My grandson had quite a day at school.  He had learned that the economy had been suffering from things called Panics, capital P, during the 19th century and had another big one in the early 20th century.  He had been told that responsible, public-spirited men like J. P. Morgan had organized a central bank to prevent those Panics.  He and other bankers finally got the government to go along with their idea and pass it into law in late 1913.  And wouldn't you know it — we've had no more Panics since then.

He looked doubtful, though.  He didn't understand what a central bank did, exactly.  And wasn't the Depression and the recent Financial Crisis kind of like a Panic, only called a different name?  And if those calamities were like Panics, then why didn't the federal reserve prevent them?

His teacher said that this country and most countries of the western world were on a gold standard during the days of Panics.  Economists and other people decided that the real culprit behind the turmoil was the gold we used as money.  So we got rid of gold for the stuff we use today . . . which doesn't come out of the ground . . . which comes from the government but is regulated by the people in charge of the federal reserve, which is not really part of the government, though they're close friends.

"Ok," he said, "so we have gold causing us and other countries all those Panics and we got rid of it.  But we didn't get rid of it."  He said his teacher told the class about the vault at the Federal Reserve Bank of New York, which houses gold for other countries.  The vault is 80 feet below street level and 50 feet below sea level.  He found that astounding.  The vault is protected by armed guards, CCTV, and electronic surveillance.  And the guards are trained marksmen.

Then his teacher pulled out his tablet and read this to the class, which my grandson read to me from his smartphone:

There are no doors into the gold vault. Entry is through a narrow ten-foot passageway cut in a delicately balanced, nine-feet-tall, 90-ton steel cylinder that revolves vertically in a 140-ton, steel-and-concrete frame. The vault is opened and closed by rotating the cylinder 90 degrees. An airtight and watertight seal is achieved by lowering the slightly tapered cylinder three-eighths of an inch into the frame, which is similar to pushing a cork down into a bottle. The cylinder is secured in place when two levers insert large bolts, four recessed in each side of the frame, into the cylinder. By unlocking a series of time and combination locks, Bank personnel can open the vault the next business day. The locks are under "multiple control" no one individual has all the combinations necessary to open the vault.

He found this even more astounding.  "Why?" he wanted to know, "Why all the protection for something that's worthless?  Why even keep it around, except maybe for rings and other jewelry?"

As I started to answer he interrupted me.

"That bank stores the gold of other countries.  Fort Knox vaults the gold Americans once had.  And it's a piece of work, too."

He told me the depository was on an army base, and the building that housed the vault was made of North Carolina granite.  When the government ordered Americans to turn in their gold coins they melted it down into bars and shipped them by rail to the depository under heavy guard.