% from Canada. The rest is divided among many countries and all the continents, with no outstanding great producers. The data on production outside of Russia might be expected to be moderately accurate. This is true only if a liberal definition of accuracy is accepted. The published estimates by American authorities of production in the past and an estimate made by the Foreign Exchange Control Board of Canada, which has not been published, differ by several hundred million dollars. This is a mere trifle in the sort of accounting that satisfies our fiscal authorities with respect to the theoretical base of our monetary system.

Private Treasures

Gold Eagerly Sought

From 1941 to 1947 inclusive private holdings increased by 114 million ounces. This was more than half of the total world production. Evidently lack of faith in printed currency or in government promises to pay caused a wholesale investment in gold during and after the war, wherever laws made this possible. This trend still continues, as shown by recent sales of millions of ounces of gold to dealers in Macao and elsewhere in the Orient. Combining the four periods in the 20 years from 1928 to 1947, private holdings of gold have increased by about 83.6 million ounces, or 15% of world production. The rest of the gold output went into reserves of governments or central banks.

Industry’s Share Unknown

An attempt to divide the privately held gold into bullion or coin and gold that has gone into industrial use or jewelry seems almost hopeless. A great part of the gold used in industry comes from melted down coins, or from gold recovered from earlier industrial use. For instance dentists recover about as much gold from old fillings as they use in new ones, though the patients are not credited with the recovered gold. Even gold that accompanies the dead on their last journey is seldom lost. The treasures buried with Egyptian Kings were usually stolen later by despoilers of the tombs, and it is said that the gold fillings or jewels of the modern dead seldom get to the grave or the funeral urn. These unrecorded transactions help to obscure the estimates of new gold used by industry.

The Balance Sheet

From all these dubious statistics it is possible to construct a balance sheet for gold that is probably the most inaccurate balance sheet ever attempted. All figures are at $35 per ounce, which adds one more inaccuracy to the accounting. Changing the dollars to percentages, nations and central banks now hold 61% of all the gold that men have seen. Individuals or corporations own 25%, and only 14% has disappeared in 10,000 years.

No other human possession in all time has been so zealously and effectively guarded.

Who has the gold? America has most of it, through the share in the great Government reserves or in gold ornaments. Outside the United States those who can afford to own gold hold it as a favorite method of insurance against future want. Throughout the ages, man’s faith in gold has never wavered, and gold has never failed him. Men cannot eat gold, but those who have had gold have never gone hungry.

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