U.S.A.’s GOLD-BUYING

Greymouth Evening Star, 31 October 1933, Page 5

U.S.A.’s GOLD-BUYING

POLICY PUZZLES NATION

PRICE WAR FEARED

[BY CABLE —PRESS ASSX. —COPYRIGHT.]

WASHINGTON, October 2!).

In connection with the overseas gold buying policy of the Government, opinion concerning the meaning and intent of President Roosevelt’s second step was as much confused to-night as it was over the previous step taken a week ago. Demands were made on all sides that the President should clarify the position. Democratic. Party politicians, such as Senator Thomas, said that this step would be tantamount to selling dollars, and that it would have the desired effect.

Senator Fess declared that the cheapening of the dollar abroad will probably permit foreign purchases of American goods at much reduced prices in teh terms of foreign currencies, but it would not raise the domestic prices of goods.

Some commentators, principally economists, have envisaged the grayest sort of consequences if the American purchases of gold abroad were not linked with international understanding. These commentators predicted that without understandings, there would be either gold embargoes, or an Anglo-French bloc, or the forcing of France to devaluate her own currency, or the wholesale demoralisation of foriegn exchanges, etc. The most pessimistic, as it. was the least supported, comment, was that the President, possibly would use tho event, if the purchases fail to have effect ,to justify direct currency inflation.

Regarding gold buying abroad by the Government, there are intimations that the purchases would not alone be made in London, but also in Paris, and in Amsterdam, and there is even the possibility that the buying activities may be extended to Canada, if a Government agreement is possible, in view of the Canadian licensing of gold buying. Those experts here who have described as futile the efforts of the Administration to' cheapen the dollar by the purchase of America’s domestic gold, agree that. the purchase of gold abroad would have the desired effect, provided that the other nations take no offsetting action.

WALL STREET’S OPINION.

NEW YORK, October 29

A switch over from a passive to an aggressive control of the value of the dollar is seen by monetary experts in President Roosevelt’s gold announcement. The possibility of a threecornered international contest in the world monetary markets, among Britain, France and the United States, is noted by some observers. . Some quarters feel that the international currency contest will quickly end the free gold markets in any important country, and will bring abou„ world-wide restrictions on currency dealings, which would mean the end of the international gold standard as it had previously existed, with chaotic international monetary conditions likely to result.

PRICE FURTHER RAISED.

(Recd. October 31, 9.30 a.m.) WASHINGTON, October 30

The United' States Government today raised the price of gold to thirtyone dollars ninety-six cents, fortyseven cents above to-day’s quotations on the world’s markets. Mr Roosevelt is prepared to carry the price higher as a means of fortifying the commodity price-raising drive against foreign influences, intentional or jinintentional, as those influences might be. It was the obvious objective of Mr Roosevelt to increase, through this step, or even to control, the world price of gold. He is apparently convinced that the constant, rise in gold prices would stimulate a similar movement in commodities, which his week-old move to bring higher commodity prices through the purchases of United States gold' alone, proved a failure.

GOLD SHARES ADVANCE

LONDON, October 30

The city immediately reacted on Mr. Roosevelt’s declaration. The dollar fell sharply, and gold shares, including Australians, advanced.

FRENCH OPINION.

PARIS, October 30

Financial circles regard, Mr. Roosevelt’s policy as an attempt to force the gold bloc to abandon the gold standard.

The Governor of the Bank of France is believed to be the author of an authoritative article emphasising that Americans attribute the setback to the recovery plans to the maintenance of the gold standard in Europe.