CHINESE MONEY PROBLEMS

Press, Volume LXXII, Issue 21708, 15 February 1936, Page 15

CHINESE MONEY PROBLEMS

American Treasury’s Interest :

RECENT GOLD TRANSFER DISCUSSED

(UNITED PRESS ASSOCIATION—COPTEIOBT.J (Received February 14, 8.33 p.m.) WASHINGTON, February 14. Some details of the United States gold transaction with China were revealed. by Mr Henry 'Morgenthau, jun. (Secretary of the Treasury), today. Mr Morgenthau said that some months ago the Treasury purchased 50,000,000 ‘ounces of silver from the Nanking Government. Part of it was paid for in gold. The price was- not disclosed, but it was understood that it was 65 cents an ounce; giving China credit of 32.500.000 dollars. “It was noted in financial circles here,” he said, “that if such was the case China* had made a neat profit of 10,00(1,000 dollars; for on November 5 China suspended the silver standard, and during the ensuing panic the price of the metal dropped to 45 cents.” In any event, the Treasury appears to have takqn an active interest in' ‘helping China in her monetary problems. Mr Morgenthau to-day publicly praised Chinese officials for the management of their currency stabilisation fund, America’s silver stocks now aggregate 1,642,000,000 ounces, valued at 2,118,000,000 dollars on the statutory value of 129 cents an ounce, compared with gold stocks amounting to some 10,154,000,000—-the proportion of silver to gold being 21.8 per cent. Officials estimate that about 908,000,000 more ounces of silver must be acquired to reach the 33 1-3 per cent, required by the Silver Purchase Act—assuming, of course, that no appreciable amounts of gold are exported. £On February 11 the United States Treasury Department revealed that 9.970.000 dollars in gold had been earmarked for China; but the department refused'.to give details or to explain the significance of the unusual transaction. It was understood, however, that the gold would serve to pay for the quantities of silver bought from China under the Government’s purchasing programme.!