Overload

That didn’t work. The dollar continues to sink like the setting sun, worth less and less in terms of real value because the U.S. has paid (and goes on paying) far more for imported oil than it earns from exports.

And, as more dollars departed for Saudi Arabia, Iran and elsewhere, more were printed by the U. S. Treasury-depleting the dollar’s value even further.

After that we witnessed some interim experiments payment for oil through a "basket of currencies" was one. (That’s a highfalutin name for a mixture including deutschemarks, guilders, French and Swiss francs, pounds sterling, yen and dollars.) But that, too, proved ineffective because the ailing dollar and pound tipped the basket downward.

Finally, the oil nations demanded payment in the only money which, in this world’s long history, has never failed to keep its value-gold.

The United States refused. It still does. (Of course you can see the Treasury’s viewpoint. The U.S. doesn’t have that much gold left, having squandered enormous amounts in futile attempts to "demonetize" gold. In fact, there’s only sufficient in Fort Knox and the Fed Reserve banks to pay one year’s oil bill with a bit left over.)

Instead the U. S. Treasury, which for more than a decade has relied on printing-press money-backed by nothing-to pay its way, has offered to run the presses faster and produce more paper dollars.

But this time the oil nations have been adamant. They have said, in effect, "If we want paper money we can print our own -without giving away our oil to get it." And, like the mythical Chinese laundryman who insisted, "No tickee, no washee," they now threaten: "No gold, no oil."

So, it seems, an impasse is imminent.

True, the oil has not stopped flowing-yet! Equally true: It could be a year or more before it does.

Meanwhile, discussions between governments are continuing, so a compromise is possible.

We’ll wait and see.

The general uncertainty about oil was an ominous, overhanging cloud for GSP & L because nearly half of the company’s generating capacity was dependent on oil fuel, the bulk of it imported.

Natural gas, which used to be available to generate electricity, was already in short supply.

Thus, the prospect of an oil, gas and water shortage simultaneously was something which Eric Humphrey, Nim, and other executives preferred not to think about-and shuddered when they did.

* * *

"Is there any chance, do you think," Eric Humphrey asked Paul Sherman Yale, "of the Governor’s changing his mind and coming out with an endorsement of our Tunipah plans? After all, with an ongoing oil and gas crisis, what stronger argument is there for a coal-burning plant?"

Mr. Justice Yale had joined Humphrey and Nim shortly after Nim’s report on theft of service. The previous day, GSP & L’s new and distinguished spokesman had been in Sacramento at the state capitol.

“The Governor acknowledges that argument," Yale said, "and he’s vacillating. I saw him yesterday and urged him to make a pro-Tunipah statement. I’d say the chances are sixty-forty that he will."

"I’m pleased to bear it." Humphrey noticeably brightened and Nim thought: Once more the chairman’s wisdom in hiring Paul Yale was being demonstrated.

Yale seemed able to walk into the Governor’s office without advance notice whenever he chose and the same was true of his access to senior legislators.

"I can tell you, gentlemen," Yale said, "that there’s plenty of worrying in Sacramento about oil. ‘nose I talked with yesterday, including the Governor, see gasoline rationing as inevitable soon, whether the present crisis is settled or not."

"Personally," Humphrey said, "I’d consider that a good thing. The way North Americans have used cars, especially big cars, squandering gasoline as if there were no tomorrow, has been gross and disgusting. The Europeans-rightly so-believe we’re irresponsible."

Nim resisted an impulse to remind the chairman about his own big car.

Instead, be told Yale, "I hope Sacramento realizes that producing electricity is a much more economical use of oil than in an automobile."

Paul Sherman Yale smiled. "I assure you I lose no opportunity public and private-to make that clear."

Nim remembered that Yale had made that point publicly a week ago. It was on a TV program, meet the State Press, where, considering 2the short time since his appointment, the former Associate justice showed himself adroitly knowledgeable about GSP&L affairs. Watching the show at home, Nim had again felt regret at not being the utility’s policy spokesman anymore. But honesty made him admit that Yale did the job superbly.

"I assume," Paul Yale said, "that Golden State Power still includes nuclear generating plants on its future shopping list."

"Officially, yes," Nim answered. "We have two nuclear plants under construction-got them licensed just before nuclear licensing became a practical impossibility. Also, we’ve applied for two more nuclear construction permits, but the application is getting nowhere. So unofficially." He shrugged.

“The fact is," Eric Humphrey added, "the likelihood of more nuclear plants being approved for California becomes increasingly remote. The only sure thing is that the nuclear debate-pro and con-will go on and on with nothing resolved. We can’t wait."

Eric Humphrey’s mind had swung back to their earlier discussion about oil. "I sometimes think if I were an Arab I’d refuse paper dollars for my oil and demand gold, or at least a gold-backed currency. I wonder if the United States will give in and use some of our gold, even though it would not last long."

"Do we even have as much gold as we’re supposed to?" Nim asked. “There seems some doubt about it."

Humphrey looked surprised. Mr. Justice Yale didn’t; a soft smile played around his lips.

"I subscribe to a financial newsletter-the International Harry Schultz Letter," Nim said. “There are often things in there which prove to be true but newspapers don’t seem to want to publish. Schultz has been writing about two men-a Washington lawyer, Dr. Peter Beter, who used to be counsel for the United States Export-Import Bank, and Edward Durell, an American industrialist. Both are shouting ‘fraud’ about Fort Knox gold, claiming there may be a lot less there that the world believes."

Paul Sherman Yale nodded. "Quite a few in Washington have heard of both men, but not many will admit it. Incidentally, I subscribe to Schultz’s letter too."

"What Beter and Durell argue," Nim explained to Humphrey, "is that Fort Knox gold hasn’t been audited properly since 1953. They also claim that most of the remaining gold is impure-from melted-down coins containing silver, copper and antimony, which President Roosevelt called in when gold ownership for Americans was made illegal. That alone would mark the gold holdings down by twenty percent, possibly more."

"I’ve not beard that before," Humphrey said. "It’s interesting."

Nim went on, “There’s more. It’s believed that in the 1960 dollar crisis a whole lot of U.S. gold was used to support the dollar, with the intention it would be replaced. It never was."

"In that case," Humphrey asked, "why keep it a secret?"

Paul Yale interjected, "That’s easy to answer. If the rest of the world believed the United States doesn’t have the gold it claims to, there would be a fresh run on the dollar-panic selling." He added thoughtfully, "I’ve heard rumors in Washington about that missing gold. They say every new Treasury Secretary is sworn to secrecy, then told the facts. One thing is clear: the government won’t permit an independent audit of Fort Knox gold." He shrugged. "I have no means of knowing if any of what Beter and Durell claim is true. But stranger things have happened, especially in Washington."

Eric Humphrey sighed. “There are days," he told Yale, "when I find myself wishing my assistant were less well informed, that be read less widely, and once in a while reined in that searching mind of his. As if I didn’t have enough to worry about-Tunipah, coal, water, gas, oilnow he’s added gold."

9

In the chairman’s mahogany-paneled office in the Sequoia Club’s Cable Hill headquarters, Laura Bo Carmichael hesitated, her pen poised over a check in front of her. It was for twenty-five thousand dollars.

The check was drawn on the club’s special projects account. It was payable to: power & light for people.

The money would be the second installment of the total-fifty thousand dollars-pledged to Davey Birdsong’s organization last August, five months ago. The first payment had been made immediately following the confidential agreement between the Sequoia Club and p&lfp. Now the second half was due.