Perils & Profits

San Francisco last week was the starting point of what was described as the greatest gold shipment of all time. Two billions in bullion, one-third of all the gold in the land, began to move 1,440 mi. to the U. S. Mint at Denver. And 1,796 mi. farther east, beneath a huge portrait of Benjamin Franklin in his big new Washington office, sat the bald-headed man who was morally, physically and financially responsible for the fabulous shipment. By law it was up to Postmaster General James Aloysius Farley to get the Government's gold from mint door to mint door intact.

In announcing this transfer last month, the Treasury had talked as if it were afraid of California earthquakes. San Franciscans, touchy as ever about their $500,000,000 "fire" in 1906, preferred to believe that the gold was being taken inland to protect it against possible Japanese invasion or to clear the way for the construction of a new mint.

From a special platform beside the 60-year-old mint building, which was one of the few to withstand the shambles of 1906, twelve mail trucks began to load at night. Under the glare of fire department floodlights, convoyed by cars full of special police sharpshooters. Federal officers and soldiers with machine-guns, each mail truck carried one ton of the root of all evil down to the Southern Pacific depot at Third and Townsend Streets. It was packed into three steel mail cars, behind which were coupled two Pullmans for troops and guards. Crowds were kept half a block away from the station, so nobody knew when or by precisely what route the gold train started on its secret journey. In charge was one of the trustiest old postal inspectors in the service--George Austin.

Presumably the train rolled down the Peninsula, crossed San Francisco Bay by the Dumbarton Cutoff Bridge, circled north to Sacramento, skirted Lake Tahoe, clacked through Reno, crossed the widest part of Great Salt Lake by the Southern Pacific's spectacular trestle to arrive at Ogden on the eastern shore. There it ran onto the Union Pacific's tracks, reaching Denver at nightfall.

There Inspector Austin uneasily watched a repetition of the San Francisco precautions. More police, more troops, more floodlights protected the last sack and in got of the precious metal over the two-mile route from station to mint.

If the Government's two billion in gold were to topple irretrievably into San Francisco Bay, if it should slide to oblivion into one of the pit-like canyons near Tahoe, if it were to sink forever out of sight beneath the dazzling surface of Salt Lake, if some superlative gang of desperadoes should snatch it into the underworld, the people of the U. S., according to Secretary of the Treasury Henry Morgenthau, would not have been much the poorer as a result.

By nationalizing gold and cutting the gold content of the dollar almost in two, explained Secretary Morgenthau last week in his first radio speech since taking office, the Government's books now showed that it had nearly two dollars for every one it had before. So if two billion in Government gold should vanish, the Treasury would simply have to cancel some of the paper profit it made on the devaluation transaction. "Profits" to date, announced Mr. Morgenthau, discussing the $6,000,000,000 increase in national indebtedness since the New Deal began, amounted to $2,800,000,000. This will ultimately "flow back into the stream of our other revenues and thereby reduce the public debt."

The thought of $2,800,000,000 worth of new paper money gave businessmen such a turn that next day President Roosevelt at Hyde Park made haste to assure the country that gold profits must be regarded as "a nest egg to be disposed of only in the indefinite future."

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