A MANAGED CURRENCY

Otago Daily Times, Issue 22099, 1 November 1933, Page 7

A MANAGED CURRENCY

THE AMERICAN PROGRAMME PURCHASES OF GOLD; ABROAD (United Press Association.) (By Electric Telegraph—Copyright.) NEW YORK, October 30. With -the domestic gold price set at 31.86 against the London price (31.40 to 31.52, depending on the quotation of sterling), and with the announcement of impendirig gold purchases abroad, the dollar dropped as much as 10 cents in exchange transactions to 4.82 against sterling. The domestic markets were not favourably affected. Stocks turned weak in the late trading, and losses replaced the early gains on a short-lived flurry of strength. Important issues dropped from two to six points, and Government bonds weakened, reflecting the uneasiness over the Government’s policy. Commodities also lost all or part of their early advances, RAISING COMMODITY PRICES, WASHINGTON, October 30. The United States Government on Monday raised the, price of gold to 31 dollars 96 cents—47 cents above the day’s quotations on the world markets. President Roosevelt is prepared to carry the price higher, S as a means of fortifying commodity prices and raising the drive against foreign influences, intentional or unintentional as those influences might be. It was the obvious objective of President Roosevelt 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 would stimulate a similar movement in commodities. His week-old move to bring higher commodity prices through the purchases of United States gold alone proved a failure. OPINION IN FRANCE. PARIS. October 30. Financial circles regard President 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 their recovery plans to the maintenance of the gold standard in Europe. DOLLAR FALLS SHARPLY. ) LONDON, October 30. _ The city immediately reacted to President Roosevelt’s declaration. The dollar fell sharply. Gold shares, including Australians, advanced. AVOIDING A MONETARY WAR. WASHINGTON, October 30. (Received Oct. 31, at 8 p.m.) _ Anxious to avoid an unrestrained monetary war, the Administration sought an understanding with Britain on the application of President Roosevelt’s plan tp steady exchanges and increase prices by buying foreign gold. Sir Frederick Leith-Ross interrupted the War Debt Conference to talk with Governer Black, of the Federal Reserve Bank Board, and the Acting Secretary of the Treasury, Mr Acheson. Meanwhile, exponents of the varied schools of economic thought have predicted disappointing results from the President’s new gold purchasing plan. Nevertheless, ‘President Roosevelt’s assistants are prepared to make purchases in European markets by Wednesday at the latest. THE GOLD STANDARD. FRANCE’S PRECARIOUS HOLD. WASHINGTON, October 30. (Received Oct. 31, at 11.15 p.m.) Most observers regard, 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 hold 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 econo--'mists contend that if Paris abandoned gold the world situation would be more conducive to a stabilisation agreement, since all the important nations would be on the same footing. Meanwhile commodities and stocks reacted on Monday after a rally early in the day.