| LONDON - 11 November 1999
World Gold Council study on central banks' gold reserves
A new study published today by the
World Gold Council discloses how the world's leading central banks
acquired their gold reserves in the late 19th and early 20th centuries.
This issue is particularly topical today in the context of the recent
Washington Agreement, under which 15 European central banks have agreed
to limit their sales and leasing of gold reserves until 2005; and given
that the official sector accounts for some 25 per cent of all above-ground
stocks of gold.
Written by Timothy Green, a well-known writer who has for many years
studied the history of gold, this new study gathers together material
from a wide range of disparate official sources.
The report tracks the growth of official minting of gold coinage in the
world's biggest economies, and analyses how the surge in gold output in
the late 19th century assisted the development of an international gold
standard.
In particular, it traces how the growth of official sector gold stocks
- much smaller than stocks in the hands of private individuals, even as
late as 1895 - was facilitated by the widening of the gold standard 'club'
and the demise of the bimetallic monetary standard, based on gold and
silver, in the United States.
Green argues that the greatest impetus towards government domination
over the world's gold stocks came with the First World War, in the shadow
of which "many central banks and treasuries built war chests. Official
reserves in France, Germany and Russia doubled between 1900 and the end
of 1913; in the US they quadrupled…In all, over 3,000 metric tonnes
of gold coin moved from circulation into central banks during or soon
after the war."
The study also pinpoints the dominant position of the US in the years
following 1918, the key move being the official fixing of the price of
gold at $35 per troy ounce in January 1934 by President Roosevelt, a move
which "started a virtual one-way traffic to New York for the next
fifteen years." Before that, the US "held 6,070 metric tonnes,
by 1938 they had 11,340 metric tonnes, and by 1942 20,205 metric tonnes."
By the early 1950s official US stocks accounted for half of all gold ever
mined. The situation is somewhat different today but the United States
still holds the largest gold stocks.
Timothy Green is available for interview and copies of the study are
available from the World Gold Council, Kings House, 10 Haymarket, London
SW1Y 4BP, or a PDF file can be downloaded
from the WGC's website.
Contacts: Timothy Green, (00 44) 171 834 1123
Gary Mead, Head of Research, (00 44) 171 766 2719 |