18 JANUARY 1975, Page 4

The gold market

Sir: Charles Stahl's column 'Writing on the Wall . Street', for December 28 is much to be commended, for so much of the comment on the 'legalising' of gold in the US has concentrated on the really almost incidental facet. of private ownership.

Mr Stahl is exceptional in having the good will to inform us that this move has more to do with international banking, the IMF, and the gold producers. But there is one question he leaves unanswered. "It was a wise decision,". he says, "to eliminate gold as the pivot of the monetary system and to replace it with Special Drawing Rights." The wisdom is a matter of opinion, it is the decision that counts. This is a decision that is at least five years old, which was only more recently ratified by the US Congess, perhaps unwittingly, and perhaps he could enlighten us on how exactly the gold producers and the Swiss gold pool pulled the proper strings in the US. My evidence is an article called 'The Thrust of History in International Monetary Reform,' by Robert Triffin, which appeared in the April 1969 Foreign Affairs quarterly, and is available as a reprint.

While qualifying his point by downgrading "official intentions and pronouncements" as well as "stubborn resistance to needed reforms," Mr Stahl makes no secret of a long-range plan: "The gradual shift from uncontrolled commodity-moneys and reserves to man-made credit-moneys and reserves, and later on to a conscious orientation toward the latter by national governments and international institutions, is likely to provide.the best clue to future trends. This is the more true as such a shift can be viewed in a broader perspective of the evolutionary process: the persistent endeavours of man to control his physical environment rather than be controlled by it."

It is one of the great problems of modern affairs that we know so little about who really makes the important decisions, long before they reach our legislative bodies, that makes one grateful for more reports on the Swiss Gold Pool, as well as the IMF, OECD, and other important international institutions intent ,on controlling our physical environment.

Peter Sutherland 5 Nelson, Winchester, Mass. 01890