Purchase of Gold

Manawatu Times, Volume LIV, Issue 7298, 27 October 1933, Page 7

Purchase of Gold

New Roosevelt Policy

PRICE ABOVE LONDON PARITY

United Press Association—By Electric Telegraph—Copyright. WASHINGTON, Oct. 25. President Roosevelt's gold-buying policy was inaugurated on Wednesday, tho Government paying 31 dollars 36 cents au ounce. The open market purchases of American gold began at 22 cents above the London price, which rose live cents from its own opening price to 31 dollars 14 cents. Tho value of the dollar here thus became 65.91 cents in gold, or half a cent less than its value in French gold francs. The procedure of tlic gold purchases was the offer for subscriptions in unlimited amounts to 90 days of debentures of tho Reconstruction Financo Corporation, the subscription to be payable in newly-mined gold. The amount of gold mined in the United States averages approximately a million dollars a week. President Roosevelt, who was indisposed to-day, joked with the political correspondents, a committee of whom lie received in his bedroom, and discussed the infra red ray lamp which ho is using to end his cold, but ho declined to discuss his financial plans, although the journalists pointed out that everybody in Wall Street would like to have from him a sehcdulo of his monetary plans for the next 60 days. Ho said: “Nobody knows what the Bank of England will do to-morrow or the Bank of France will do to-day.” Gold Sold for Marketable Securities UNIQUE IN ANNALS OF MINING INDUSTRY. Received Friday, 10.30 p.m. LONDON, Oct. 26. Tho Daily Telegraph’s financial editor says: “Bullion-brokers keenly awaited the American Treasury’s announcement of its intention to buy gold at 31 dollars 36 cents an ounce or 22 cents above yesterday’s London price. What created surprise and some preliminary confusion was the decision to pay for tho gold in Reconstruction Corporation debentures, which. are readily cashable. The sale of gold for a marketable security is surely unique in the annals of tho mining industry. ‘ ‘ As the American plan will not draw gold from other markets, it does not create a new and free gold market and docs not competo with the London price. Its practical effect is limited to the depreciation of the dollar, as a result of which it is expected that internal commodity prices will rise.” France Will Need Protective Measures IF GOLD BOUGHT IN WORLD MARKET. Received Thursday, 10.30 p.m. PARIS, Oct. 26. Financial circles are puzzled at Mr Roosevelt’s decision, and express the opinion that, as it only concerns America’s home production of gold, amountto only 6 per cent, of the -world’s output, it will only directly affect the dollar exchange. If the Finance Corporation begins to buy gold in the world market, protective measures will be necessary.