PURCHASES OF GOLD THE AMERICAN PLAN FOREIGN MARKETS INCLUDED.

Otago Daily Times, Issue 22098, 31 October 1933, Page 9

PURCHASES OF GOLD

THE AMERICAN PLAN

FOREIGN MARKETS INCLUDED.

WASHINGTON, October 29. (Received Oct. 30, at 5.5 p.m.) It is intimated that the first purchases of gold abroad will not be large, and that a monetary war with other countries will not be invited. It is indicated that the Government will consult the Bank of England, and that American buying in the London market will not be objectionable to the British Government. White House declined to explain the ultimate objective of the step, but it is their belief that it will lead up to the stabilisation of, both the dollar and the pound at a level acceptable to both Governments.

PRESIDENT’S LATEST MOVE,

THE POSITION CONFUSED.

WASHINGTON, October 29. (Received Oct. 30, at 11 p.m.)

Opinion concerning the meaning of the intent of President Roosevelt’s second step is as much confused to-night as over the previous step a week ago. Demands are being made on all sides that the President should clarify the position. Democratic politicians, such as Senator Thomas, said the step would be tantamount to selling dollars and would have the desired effect.

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

Some commentators, principally economists, envisaged the gravest sort of consequences if the American purchase of gold abroad was not linked with international understandings, predicting either gold embargoes, an Anglo-French bloc, the forcing of France to devaluate her own currency, or wholesale demoralisation of foreign exchange, etc. The most pessimistic and unsupported comment was that the President would possibly use the event, if the purchases fail of their effect, to justify direct currency inflation. INTERNATIONAL CURRENCY. THREE-CORNERED CONTEST. NEW YORK, October 29. (Received Oct. 30, at 11.30 p.m.) A switch from passive to aggressive control of the value of the dollar is seen by monetary experts in President Roosevelt’s gold announcement, and the possibility of a three-cornered international contest in the world monetary markets among Britain, France and the United States is noted by some observers. Some quarters feel that an international currency contest would quickly end free gold markets in any important country and bring world-wide restrictions in currency dealings which would mean the end of the international gold standard, as had previously existed, with chaotic international monetary conditions likely to result. THE PROBABLE MARKETS. WASHINGTON, October 29. (Received Oct, 30, at 11.55 p.m.) There are intimations that purchases would not alone be made in London, but also in Paris and Amsterdam, and there is even a possibility. that the activities may be extended to Canada if a Governmental agreement is possible, in view of Canadian licensing. Experts here who described as futile the efforts to cheapen the dollar by the purchase of domestic gold, agr.ee that purchases abroad will have the desired effect, provided other nations take no offsetting action.