Reviews: September/October 2017

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One Nation Under Gold
James Ledbetter ’86
Liveright Publishing Corp, $28.95
Reviewed by Melinda Beck ’77

Melinda Beck ’77, a longtime editor and columnist at the Wall Street Journal, is a writer in New York City.
 

Gold has been inextricably tied with American history, luring the first European explorers, propelling settlers westward, and helping fuel the myth of America as a place where anyone could strike it rich.

As a basis for the nation’s currency, however, gold has repeatedly caused trouble, as James Ledbetter ’86 writes in his fascinating economic history, One Nation Under Gold. Ledbetter, the editor of Inc. magazine, describes how the gold standard left the country vulnerable to scandals, speculators, and one monetary cliffhanger after another, exacerbating political divisions along the way.

Establishing the dollar tied to gold did help unite the fledgling states, which originally relied on a crazy quilt of metals, paper notes, and barter. But there was never enough gold to keep up with the country’s economic growth or sudden needs. To finance the Civil War, Congress created paper “greenbacks.” To help halt the Great Depression, FDR banned private ownership of gold.

In the 1960s, the number of US dollars held by foreign countries—all officially redeemable in gold—so outstripped the gold in US reserves that chaos would have ensued had nations chosen to cash in. Desperate to produce more gold, Lyndon Johnson’s administration considered blasting it out of the ground with nuclear weapons, before wiser heads prevailed.

All along, proponents of the gold standard have seen it as a check against government growth—and still do. The Republican party platforms of 2012 and 2016 called for considering a “metallic basis for US currency” and Donald Trump, then the GOP nominee, told GQ magazine last year: “Bringing back the gold standard would be very hard to do, but boy, would it be wonderful. We’d have a standard on which to base our money.” Ledbetter’s book makes an excellent case for how misguided that would be.