FOREIGN GOLD.

Auckland Star, Volume LXIV, Issue 256, 30 October 1933, Page 7

FOREIGN GOLD.

AMERICAN PURCHASE. Another Step in Roosevelt Monetary Policy. STABILISATION- THE AIM? (United P.A.—Electric Telegraph—Copyright) (Received 2 p.m.) WASHINGTON, October 29. It was announced by the White House that the Government will make purchases of gold abroad as a second step in Mr. Roosevelt's recently indicated financial policy.

The gold purchases will be made through units to be set up by the Reconstruction Finance Corporation, for which the Federal Reserve will act as agent abroad. It is intimated that the first purchases will not be large and that a monetary war with other nations will not be invited. It is indicated that the Government will consult the Bank of England and that American buying on the London market will not be objectionable to the British Government. The White House declined to explain the ultimate objective of the step. It is believed it will lead up to stabilisation, both of the dollar and the pound at a level acceptable to both Governments. At the end of the first week of Mr. Roosevelt's gold policy the local financial community is more than ever convinced that the mere announcement of the newly-mined gold buying policy will not serve to control the course of the dollar on the foreign exchange «niarket nor affect materially domestic prices. Yesterday the price of gold was fixed at 31.82 dollars an ounce, an increase of six cents, or 1.25 dollars over the London price which was down. However, the domestic markets sagged and Stock Exchange prices were down fractionally in almost stagnant trading, all speculative interest apparently having been withdrawn pending the further step in regard to gold which "•Mr. Roosevelt outlined in his broadcast speech. It was felt that the Government soon will be compelled to undertake the purchase of gold abroad, but this is regarded as dangerous and likely to cause foreign retaliation.

AMERICAN OFFICIALS.

Reports of Recovery Results Conflict., N.R.A. AND FEDERAL RESERVE. (Received 2 p.m.) WASHINGTON, October 29. A sharp difference of opinion over the interpretation and results of the recovery programme has developed within the administration. The Federal Reserve Board issued its monthly statement, which stated that business activity had slowed down in the past two months in those industries in which agricultural processing taxes or N.R.A. codes had become effective recently. The chief administrator of the N.R.A., General Johnson, and the Secretary of Agriculture, Mr. H. A. Wallace, immediately issued strong protests. The former insisted that every report from the major industries, excepting the steel industry, showed a definite upward trend. Mr. Wallace said the apparent slowing down in farm industries was due to the farmers' efforts to anticipate the processing levies, and thereby beat the tax. He explained that they had purchased large quantities ' of material before the taxes became effective and had been operating on surpluses since. Mr. Roosevelt's plan to stimulate the steel industry (in which activity continues sharply to decline) by Govern-ment-financed purchases of rails for use on the nation's major railway systems, was again brought .forward yesterday as the President charged four of the leading steel corporations with collusion in bidding for contracts. The Public Works Administration "took a vital step yesterday when it announced that 20*0,000,000 dollars had been allocated to the new Government corporation to engage directly in the construction of model homes in place of tenements' on congested city sections. An eminent domain administrator said: "We cannot depend upon private enterprise to initiate a comprehensive scheme of housing and slum clearince at a low cost." The higher and better standard of living for the people of the United States will be one of the achievements of the Federal expenditures on public works relief programmes, for which 3,300,000,000 dollars have been appropriated, and 2f.5,000,000 dollars for non-Federal \projects had been already allotted, the So-jre-ary for the Interior, Mr. Ickes, stated to-night. He pointed out that, besides millions spent on waterworks, bridges, roads, hospitals, power plants, flood control, etc., hundreds of allowances were being made, some as small as a few hundred dollars, for permanent improvements even to cross roads ami villages.

DEFINITE BOYCOTT.

Official Action Against Ford In America. LAW SUIT PENDING? WASHINGTON, October 29. -President Roosevelt definitely projected a boycott against Mr. Henry Ford yesterday when he let it be known that, barring a contrary legal decision by the Attorney-General, Mr. Ford will not be eligible to receive Government contracts. The Secretary of the Interior, Mr. Harold Ickes, whose Department is the largest Government purchaser of motor equipment, announced that no more Ford vehicles will be purchased. The chief administrator of the N.K.A., General Johnson, again threatened to institute legal action against Mr. Ford. He said any clear-cut violation of the code by Mr. Ford would be communicated to the Department of Justice. As a personal gesture against Mr. Ford General Johnson announced that he is disposing of his Lincoln motor ear, of i Ford make, and replacing ifc with a [General Motors product.