AMERICAN GOLD PURCHASES

Press, Volume LXIX, Issue 20997, 27 October 1933, Page 11

AMERICAN GOLD PURCHASES

Price Slightly Above European PRESIDENT'S PLANS KEPT SECRET (cx:rao 3-sr.ss association—?.? elbcisic TBLSaP.APH—COI'TBIGHT.) (Received October 26, 5.5 p.m.) WASHINGTON, October 25. Open market purchases of American newly-mined gold were begun to-day at 31.36 dollars an ounce, 22 cents above the London price, which rose five cents from its own opening price to 31.14 dollars. The value of the dollar here thus became 65.91 gold cents or half a cent less than its value in French gold francs. The procedure of the gold purchases was to offer for subscription, in unlimited amounts, 90-day debentures of the Reconstruction Finance Corporation, the subscription to be payable in newly-mined gold. The amount of gold mined in the United States- averages approximately I,QOU,UUO dollars a week. President Roosevelt, who is indisposed, to-day joked with political correspondents, whom lie received in his bedroom, He discussed an infra-red ray lamp which he is using to end a cold, but declined to discuss his financial plans, although the journalists stated that everybody in Wall Street would like to have from him a schedule of his monetary plans for the next 60 days. He said that nobody knew what the Bank of England would do tomorrow, or the Bank of France would do to-day. LONDON PRICE NOT AFFECTED BROKERS SURPRISED AT PROCEDURE DOLLAR DEPRECIATED ("Received October 27, 12.10 a.m.) LONDON, October 26. The financial editor of the "Daily Telegraph" says that bullion brokers keenly awaited the American Treasury's announcement of its intention to buy gold at 31 dollars 36 cents an ounce, or 22 cents above yesterday's London price. What created surprise and some preliminary confusion was the decision to pay for the gold in Reconstruction Finance Corporation debentures, which may be readily cashed. The sale of gold for a marketable security is surely unique in the annals of the mining industry. As the American plan will not draw gold from other markets, it does not create a new free gold market and does not compete with the London price, says the writer. Its practical effect is limited to depreciation of the dollar, as a result of which it is expected that internal commodity prices will rise.

FRENCH COMMENT EXTENSION' OF ACTION FEARED (Received October 26, 10.28 p.m.) PARIS, October 26. Financial circles are puzzled at Mr Roosevelt's decision and express the opinion that as it only concerns America's home production of gold, amounting to only 6 per cent, of the world's output, it will indirectly affect the dollar exchange. If the Reconstruction Finance Cox - - poration begins to buy gold in a world market, protective measures would be necessary. PLACATING THE FARMER EXTENSION OF LOANS ON CROPS R ESTIi ICTION CONDITION ("Received October 27, 12.10 a.m.) WASHINGTON, October 26. In an effor-: to counteract farm strike sentiment in the West, the Agricultural Administration to-day announced the extension of Government crop loans to maize, having the effect of pegging the price at 50 cents a bushel, which is some two cents above to-day's market price. Such loans will only be made in states having certain types of maizestoring laws, but will probably be later extended to other states Similar loans on other crops, notably wheat, are being considered. All loans are contin it on the curtailment of production. BLOW TO MR FORD GOVERNMENT AS BUYER OF MOTORS ( ODE (H ALII'K A'J lON FOR CONTRACTS (Received October 26. 11.55 p.m.) WASHINGTON, October 26. The War Department announced that none but those who had signed codes would be considered when contracts for motor equipment were let. This is interpreted as a direct thrust against Mr Ilenrv Ford, as he is the only major automobile manufacturer who has not signed the code, and normally supplies a large quantity of army motor-cars. The attitude of the department came as something of a surprise, as a recent presidential executive order merely said that all Government contractors would in future be required to live up to code conditions.