First ColumnAuthor(s): NTUSource: Africa Today, Vol. 11, No. 4 (Apr., 1964), p. 2Published by: Indiana University PressStable URL: http://www.jstor.org/stable/4184505 .

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first column...

"A SOUND CURRENCY DEPENDS ON GOLD," reads the postage meter slogan printed on envelopes of the Anglo American Corporation, largest of the giant mining houses looming over Southern Africa.

We've developed, over the years, a certain resistance to corporative braggadocio; but a company producing gold is, after all, not quite in the same class as one manufacturing soap or striped toothpaste.) So we were inclined to accept the claim at face value. When dealing with proposals for economic sanctions against South Africa, we've generally said nothing or specifically exempted gold from boycott plans.

We could not have been more wrong. South African gold is "boy- cottable" and such an event might very well set off overdue monetary reforms, we learned recently. Our authority is Mr. Roger Opie, editor of Banker's Magazine and formerly an advisor to the British treasury.

"The idea that a currency is respectable at home only if it can be converted into gold at any time has now been abandoned, and rightly so." He points out, however, that the notion continues to linger in the US, where one quarter of all notes issued must still be backed by gold.

When it comes to exchanging national currencies for each other, gold remains an important backer of currencies. International bankers (top hat, big cigar?) are more comfortable with gold in their vaults than with sterling or greenbacks. Mr. Opie argues that the bankers are unnec- essarily nervous; they don't really need all that gold.

Let's see what might happen if no new South African gold were to be available for a couple of years. In the first place, only about half of new gold is actually used for official currency reserves. The balance goes to private speculators, brides, grooms, and people with sore teeth. Mr. Opie reasons that these private buyers would promptly swallow up all new non-South African gold, but that because the boycott might bring nearer the day when gold is demonetized internationally, the price per ounce might fall radically. And that, he chortles, would virtually destroy the South African economy. He further notes that the loss of South African gold might "precipitate the long-awaited day when the US feels ready, willing and able to remove the requirement that the domestic note issue be backed by a 25 percent hold of gold in Fort Knox. This would release the whole of US gold reserves for use as genuine international reserves." One of the beneficial by-products of this would be that nervous bankers might be a lot happier to "hold their dollar surpluses in dollars rather than converting them into gold."

Mr. Opie (youngish, pipe-smoking) presented his paper before the Economic Commission of the International Conference on Economic Sanc- tions Against South Africa, held in London this month. When we asked one of the prominent participants at the Conference for his opinion of Mr. Opie's analysis, he shook his head a little sadly, saying, "I don't think Douglas Dillon [Secretary of the Treasury and no stranger to South Afri- can high finance] will be especially impressed, do you?"

NTU

April 1964-Vol. Xl, No. 4 Editor: Collin Gonze Assistant Editor: Catharine Raymond Edit6rial Board: George M. Houser, Joseph Jablow, Homer A. Jack, William Robert Miller, Peter Weiss. Paris: Elizabeth Landis

Aiyetoro, Community of Cooperators 4 Kenneth and Anna Newton

Bechuanaland, Road to the North.... 7 Mlartin Legassick

South West Africa in the International Court of Justice.... 10

Elizabeth S. Landis

BOOKS Five Stars Over the Horn ................ 13

Alan Rake

Africa in Peking ........ ......... 14 Sheldon G. Weeks

The Common Meat of Atrocity ............ 14 Anne Taillefer

LETTERS Charles C. Walker ......... ........ 15

Mark Starr ..... ............ 15

Cover drawing by Paul Hogarth, from "Sons of Adam" (Thomas Nel-

son & Sons, New York, 1.960)

Published 10 times a year by the American Committee on Africa, Inc. Subscriptions: One year, $5.00; two years, $9.50; three years, $13.50. Students: one year $2.00. Foreign (except Canada and Pan Amer- ica) add $1.00 per year. Sterling zone checks accepted. Advertising: Rates on request. Change of Address: Notify four weeks in advance, advising old and new address. Un- solicited manuscripts will not be returned un- less requested and accompanied by a stamped, self-addressed envelope. Application to mail at second class postage rates is pending at New York, NY. Copyright ? 1964 by American Committee on Africa, Inc., 211 East 43rd Street, New York 17, N. Y. TN 7-8733

2 AFRICA TODAY

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