25. McReynolds’s tirade was not recorded anywhere. Newspaper accounts vary slightly in their wording. “Constitution Gone, Says M’Reynolds,” New York Times, February 19, 1935.
26. Roosevelt to Joseph P. Kennedy, February 19, 1935, in F.D.R.: His Personal Letters, 1928–1945, ed. Elliott Roosevelt (New York: Duell Sloan and Pearce, 1948–1950), 1:455.
27. “Roosevelt’s monetary inflation bore bitter fruit. It increased credit when no one wanted to borrow and improved America’s foreign trade position when all too few wanted American products. At best, domestic prices stabilized rather than rose. Debtors and small producers were not benefited. Neither was large wealth penalized; just horrified. Adversely, the almost halved dollar raised the tariff by nearly 50 percent (by the change in the rate of exchange) and thus helped bolster a wall of economic nationalism.” Paul K. Conkin, FDR and the Origins of the Welfare State (New York: Thomas Y. Crowell, 1967), 44–45.
28. Allan H. Meltzer, A History of the Federal Reserve, Volume 1, 1913–1951 (Chicago: University of Chicago, 2003), 504ff.
29. Winston Churchill, Their Finest Hour (Boston: Houghton Mifflin, 1949), 2:573–574.
30. There are several detailed accounts of how the Bretton Woods agreements came to be. One is in Rauchway’s The Money Makers, from chapter 10 onward. Another is in Benn Steil, The Battle of Bretton Woods: John Maynard Keynes, Harry Dexter White, and the Making of a New World Order (Princeton, NJ: Princeton University Press, 2013).
31. Robert W. Oliver, Bretton Woods: A Retrospective Essay (Santa Monica, CA: California Seminar on International Security and Foreign Policy, 1985).
32. Republican Party Platform, 1952.
33. Francis H. Brownell, Hard Money (Washington, DC: US Government Printing Office. 1944), 13.
34. 79th Congress, 1st session, H.R. 629, May 30, 1945. Report from the Committee on Banking and Currency to Accompany H.R. 3314, Minority Views of Hon. Frederick C. Smith and Hon. Howard H. Buffett, 111–120.
35. “McCarran Asks Free Market Again in Gold,” Reno Evening Gazette, May 6, 1949.
36. “Fort Knox Gold Hoard Can Lead to Ruin, Says Buffett,” Omaha World-Herald, March 24, 1949.
37. 80th Congress, 2nd session, H.R. 5031.
38. United States Treasury Department Provisional Regulations Issued Under the Gold Reserve Act of 1934, January 30 and 31, 1934, section 19.
39. US Treasury Department Mint Service to Lillie Mae Hubbard, October 16, 1934, http://credo.library.umass.edu/view/pageturn/mums312-b072-i237/#page/1/mode/1up.
40. Ernest Buffett produced thousands of stickers reading “I AM AGAINST THE THIRD TERM” and sold them, not for profit, to individuals and organizations that ordered them in 1940. This campaign is recalled in Bill Buffett, Foods You Will Enjoy: The Story of Buffett’s Store (self-published book, 2008), 119–121.
41. “ ‘Goldbacks’ Back,” Sunday (Omaha) World-Herald Magazine, August 29, 1948.
42. Treasury natural gold estimates come from Minerals Yearbook 1950 (Washington, DC: US Bureau of Mines), 561.
43. Truman press conference, July 22, 1948, http://www.presidency.ucsb.edu/ws/index.php?pid=12965.
44. “Searls Unites With M’Carran in Gold Fight,” Nevada Mining Journal, May 20, 1949.
45. 81st Congress, 1st session, Hearings Before the Committee on Banking and Currency on S. 13 and S. 286, May 5th and 6th, 1949. Searls’s testimony is on 79–94.
46. Howard Buffett, Washington Report, May 8, 1952, Nebraska State Historical Society.
47. Michael Bowen, The Roots of Modern Conservatism: Dewey, Taft and the Battle for the Soul of the Republican Party (Chapel Hill: University of North Carolina Press, 2011), 6.
48. Robert A. Taft to Winthrop Aldrich, July 5, 1944, The Papers of Robert A. Taft: 1939–1944 (Kent, OH: Kent State University Press, 2001), 567.
Chapter 6: Out of Balance
1. “The London Gold Market,” Quarterly Bulletin, Bank of England, March 1964.
2. Minutes of Meeting in Secretary Anderson’s Office at 2 p.m. Wednesday, December 7, 1960, Julian Baird Papers, Minnesota Historical Society, Box 1.
3. Theodore G. Sorensen, Kennedy (New York: Harper & Row, 1965), 408.
4. “Week’s Gold Loss Biggest Since ’31,” New York Times, September 23, 1960, 41. In 1947 and 1959, quota payments to the International Monetary Fund entailed larger gold outflows, but the one in September 1960 was the largest in a “normal” week since 1931. Moreover, the gold outflow to the IMF in 1959 was effectively reversed, as discussed later in this chapter.
5. Charles A. Coombs, The Arena of International Finance (New York: John Wiley & Sons, 1976), 54.
6. Ibid., 59.
7. Meeting with the president, Regarding Recent Developments in the London Gold Market, October 25, 1960, FRUS, 1958–1960, Foreign Economic Policy, vol. 4, document 56.
8. See, for example, various memoranda from Julian Baird and Robert Anderson to the Nixon campaign, October 1960, Julian Baird Papers, Minnesota Historical Society, Box 1.
9. Remarks of Senator John F. Kennedy, New Fieldhouse, Moline, IL, October 24, 1960.
10. “Text of Eisenhower’s Address to Republican Leaders in Philadelphia,” New York Times, October 29, 1960.
11. Anderson to president, 11/9/60, DDE Diary Series, Box 54, DDEL.
12. Memorandum of Conference with President Eisenhower, November 15, 1960, FRUS, 1958–1960, Foreign Economic Policy, vol. 4, document 58.
13. 338th Meeting of the National Security Council, October 2, 1957, Box 9, NSC Series, Dwight D. Eisenhower: Papers as President, DDEL.
14. FRUS, 1958–1960, vol. 4, document 57.
15. Minutes of Meeting in Secretary Anderson’s Office at 2 p.m. Wednesday, December 7, 1960, Julian Baird Papers, Minnesota Historical Society, Box 1.
16. The exact reasons why the IMF sold gold to the United States during the Eisenhower years are debatable. Officially, in 1956 the IMF expressed a need to strengthen its internal financial resources; the Fund constantly ran operational deficits in its early years. And thus it sold $200 million in gold to the United States, with a right of repurchase, and invested the funds in US dollar securities. See, for further explanation, the IMF report “Factors Relating to Burden-Sharing in the Fund,” EBS/85/126, May 14, 1985, 8–9. But of course, that goal could have been accomplished in any number of ways. Moreover, there was no indication when the initial 1956 transaction took place that supplemental sales would be necessary, and when a second sale occurred in 1959, an IMF Board director admitted that the Fund had a surplus, and thus “it would not be legally possible for the Fund to sell gold to the United States in order to replenish its supply of dollars.” (See FRUS Foreign Relations, 1958–1960, vol. 4, document 47.) And the November 1960 sale was clearly initiated by US Treasury officials who were panicked by the balance-of-payments crisis. It’s worth noting that the IMF did buy the gold back in the early 1970s.
17. My discussion of the early formation of the London Gold Pool relies in part on International Economic Relations of the Western World 1959–1971, vol. 2, ch. 3 (New York: Oxford University Press, 1976), and in part on Coombs, The Arena of International Finance.
18. Coombs, The Arena of International Finance, 32.
19. “Impatience at a Stern Voice,” Wall Street Journal, December 2, 1960.
20. “Plugging a Gold Leak,” New York Times, January 16, 1961.
21. Background Memo for Anderson-Dillon Conference, undated, from Horace Busby to Senator Johnson, LBJL, Vice Presidential Security Files, Box 9, Notebook on NATO 1960, document 39.
22. Report on Survey of Items of Jewelry and Other Objects Containing Large Amounts of Gold, August 22, 1961, General Records of the Department of Treasury, Office of Gold and Silver Operations, Gold Subject File, 1933–1974, Box 12, NARA.
23. Robert Triffin, Gold and the Dollar Crisis (New Haven: Yale University Press, 1960), 52.
24. Many of the details of Franz Pick’s life and philosophy are taken from John Kobler, �
�The Black Marketeers’ Best Friend,” Saturday Evening Post, May 2, 1953. See also Tom Bethell, “Crazy as a Gold Bug,” New York, February 4, 1980.
25. “Ex-Chief of Toronto Exchange Suspended in Mining Stock Deal,” New York Times, November 15, 1957.
26. Assistant U.S. Attorney Grenville Garside, quoted in United Press International story, May 24, 1962.
27. Thomas Wolfe to Bruce MacLaury, September 14, 1970, General Records of the Department of Treasury, Office of Gold and Silver Operations, Gold Subject File, 1933–1974, Box 28, NARA.
28. William H. Brett, Director of the Mint, to John M. Laxalt, April 9, 1958.
29. Details of Polk’s biography and art work can be found in F-F-F-Frank Polk: An Uncommonly Frank Autobiography (Flagstaff, AZ: Northland Press, 1978).
30. Laxalt’s biographical details come from Richard L. Spees, “Paul Laxalt: Man of Political Independence,” in The Maverick Spirit: Building the New Nevada (Reno: University of Nevada Press, 1999), 166–193.
31. U.S. District Court for the District of Nevada, Civil no. 1502, United States of America v. One Solid Object In Form of a Rooster, Reporter’s Transcript of Proceedings, 2:220, 225–226.
Chapter 7: Operation Goldfinger
1. During the Cold War, tremendous energy and resources were devoted to estimating the level of Soviet gold production and gold reserves; production estimates in the early 1960s ranged widely, anywhere from $300 million to $700 million. Significant quantities were sold regularly in Western markets, from which estimates were made. In 1964, however, the CIA provided a far lower estimate—below $200 million—causing some other institutions to change their guesses. See Keith Bush, “Soviet Gold Production and Reserves Reconsidered,” Soviet Studies 17, no. 4 (April 1966): 490–493.
2. Minerals Yearbook 1966 (Washington, DC: US Bureau of Mines), 80.
3. Bartlett made this comment during a hearing on March 15, 1962, before the Senate Subcommittee on Minerals, Materials and Fuels of Interior and Insular Affairs.
4. Ernest Gruening et al. to the President, August 30, 1965, White House Central File, Subject Files on Finance, Box 54, LBJL.
5. Sorenson, Kennedy, 408; Ball oral history interview #2 (July 9, 1971), LBJL, 19.
6. Oral History Transcript, C. Douglas Dillon, AC 74-12, Interview 1, p. 7, LBJL.
7. Conversation between President John F. Kennedy, William McChesney Martin Chairman of the Federal Reserve, and Theodore Sorensen—August 16, 1962, 5:50–6:32 p.m., tape 13, President’s Office Files, JFKL.
8. Johnson quote to Dirksen, March 1965, cited in Francis J. Gavin, Gold, Dollars & Power: The Politics of International Monetary Relations 1958–1971 (Chapel Hill: University of North Carolina Press, 2004), 117.
9. John F. Kennedy, “Address and Question and Answer Period at the Economic Club of New York,” December 14, 1962, online at Gerhard Peters and John T. Woolley, The American Presidency Project, http://www.presidency.ucsb.edu/ws/?pid=9057.
10. Joseph W. Barr, Oral History, Interview 2, January 16, 1970, p. 23, LBJL.
11. William B. Dale, Memorandum to Paul Volcker, March 10, 1969, Volcker files, NARA.
12. 456th Meeting of the NSC, October 31, 1960, Whitman File, NSC Records, DDEL, FRUS 1958–1960, vol. 4, document 266. I have been unable to verify the facts of Anderson’s assertion, but if he was falsely claiming that the Italian government had drained the US gold supply, this only underscores the degree of the White House’s fear.
13. A detailed discussion of the burgeoning industrial uses of gold can be found in ch. 14 of Ray Vicker’s The Realms of Gold (London: Robert Hale, 1975), 223–225.
14. Thirty-Sixth Annual Report, Bank for International Settlements (Basle, 1966), 33–34.
15. International Monetary Fund Annual Report, 1966, 114.
16. “First Major Change Made in Coin System,” in CQ Almanac 1965, 21st ed. (Washington, DC: Congressional Quarterly, 1966), 882–886, http://library.cqpress.com/cqalmanac/cqal65-1258091.
17. The exchange took place in the pages of The Review of Economics and Statistics. See L. Dudley and Peter Passell, “The War in Vietnam and the United States Balance of Payments,” November 1968, followed by Douglas Bohi’s response in November 1969.
18. Memorandum from the president’s Deputy Special Assistant for National Security Affairs (Bator) to President Johnson, July 6, 1966, LBJL, National Security File, Balance of Payments, vol. 3 [1 of 2], Box 2.
19. Bator’s essay was a comment on Richard N. Cooper, “Foreign Economic Policy in the 1960s: An Enduring Legacy,” in Economic Events, Ideas, and Policies: The 1960s and After (Washington, DC: Brookings Institution Press, 2000), 139–176.
20. Memorandum to the Secretary, April 4, 1966, Subject: Operation Goldfinger, LBJL, Fowler papers, Box 88.
21. Memorandum for the President, April 6, 1966, from Henry Fowler and Charles L. Schultze, LBJL, Fowler papers, Box 88.
22. Memorandum to the Secretary, March 24, 1966, from Fred B. Smith, LBJL, Fowler papers, Box 88.
23. The diplomat in question was Robert Pelikan, the financial attaché to the American Embassy in Tokyo. The 1965 GAO report was an embarrassment for Treasury and the Johnson Administration; it noted that the Tokyo house featured “gold-plated bathroom fixtures and a glass display case for jewelry.” See “Special Treasury Fund Challenged by GAO,” Washington Post, August 1, 1965.
24. U.S. Geological Survey Heavy Metals Program Progress Report 1968—Field Studies, Geological Survey Circular 621 (Washington, DC, 1969), 106.
25. The Investment in Natural Resource Science and Technology: A Special Report, United States Department of the Interior, 83.
26. A summary of Goldfinger projects can be found in U.S. Geological Survey Heavy Metals Program Progress Report 1968—Topical Studies, Geological Survey Circular 622 (Washington, DC, 1969). See also Gold in Meteorites and in the Earth’s Crust, Geological Survey Circular 603 (Washington, DC, 1968).
27. John E. Bardach, Harvest of the Sea (New York: Harper & Row, 1968), 77.
28. Hornig quoted in Robert Rienow, “Manifesto for the Sea,” American Behavioral Scientist 11, no. 6 (July–August 1968).
29. Memorandum from J. P. Hendrick to Fred B. Smith, March 28, 1966, LBJL, Fowler papers, Box 88.
30. “Vessel to Explore Floor of the Pacific for Precious Metal,” New York Times, March 6, 1967.
31. Memorandum to the Treasury Secretary from Eugene V. Rostow, “Reflections on our recent talks with Alexander Sachs,” March 12, 1968, LBJL, Fowler papers, Box 88.
32. Plowshare’s propagandistic origins are explored in Trevor Findlay, Nuclear Dynamite: The Peaceful Nuclear Explosions Fiasco (Sydney: Brassey’s Australia, 1990).
33. Edward Teller, “We’re Going to Work Miracles,” Popular Mechanics, March 1960, 100.
34. A thorough account of the Sedan detonation and the subsequent controversy over radioactive fallout can be found in chapter 4 of Scott Kirsch’s Proving Grounds: Project Plowshare and the Unrealized Dream of Nuclear Earthmoving (New Brunswick, NJ: Rutgers University Press, 2005). See also Philip L. Fradkin, Fallout (Tucson: University of Arizona Press, 1989), 135–136.
35. The AEC and Livermore produced a booklet called Sloop: A Study of the Feasibility of Fracturing Copper Ore Bodies with Nuclear Explosives (Springfield, VA, 1967), but it does not cover the project’s intersection with gold mining. By far the most comprehensive secondary account of Project Sloop I have found is a study produced for the Department of Energy, The Off-Site Plowshare and Vela Uniform Programs: Assessing Potential Environmental Liabilities through an Examination of Proposed Nuclear Projects, High Explosive Experiments, and High Explosive Construction Activities (vol. 2 of 3), Desert Research Institute, Las Vegas, 2011, section 4.37.
36. Minerals Yearbook 1967, U.S. Bureau of Mines, 446.
37. Remarks of Rep. Craig Hosmer, Symposium on the Public Health Aspects of Peaceful Nuclear Explosives, Las Vegas, Nevada, April 8, 1969.
38. Congressional Record—House, February
21, 1968, 3690–3691.
39. Nuclear Dynamite, 184. See also Gulf Universities Research Consortium, Peaceful Nuclear Explosion Activity Projections for Arms Control Planning (Galveston: The Consortium, 1975), 129.
40. Fowler’s identical letters to Seaborg and Udall are dated March 25, 1968, and located in the Fowler papers, Box 88, Operation Goldfinger file, LBJL.
41. The technical findings from Seaborg and his colleagues are in “Energy Dependence of 209Bi Fragmentation in Relativistic Nuclear Collisions,” Physical Review C (March 1981): 1044–1046. A useful summary of the experiment in layman’s terms can be found in “Fact or Fiction? Lead Can Be Turned Into Gold,” Scientific American, January 31, 2014. Seaborg’s comment was to the Associated Press, March 22, 1980.
42. A detailed account of the Rio Blanco explosion can be found in Frank Kreith’s and Catherine Wrenn’s The Nuclear Impact (Boulder, CO: Westview Press, 1976).
43. Telephone interview with the author, December 15, 2014.
44. See, for example, “New Gold Recovery Process Tested,” Washington Post, March 28, 1968.
45. Joseph W. Barr Oral History Interview II, 1/16/70, by Joe B. Frantz, LBJL, 8.
Chapter 8: Dueling Apocalypses
1. Federal Open Market Committee meeting, November 27, 1967, 6.
2. T. P. Nelson to Secretary Fowler, “Gold and Exchange Market Developments, November 23–24,” November 24, 1967. Fowler papers, Box 83, Gold: September 1967 file, LBJL.
3. Frederick Deming Oral History, tape 2, p. 18, LBJL.
4. Johnson phone call with William McChesney Martin, August 5, 1965, conversation WH6508.02, audio accessible at http://millercenter.org/scripps/archive/presidentialrecordings/johnson/1965/08_1965.
5. This account relies on the memoirs of Harold Wilson and others, as well as Arran Hamilton, “Beyond the Sterling Devaluation: The Gold Crisis of March 1968,” Contemporary European History 17, no. 1 (February 2008): 73–95.
6. Memorandum from Secretary of the Treasury Fowler to President Johnson, November 12, 1967, LBJL, National Security File, NSC History, Gold Crisis, November ’67–March ’68, Box 54.
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