Disagreements between advocates and opponents of a return to the gold standard surfaced at the third meeting of the U.S. Gold Commission yesterday.
Several members of the commission said they could not understand the distinction that Rep. Ron Paul (R-Tex.), an ardent gold advocate, was attempting to make between a "pure" gold standard and one where the price of gold is fixed in dollars. Any gold standard necessarily involves fixing the link between gold and dollars, and this means establishing a dollar price for gold, Paul's opponents said.
Administration officials serving on the commission, including Chairman of the Council of Economic Advisers Murray Weidenbaum and Treasury Secretary Donald T. Regan, have maintained an appearance of neutrality on the issue. But sources do not believe that they are sympathetic to a major monetary reform based on gold.
Federal Reserve Board governors Charles Partee, Henry Wallich and Emmett J. Rice are openly hostile to the notion of returning to the gold standard. Yesterday Partee and Jordan both argued that an imminent return to fixed exchange rates, with gold the numeraire (or measurement) of the international money system, was virtually out of the question.
International financiers do not take seriously the idea of returning to a gold standard, where the supply of money would be determined by the supply of gold, and currenices fixed in relation to gold and thus to each other. However some supply-side supporters of President Reagan have recently argued that this is the only way to fight inflation and bring down interest rates. They have focused attention on the Gold Commission, but seem unlikely to influence it sufficiently to make it produce a sympathetic report.
There are only three members of the commission clearly in favor of a gold standard: businessmen Lewis Lehrman and Arthur Costamagna and Paul, although several other members, including Senators Roger Jepsen (R-Iowa) and Harrison H. Schmitt (R-N.M.) seem sympathetic.
The commission was set up under an act of Congress to consider ways of incorporating gold into the domestic and international money system. It is due to report by March of next year.
The next meetings will be in the form of public hearings on Nov. 12 and 13. The list of witnesses has not been decided yet, but should be released soon, a Treasury spokesman said yesterday.
Yesterday's discussions in the commission focused on a paper by Anna Schwartz, the staff director for the commission, on the international aspects of money standards such as gold and a paper by Robert Weintraub, senior economist on the Joint Economic Committee of Congress, about linking money growth to gold via gold certificates, which Federal Reserve banks would have to hold.