Federal commission pans idea to link gold and US dollar
The report of the US Gold Commission, riddled with dissenting views, reflects the strong passions raised by discussion of the gold standard.
Released March 31, the report recommends against relinking the dollar to gold. But it suggests Congress consider a gold coin, exempt from capital gains taxes to sell to investors, but not for use as legal tender.
Discussion on these and other key points was ''lively,'' in the words of chairman Donald Regan, Secretary of the Treasury.
''Is this the report?'' said Secretary Regan, holding up a blue text about the size of the Manhattan phone book. ''No. These are the minority views. This is the report,'' he said, holding up a much thinner volume.
As expected, the majority of the Gold Commission did not vote in favor of a return to any kind of gold standard. It did recommend that Congress and the Federal Reserve study the merits of some type of fixed rule to more tightly control growth in the money supply.
This recommendation drew fire from commission members on both sides of the issue. Gold bugs such as Rep. Ron Paul (R) of Texas and businessman Lewis Lehrman stumped for a return to the gold standard, preferably by defining the dollar in terms of the yellow metal. Federal Reserve governor Henry Wallich, on the other hand, charged the commission had no business veering away from discussion of gold and voting for study of a vague issue such as a monetary ''fixed rule.''
But Reps. Henry Reuss (D) of Wisconsin and Chalmers Wylie (R) of Ohio reserved their strongest objections for the proposed gold coin.
''Without legal tender status, the 'coin' is really a medallion, and we already have a program to produce those,'' they said.
They also complained that tacking a tax exemption onto the coin would make it a highly sought speculative asset, draining cash from more productive investments such as stock and machinery.
A majority of the House Banking Committee, which must approve the new coin, opposes it.