NEW GOLD STANDARD

Grey River Argus, 14 October 1936, Page 5

NEW GOLD STANDARD

THROUGH CENTRAL BANKS U.S.A., Britain and France NO INDIVIDUAL TRADING. (Aus. & N.Z Cable Assn.) (Received October 13. at 10.40 p.m.) WASHINGTON, October 12. The Secretary of the L’nited States Treasury, Air Alorgenihau, to-day-, announced a new type of gold standard, as among the United States. Great Britain and France. It is based on .he free exchange of gold among their respective stabilisation funds. This three-Power arrangement, wh ch becomes -effective to-morrow, does not establish fixed ratios for the currencies of the three countries. Gold transactions will not be permitted by individuals. Air Alorgenihau. characterised the new standard as being a second step towards an international stabilisation directly resulting from the “gentlemen’s agreement” reached on September 2Stli. The chief effect would bo to take the power of trading the gold away from the irresponsible speculatorj, and to vest it in the Government, He said other nations were welcome to enter this agreement at any time. The agreement is revocable, unilaterally, at 24 hours’ notice. Its primary purpose would be to protect American business from violent fluctuations on the exchanges. It would have no effect on the domestic value of the dollar. Air Alorgenihau added that no sud* den changes would be planned by tho United States without, consultation with the other Powers.

Gold will be transferable among tho countries through their central banks, namely, the Federal Reserve Bank, New York, as the U.S.A. Treasury’s fiscal agent; the Bank of England, and the Bank of France.

The United States will sell gold at 35 dollars per fine ounce, plus onequarter per cent, for handling charges. REGULATING EXCHANGE. A VERY INTRICATE PROCESS. (Received October 13. at 11.30 p.m.) WASHINGTON, October 12. Air Alorgenihau stated that the ratid as between the dollar, the franc and the pound, will be regulated by the international flow of commerce services; by the cost of bullion in London; by the demand for the dollar, the franc and the pound; and by other intricate factors. It was expected that out of the original Gentlemen’s Agreement, there would arise a compact for international stabilisation, with fixed ratio currencies. Under this pact, he said’, excessive paper balances could be converted into gold for example, if Britain became overstocked with dollar exchange in the United States, she could convert it into gold on application to the Federal Reserve Bank, at New York. Air Alorgenthau declined to say whether the arrangement would mean a reduction in the American gold supply, which was worth 10,979 million dollars on October 9th, Some quarters have anticipated reduct'ons, which would not injure American credit. A DAY-TO-DAY ARRANGEMENT. (Received October 13. at 11.55 p.m.) LONDON, October 13. The Treasuries’ announcement says that gold will be obtainable in the United States, in exchange for dollars, by any country giving reciprocal facilities to the United States. The day-to-day working arrangement should greatly facilitate the technical operations of exchange control. The British Government has arranged for such facilities to be afforded to the United States authorities in London. Similar arrangements have been made with the Bank of France.