THE NOME NUGGET
Published Monday, Wednesday and Friday by The
NOME PUBLISHING CO.
Nome, Alaska
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W. A. and EMILY BOUCHER.Editors
Entered as second class matter October 14, 1943, at the postoffice
at Nome, Alaska, under the Act of March 3, 1879.
Wednesday, July 9, 1947
A Choice Of Doctrines
(Rocky Mountain News)
GREAT WARS do not come as bolts from a clear sky.
Their causes are cumulative. They result from the loos
ing of forces which gather momentum until they be
come as irresistible as the tide.
The shooting in World War II began Sept: 1, 1939,
when Hitler invaded Poland, six months after he in
vaded Czechoslovakia, and one year after Munich. Bri
tain and France declared war two days later.
Formal hostilities between' Japan and China date
from the exchange of shots by troops of the two coun
tries near Peiping on July 7, 1937. But that, too ,was the
climax of a long series of incidents.
Historians are coming to regard the Jap invasion of
Manchuria in 1931 as the actual beginning of World
War 11, and the Italian attack on Ethiopia in October,
1935, as the opening of its European phase.
We thought of these beginnings of the most tragic
period in history recently when reading the report that
Outer Mongolian troops, allegedly supported by Rus
sian planes, had invaded the Chinese province of Sin
kiang.
History has a habit of repeating itself.
Outer Mongolia is a Soviet satellite, so this unde
clared war is in fact a Russian invasion of China, in the
same sense that a Yugoslavian attack on Greece would
be accepted as a Soviet attack.
This attack on Sinkiang probably was not the start of
an all-out war against China. More likely, it was a feel
er, designed to determine how the other great powers,
including America, will react. If so, it is in the same pat
tern as the Soviet coup in Hungary, the demand for a
pro-Russian government in Austria, and the Commun
ist intrigues in Italy and France.
But, taken together, these developments add up to an
impressive threat of an all-out war to come.
Hitler, Mussolini and the Jap war lords pushed their
luck too far and* found death for themselves and brought
civilization to the brink of destruction.
Premier Stalin and his associates in the Kremlin can
provoke a repetition of that catastrophe by pursuing the
mad adventure upon which they have embarked.
But though it is late, it is not too late for Russia to
seek and find an answer to all her legitimate needs by
peaceful means.
The solution can be found in President Truman’s
statement at Ottawa:
“We seek a peaceful world, a prosperous world, a free
world, a world of good neighbors, living on terms of
equality and mutual respect, as Canada and the United
States have lived for generations.”
The world of tomorrow must be such a world if civil
zation if to survive and move on to better things. Can
ada and the United States have found happiness and se
curity in that kind of world. And, as the President said,
“We intend to expend our energies and invest our sub
stance in promoting world recovery by assisting those
who are able and willing to make their maximum con
tribution to the same cause. ... To build a better world
in which mankind can live in peace and prosperity.”.
The choice today is between that doctrine and the
doctrine of Hitler and Mussolini, which can end only in
chaos and disaster. .
The Veto Power ( '
(The Denver Post)
PRESIDENTIAL VETOES of the tax reduction and
labor bills have resulted in Congressional proposals for
an easier method of overruling the chief executive. Sug
gestions have been made that the constitution be amend
ed so as to permit Congress to override a veto by a sim
ple majority vote instead of a two-thirds vote as now re
quired. Such a change would be a mistake. It would
tend to destroy the balance of power which the consti
tution seeks to maintain between the legislative and
executive branches of the Federal government.
The constitution gives to Congress the law-makin^
power. But it permits the President to veto any act
which he does not approve. Permitting passage of a bill
over the President’s veto by a simple majority would
nullify his veto power.
In the case of the Tax-cut veto, which was sustained
in the House, it has been argued that tax policy tradi
tionally has been regarded as a function of the legisla
tive, rather*than the executive, branch of government.
This is no more the fact than with any other policy mak
ing. The President, and rightly under our philosophy of
government, has the same obligation to pass on tax bills
as on any other measures voted by Congress.
The framers of the Constitution were much wiser in j
many respects than many of those who would change,
this instrument. When the President vetoes a bill, that
does not necessarily mean it should not and cannot be
enacted into law. But unless there is a substantial ma
jority in Congress for overruling his decision, the mea-|
sure should not pass over his veto. The two-thirds ma-<
jority requirement is not unreasonable. It should not
be changed.
GAME GUYS
/wovnmHT
Gold Price Boost Opposed As Inflation
* I
.By Dr. Alonzo B. May)
The high price paid for gold in
countries where the gold market is
free and the even higher price
paid in black markets has raised
the question as to whether the
United States government should
increase the price of gold from its
I present $35 per ounce,
i In recent months the price of
; gold has been $32 n«r ounce in In
dia, $65 to $70 in Egypt, and $86
! in Palestine. Both Brazil and Mex
, ico sell gold to the public for
! about $40 per ounce. In, other
countries where black markets
flourish the price is \even higher.
In spite of higher prices abroad,
the flow of gold to the United
! States has been on the increase
since late 1945. For the preceding
four years our gold stock declined
because of our war buying abroad.
The net increase in American gold j
holdings for 1946 was 464 million
dollars. Our increase thus far this
year is one billion dollars—half of j
the gain taking place in the month
of April. At the current rate
American gold supplies will in
crease almost 3 billion dollars in
1947. This rate of increase has
been exceeded only in 1939 and
1940 when large supplies of “sac
red gold” were sent to this coun
try for safekeeping.
The American gold supply for
monetary purposes is about 20 and
one-half billion dollars or 58 per
cent of the world’s monetary gold.
Our supply of earmarked gold
is about 3 and one-half billion
dollars. This is gold which is own- •
ed by foreign governments and
banks. As a rule this gold is not ^
used except when countries are
low on dollars. The use of this
gold, that is, its sale to the United
States, is an indicator of the de
gree of distress in the world. It is
nteresting to note that for the
month of April alone earmarked
'/old was reduced by 10 per cent.
If American exports and imports
continue at the same rate as in the
first quarter of this year the rest
of the world will lose all of its gold
and dollar supplies within three
years.
The question is whether the
United States should pay more
than $35 for gold. The usual argu
ments for an increase in price are:
(1) the quantity of newly mined
gold will increase; (2) American
gold mines will be more prosper
ous; <3) the monetary system will
be benefited; (4) American foreign
trade will be increased.
There is no doubt that gold
mines which are marginal con
cerns, that is, just break even at
$35, will become profitable if the
price is raised. On the other hand,
if the general price level contin
ues to fall mining costs will de
crease and mines now operating at
a break-even point will make pro
fits at $35. The bureau of labor
statistics wholesale commodity
price index number was 149.4 for
the last week in March, for May 31
it was 147.4. Gold mining, inci
dentally, is the source of about 15
per cent of the national income
for the Union of South Africa, and
3/10 of one per cent for the United
States.
It is doubtful whether the Amer
ican monetary system would be
benefited. An increase now in the
price of gold would be inflation
ary and particularly undesirable
in view of the excessive amount
of money and credit currently in
circulation and the inadequate
supplies of goods, especially dur
able goods, to meet domestic and
foreign demands. Further acquisi
tions of gold from the stocks of
other countries would also impair
the security of their money sys
tems.
An increase in gold prices would
5‘imulate our exports. Nations
which have gold supplies would
find th£ purchasing power of their
gold increased by the extent of the
markup. This is not the time, how
ever, to artificially stimulate the
export of American goods.
In 1933, President Roosevelt in
creased the iJrice of gold from $20
to $35 per ounce. One of the rea
sons for this act was to increase
our exports. Under the new price
a foreigner could buy $15 more
merchandise in our market with
an ounce of gold than he could be
fore the gold price increase. There
is no doubt that such a policy
tends to increase exports, but the
effect is only a temporary stimu
lus to business—a “shot in the
arm.”
Briefly summarizing, I believe
that the United States should not,
at this time, increase the price of
gold. Our job now is to co-oper
ate with the International Mone
tary Fund in its efforts to assist
member nations to stabilize their
currencies; to co-operate with the
International Bank of Reconstruc
tion and Development in order to
rehabilitate war-torn areas and
assist nations to build and balance
their economies; and finally to
provide needed purchasing power
to foreign nations through loans
rather than by dubious expedients
such as increasing the price of
gold.
The U. S. annually produces 50
per cent more coal than was
available to Germany in 1939.