AMERICA ANXIOUS

Hawera Star, Volume LIII, 1 November 1933, Page 5

AMERICA ANXIOUS

AVOIDING MONETARY WAR BRITISH CO-OPERATION SOUGHT. EFFECT OF ROOSEVELT’S PLANS POSSIBILITY of; AGREEMENT (United Press Association —By Electric Telegraph Copyright.) WASHINGTON, Oct. 30. Anxious to avoid an unrestrained monetary war, the Administration sought' an understanding with Britain on the application of President Roosevelt’s plan to steady exchanges and increase prices by buying foreign gold. Sir Frederick Leithaßoss, chief British delegate to the War Debt Conference, interrupted the debt discussions to talk with the governor of the Federal Reserve Bank Board (Mr Black) and the Acting-Secretary of the Treasury (Mr Acheson). While none of the three would disclose what was taking place, most observers regarded it as self-evident that Britain would not sit idly by and watch the dollar , further .depreciated. If an agreement could be reached whereby the two nations could work in co-operation, many economists held that advantages would accrue, though France might be a potential sufferer, possibly to the extent of relaxing her already precarious hold upon the gold standard. Some economists contended, that if Paris abandoned gold the 'world situation would become more conducive to a stabilisation agreement, since all the important nations would be on the same footing. Meanwhile exponents of varied schools of economic thought predicted disappointing results from the President’s new gold purchasing plan. Nevertheless, President Roosevelt s assistants are prepared to make purchases of gold in European markets by Wednesday at the latest. Commodities and stocks reacted on Monday after a rally early in the day

DROP IN THE DOLLAR With the domestic gold price set at 31 dollars 96 cents, against the London price of 31 dollars 40 cents to 31 dollars 52 cents (depending on the quotation of sterling), and with the announcement of ah impending gold purchase at the above price, the dollar dropped as much as 10 cents in exchange transactions, states a cable from New York. It is. 4.88 against sterling hut the domestic markets were not favourably affected. Stocks turned weak in late trading and losses replaced the short-lived flurry of strength. Important issues dropped two to six points and Government bonds weakened in reflection of the uneasiness over the Government’s policy. Commodities also lost all or part of their early advances. President Roosevelt is prepiu’ed to carry the price higher as a means of fortifying his commodity price-raising drive against foreign influences, intentional or unintentional as those influences might he. It was obvious that the objective of President Rioosevelt was to increase through this step, or even to control, the world price of gold. He is apparently convinced that a constant rise in gold prices will stimulate a' similar movement in commodities. His weekend move to bring higher commodity prices through purchases of United States gold alone proved a failure. A London cable states that gold is 1)6 11s 2£d an ounce, compared with £6 10s Id on October 26. Sterling in terms of the dollar is 4.79. The City immediately reacted to President Roosevelt’s policy as an attempt to force the gold bloo to abandon the gold standard! The governor of the Bank of France is believed to he the author of an authoritative article emphasising that Americans attribute the .set-hack to their recovery plans to the maintenance of the gold standard in Europe. The American 'gold-buying developments have exerted little influence on the wheat markets, hut in consequence of the Canadian Government’s rumoured withdrawal of support Manitoba® declined 6d. Australian old crop is more sparingly offered, the Far East preferring to await the American programme of cheap offers from the Pacific Coast. Parcels'are moderately supported.