U.S.A. GOLD POLICY

Greymouth Evening Star, 28 October 1933, Page 7

U.S.A. GOLD POLICY

BONUS TO PRODUCERS [BRITISH OFFICIAL WIRELESS.] RUGBY, October 27. “The Times’s” City Editor, commenting on the American Government’s new gold policy, says: “So long as the American purchases of gold at the prices stated by the Reconstruction Finance Corporation are confined to the gold newly mined in the United States, the market expects that the American price fixation will have little if any, effect on the world price of gold, even through the American price may, at times, be above the London price- for, in that event, the Government would simply be paying a bonus to the gold producers. It is unlikely that the American Government would sell gold, although it has the power to do so, since such selling would have the effect of increasing the demand for dollars. That would cause an appreciation in their gold value, which, apparently, is what the dent desired above all to avoid.

THE FIRST RESULTS. WASHINGTON, October 26. The price of newly mined gold was raised to 31.54 dollars an ounce, eighteen cents above the first Treasury quotation yesterday, and approximately fifty cents above the world price in London, where it had fallen since yesterday. The administration further announced an intention to maintain steadily a higher price for gold than is available elsewhere, and there is unlikely to be any decrease in price unless speculative markets show a tendency to “run away. No 'gold actually changed hands and it is more strongly indicated that the purchase policy is only a device to devalue the dollar, yet the device did not work smoothly, to-day, the dollar rising to 66.91. cents against the franc, which is approximately lu cents higher than the Treasury gold figure would make it. The gold pui chase plan also had the effect. of minimising dollar fluctuation against foreign exchange, the pound sterling foi instance being quoted at 473 a, or approximately what it was yesterday. The gold plan, likewise, failed to continue to buoy up the domestic markets as it had done since the first an-no/mcen-cm Leading stock at New York lost one to four points, gold shares dipping with the rest of the 'list Wheat was off about two cents at Chicago, other commodities also reflecting a recession.