by Matthew Hart
Brad’s new employers: South African Press Association, “Aurora to Pay R10m—Court,” Mining Weekly, January 12, 2012, http://www.miningweekly.com/article/aurora-to-pay-r10m-court-2012-01-12; Sarah Britten, “Khulubuse Zuma’s Lifestyle Thrust into Auction,” Mail & Guardian, April 24, 2012, http://www.mg.co.za/article/2012-04-24-khulubuse-zumas-lifestyle-thrust-into-auction; “Zondwa Mandela Faces Charges over Aurora,” Mail & Guardian, December 11, 2011, http://www.mg.co.za/article/2011-12-11-zondwa-mandela-faces-charges-over-aurora; Martin Plaut, “Mandela and Zuma Goldmine ‘Exploiting workers,’ ” BBC News, May 5, 2011, http://www.bbc.co.uk/news/world-africa-13275704.
The town of Springs: H. E. Frimmel, D. I. Groves, et al., “The Formation and Preservation of the Witwatersrand Goldfields, the World’s Largest Gold Province,” in Economic Geology, 100th Anniversary volume, 2005, 769–97, http://www.geo.arizona.edu/geo6xx/geo646a/646A_PW/Papers/Surface-related_Papers/Frimmel05_WitsAu_EG100thAV.pdf.
Forty percent of all the gold: Ibid.
The property covered: Herbie Trouw, Aurora underground manager and thirty-year veteran of the goldfield, interview with author.
Yet underground, the Aurora mine: Ibid.
In the exchange of fire: See also Shain Germaner, “ ‘Bad Brad’ Group Had Been Scouting,” IOL News, September 14, 2011, http://www.iol.co.za/news/south-africa/mpumalanga/bad-brad-group-had-been-scouting-1.1137200#.UXA74b_Xf0A; “Aurora Justifies Mine Killings,” Mail & Guardian, August 13, 2010, http://mg.co.za/article/2010-08-13-aurora-justifies-mine-killings; “Mystery of Aurora Corpses,” Mail & Guardian, August 13, 2010, http://mg.co.za/article/2010-08-13-mystery-of-aurora-corpses.
A 2001 monograph: Peter Gastrow, Theft from South African Mines and Refineries, Chapter 2, “The Product Theft of Gold,” Monograph No. 54, 2001, Institute for Security Studies, http://www.iss.co.za/Pubs/Monographs/No54/Chap2.html.
At the Barberton mine: Martin Creamer, “Barberton’s Criminal Mining Smashed,” Mining Weekly, September 10, 2010, http://www.miningweekly.com/article/barbertons-criminal-miningsmashed.
At just one of its mines: Gold Fields production from http://www.goldfields.co.za/ops_south_deep.php; gold price from Kitco at http://www.kitco.com/scripts/hist_charts/yearly_graphs.plx.
How many companies: For Gold Fields fourth-quarter profit in 2011 see http://www.iol.co.za/business/companies/gold-fields-profits-increase-1.1236780#.Ubmm2JXXf0A.
I have a little catalogue: Thracian Treasures (Varna, Bulgaria: Slavena Publishing House, 2006).
Today our asset menu: For date of invention of money, see Peter Bernstein, The Power of Gold: The History of an Obsession (New York: John Wiley & Sons, 2000), 32.
Yet by the fourteenth century: Ibid., 110.
CHAPTER 2: RIVER OF GOLD
Spaniards came well equipped: See for example http://www.classicalfencing.com/horsetraining.php; http://www.pbs.org/gunsgerms steel/pdf/episode2.pdf.
When he set out: Bernstein, The Power of Gold, 113.
He mentioned it 114 times: See Jennifer Marx, The Magic of Gold (New York: Doubleday, 1978), 322–24; Richard Cowen at mygeology page.ucdavis.edu/cowen/~GEL115/115ch8.html. I have preferred Cowen’s number as a more recent count.
“A thing like a ball of stone”: http://www.clio.missouristate.edu/chuchiak/hst%20350-theme%209-spanish-weapons-and-armor.htm.
“Gazing on such wonderful sights”: http://www.chnm.gmu.edu/worldhistorysources/sources/conquestofnewspain.htm.
The Florentine Codex: Fray Bernardino de Sahagún, “Malinche Begs Mexicas to Help Spaniards,” Florentine Codex, Book 12, Chapter 18, http://www.faculty.fullerton.edu/nfitch/nehaha/aztec11.html; also at http://www.historians.org.
He was the bastard son: Bernstein, The Power of Gold, 122–23.
The culture and appearance of the Andean people: John Hemming, The Conquest of the Incas (London: Macmillan, 1970; rev. ed., Penguin, 1983), 60.
They worked as part of: María Rostworowski de Diez Canseco, History of the Inca Realm (Cambridge: Cambridge University Press, 1999), 182.
They could move their armies: Liesl Clark, “The Lost Inca Empire,” January 11, 2000, http://www.pbs.org/wgbh/nova/ancient/lost-inca-empire.html.
“Such magnificent roads”: Hemming, The Conquest of the Incas, 101.
Their surgeons could drill holes: Valerie A. Andrushko and John W. Verano, “Prehistoric Trepanation in the Cuzco Region of Peru: A View into an Ancient Andean Practice,” American Journal of Physical Anthropology 137 (2008): 4–13.
Early in 1527: Hemming, The Conquest of the Incas, 25.
They had “glimpsed the edges of a great civilization”: Ibid., 26.
The Inca’s ancestors: Ibid., 121.
The throne did not pass: Ibid., 29.
He did not know whether his forces: Ibid., 30.
Now the Spanish force entered the shadow: Account of Spanish march to Cajamarca, first meeting with Atahualpa, and all events up to attack on Atahualpa and slaughter of Incas: Ibid., 31–43.
He had meant to capture them: Ibid., 45.
With the Inca in Spanish hands: Ibid., 49.
They valued gold: That gold was not the most valuable substance: from Ben Roberts, formerly head of the Department of Prehistory, British Museum, London, now on the faculty of Durham University.
In Cajamarca today: Hemming, The Conquest of the Incas, 48.
A solid-gold sacrificial altar: Ibid., 65. Hemming says it weighed 19,000 pesos, and I have converted using 1 peso = 27.5 grams.
The wonders dazzled the Spaniards: Asian influence; see Bernstein, The Power of Gold, 129.
In a single month they retrieved: Ibid., 130; conversion rate from http://www.measuringworth.com.
In Atahualpa, Pizarro had the tap: Hemming, The Conquest of the Incas, 50–51.
Because of the Inca’s divinity: Inca ruling through generals and Spaniards stripping Cuzco: Ibid., 55–65.
On April 14, 1533: Atahualpa’s last days: Ibid., 71–78.
Pizarro was vilified: Ibid., 80–83.
Some died in fights: Pizarro’s death: Bernstein, The Power of Gold, 131.
CHAPTER 3: THE MASTER OF MEN
Spanish galleons: See general history in “The Spanish Treasure Fleets of 1715 and 1733: Disasters Strike at Sea,” http://www.nps.gov/nr/twhp/wwwlps/lessons/129shipwrecks/.
In 1523 the French corsair: http://www.time.com/time/specials/packages/article/0,28804,1860715_1860714_1860704,00.html.
There would be “no peace beyond the line”: Ian K. Steele, “Imperial Wars,” in The Oxford Companion to American Military History, ed. John Whiteclay Chambers II (New York: Oxford University Press, 1999), 327.
Even so the great fleets: Bernstein, The Power of Gold, 135.
Spain had driven out: Expulsion of Jews and Muslims: Bernstein, The Power of Gold, 140.
“Gold and silver merely acquired”: Marie-Thérèse Boyer-Xambeu, Ghislain Delaplace, and Lucien Gillard, Private Money and Public Currencies: The 16th Century Challenge, trans. Azizeh Azodi (Armonk, NY: M. E. Sharpe, 1994), 116.
Merchants increased the use of bills of exchange: Bernstein, The Power of Gold, 153–57.
In the late 1600s: Stephen Quinn, “Goldsmith-Banking: Mutual Acceptance and Interbanker Clearing in Restoration London,” Explorations in Economic History 34 (1997), 411–32, http://www.econ.tcu.edu/quinn/finhist/readings/goldsmiths.pdf.
The great historian: Barry Eichengreen, Golden Fetters: The Gold Standard and the Great Depression, 1919–1939 (New York: Oxford University Press, 1996).
The president of the World Bank: Alan Beattie, “Zoellick Seeks Gold Standard Debate,” Financial Times, November 7, 2010, http://ft.com/cms/s/0/eda8f512-eaae-11df-b28d-00144feab49a.html#axzz2OfGvMLkz.
On the American right: See for example Ron Paul, “Honest Money,” http://www.ronpaul.com/on-the-issues/fiat-money-inflation-federal-reserve-2/: “If our money were backed by gold and silver, people couldn’t just sit in some fancy building and push a button to create new money. They would have
to engage in honest trade with another party that already has some gold in their possession.”
Similar silver coins: Bernstein, The Power of Gold, 78.
In 1785: see for example “Thomas Jefferson, Propositions respecting Coinage,” The Founders’ Constitution, University of Chicago Press web edition, eds. Philip B. Kurland and Ralph Lerner, http://press-pubs.uchicago.edu/founders/documents/al_8_5s5.html.
Congress set a silver standard: See the Coinage Act of April 2, 1792, http://www.constitution.org/uslaw/coinage1792.txt.
A declining world gold supply: Bernstein, The Power of Gold, 247.
In 1797 the report of a French fleet: Ibid., 199–201.
In 1803 they sold Louisiana: See first paragraph of note to “Primary Documents in American History, Louisiana Purchase,” online at Library of Congress, http://www.loc.gov/rr/program/bib/ourdocs/Louisiana.html.
The bankers running the transaction: For details of the sale, see http://www.baringarchive.org.uk/features_exhibitions/louisiana _purchase.
By 1834 the supply of gold in America: Congress reset gold price: Bernstein, The Power of Gold, 248.
On January 24, 1848, James Marshall panned some bright flakes: Timothy Green, The New World of Gold (New York: Walker, 1981), 5.
In the next seven years, 500,000 men: “The California Gold Rush,” http://www.ceres.ca.gov/ceres/calweb/geology/goldrush.html.
“The whole country from San Francisco to Los Angeles”: Green, The New World of Gold, 5.
“Three men using nothing but spoons”: Richard B. Lyttle, The Golden Path: The Lure of Gold Through History (New York: Atheneum, 1983), 110.
Dozens of new companies formed: Maureen A. Jung, “Capitalism Comes to the Diggings,” in A Golden State: Mining and Economic Development in Gold Rush California, eds. James J. Rawls and Richard J. Orsi (Berkeley: University of California Press, 1999), 53–54.
The inrush of investment supported the development: Robert Whaples, “California Gold Rush,” http://www.eh.net/encyclopedia/article/whaples.goldrush.
The chain pumps brought to California: Ronald H. Limbaugh, “Making Old Tools Work Better,” in A Golden State, 31.
Tradition bathes the California gold rush in a honeyed light: Daniel Cornford, “ ‘We All Live More like Brutes than Humans’: Labor and Capital in the Gold Rush,” in A Golden State, 78.
Some Americans brought slaves: Ibid., 84.
A miner had to wash 160 pails: Freezing water and brutish work: Ibid., 89.
Even the investors suffered: Jung, “Capitalism Comes to the Diggings,” in A Golden State, 54.
In terms of today’s money: Measuringworth.com equates purchasing power of $500 million in 1848 equal to $15 billion today.
Robert Whaples: Email from Robert Whaples to author, March 4, 2013.
At the official U.S. government price: Gold production nearly 2 percent of U.S. GDP: Whaples, “California Gold Rush.”
New discoveries elsewhere in the world added even more production: Green, The New World of Gold, 1.
“As the creditor of the whole earth”: Growth in Bank of England and Bank of France gold stocks: Ibid., 9.
In 1871 Germany bought £50 million worth of gold: Ibid., 21.
“We chose gold”: Bernstein, The Power of Gold, 250.
The silver dominoes began to fall: Green, The New World of Gold, 21.
But some scholars think: See especially Marc Flandreau, The Glitter of Gold: France, Bimetallism, and the Emergence of the International Gold Standard, 1848–1873 (New York: Oxford University Press, 2004).
In 1861, when the costs: Bernstein, The Power of Gold, 262.
As the cost of wheat shot up in Europe, America had a bumper crop: Ibid., 268.
In 1890, a banking crisis in Argentina: Ibid., 252–53, 268.
The havoc that followed: Ibid., 270–72.
The government had $40 million: Ibid., 272.
In American terms, the Morgans had been rich forever: Ron Chernow, The House of Morgan: An American Banking Dynasty and the Rise of Modern Finance (New York: Grove Press, 1990), 17ff.
As the sense of crisis heightened: Ibid., 74 ff.
For all its harshness: Ibid., 74ff.
The system solved two main problems: Author interview with Professor Michael Woodford, Columbia University. (In case there is any doubt about Professor Woodford’s position: he does not at all support a return to the gold standard.)
Barry Eichengreen: “A Critique of Pure Gold,” National Interest, August 24, 2011, http://www.nationalinterest.org/article/critique-pure-gold-5741.
It had 20,000 tons of bullion: Timothy Green, Central Bank Gold Reserves: An Historical Perspective Since 1845 (London: World Gold Council, 1999), 18, http://www.gold.org/download/pub_archive/pdf/Rs23.pdf.
CHAPTER 4: CAMP DAVID COUP
Gold is surging out of the Bank of England: Gold movements and decrease of U.S. gold stock: Bernstein, The Power of Gold, 311–23.
On April 5 he signed Executive Order 6102: For the text of the order, see http://www.presidency.ucsb.edu/ws/index.php?pid=14611.
A challenger immediately tested the law: “Lawyer Indicted as Gold Hoarder,” New York Times, October 6, 1933, http://query.nytimes.com/mem/archive/pdf?res=FA0815FB3E541A7A93C4A9178BD95F478385F9; “Frederick Campbell, Lawyer, Is Dead Here,” New York Times, December 27, 1937, http://query.nytimes.com/mem/archive/pdf?res=F60D14F93C5D12738DDDAE0A94DA415B878FF1D3.
In 1930 the United States: Green, Central Bank Gold Reserves, 17.
As soon as he had issued the gold confiscation order, Roosevelt obtained the authority: Roosevelt and Morgenthau rigging price: Bernstein, The Power of Gold, 321–22.
“We fight together on sodden battlefields”: http://www.centerfor financialstability.org/brettonwoods.php.
A newly discovered transcript: Annie Lowry, “Transcript of 1944 Bretton Woods Conference Found at Treasury,” New York Times, October 25, 2012, http://www.nytimes.com/2012/10/26/business/transcript-of-1944-bretton-woods-meeting-found-at-treasury.html.
“Now the advantage is ours here”: Fred Andrews, “A Grudge Match for Global Finance,” review of Benn Sterl, The Battle of Bretton Woods, New York Times, March 2, 2013, http://nytimes.com/2013/03/03/business/bretton-woods-monetary-agreement-examined-in-a-new-book.html.
For a while, that’s how it did work, with Japan and Europe, “eager for dollars they could spend”: How U.S. share of world economy dropped from 35 percent to 27 percent: Roger Lowenstein, “The Nixon Shock,” Bloomberg Businessweek, August 4, 2011, http://www.businessweek.com/magazine/the-nixon-shock-08042011.html.
Surplus dollar holdings: Bernstein, The Power of Gold, 334.
In a span of only thirteen years: U.S. finances deteriorate: Bernstein, citing Jacques Rueff, ibid., 338–39.
“Gold!” he intoned, the standard that “has no nationality”: Berstein, The Power of Gold, 329.
Two years later: De Gaulle pulls out of Gold Pool: Ibid., 339–41.
On March 11, 1968, only days after the huge bullion transfer from the United States, the pool vowed to hold the line at $35: Clyde H. Farnsworth, “U.S. Wins Backing from Gold Pool to Hold $35 Price,” New York Times, March 11, 1968, http://query.nytimes.com/mem/archive/pdf?res=F30E11FE3A55157493C3A81788D85F4C8685F9.
A week later the pool folded: Edwin L. Dale, Jr., “7 Nations Back Dual Gold Price, Bar Selling to Private Buyers; Pledge Support of the Dollar,” New York Times, March 18, 1968, http://query.nytimes.com/mem/archive/pdf?res=FA0D14F93E541A7493CAA81788D85F4C8685F9.
Connally’s biographer believed that the assassination enhanced Connally’s reputation: Charles Ashman, Connally: The Adventures of Big Bad John (New York: Morrow, 1974), 15.
Herbert Stein, who knew Connally and saw him in operation: Description of Connally as “forceful, colorful, charming”: Herbert Stein, Presidential Economics: The Making of Economic Policy from Roosevelt to Reagan and Beyond (New York: Simon & Schuster, 1985), 162.
“I can play it round or I can play it flat”: Ibid.
, 163.
One of Nixon’s closest aides: “Connally Awed Nixon, as Haldeman Diaries Tell,” Baltimore Sun, May 20, 1994, http://articles.baltimoresun.com/1994-05-20/news/1994140195_1_connally-nixon-new-party.
Crucial to the success of the two-step plan was secrecy: Stein, Presidential Economics, 166.
Two days later: H. Erich Heinemann, “Speculative Attacks Grow on U.S. Currency Abroad; Nervous Foreign Dealers Sell Dollars as Federal Reserve Bolsters Monetary Defenses with a Swap Deal,” New York Times, August 13, 1971, http://query.nytimes.com/mem/archive/pdf?res=F40C13F9395C1A7493C1A81783D85F458785F9.
An envoy from the Bank of England: Stein, Presidential Economics, 167.
Then Connally took over the meeting: Lewis E. Lehrman, “The Nixon Shock Heard ’Round the World,” Wall Street Journal, August 15, 2011, http://online.wsj.com/article/SB10001424053111904007304576494073418802358.html.
The retreat had had a storied place in American affairs: See for example entry on Camp David at http://www.nps.gov.
Calling the situation a “ferment”: Heinemann, “Speculative Attacks Grow on U.S. Currency Abroad.”
On the brink of dismantling the global financial system, he worried about interrupting the hit TV western Bonanza: Daniel Yergin and Joseph Stanislaw, The Commanding Heights: The Battle Between Government and the Marketplace That Is Remaking the Modern World (New York: Simon & Schuster, 1998), 62.
President Lyndon Johnson had made it policy: Edward Hudson, “Lorne Greene, TV Patriarch, Is Dead,” New York Times, September 12, 1987, http://www.nytimes.com/1987/09/12/arts/lorne-greene-tv-patriarch-is-dead.html.
“The P. was down in his study with the lights off and the fire going”: Yergin and Stanislaw, The Commanding Heights, 63.
One dealer characterized the trading as more like a flea market: “Tailspin in Dollar Sector of Eurobonds Is Severe,” New York Times, August 16, 1971, http://query.nytimes.com/mem/archive/pdf?res=FB0D10FD3D591A7493C4A81783D85F458785F9.
“In the past seven years”: Text of Nixon Shock speech available at the American Presidency Project, University of California, Santa Barbara, http://www.presidency.ucsb.edu/ws/index.php?pid=3115&st=&st1.