DEVALUATION

Otago Daily Times, Issue 22164, 18 January 1934, Page 9

DEVALUATION

THE AMERICAN DOLLAR JAPAN NOT SURPRISED (United Press Association.) (By Electric Telegraph-Copyright.) TOKIO, January 16. The American dollar devaluation is not surprising to financiers here. The Stock Exchange was not affected to-day. The officials are not commenting pending official advices, but it is understood that they have intimated that it may be necessary to devalue the yeu. GOLD PURCHASES ABROAD. THE LAST ON MONDAY. WASHINGTON, January 16. The United States Reconstruction Corporation ceased its gold purchases abroad on Monday. STOCK EXCHANGE DEALINGS. NEW YORK, January 16. (Received Jan. 17, at 5.5 p.m.) Despite much profit takir * on yesterday’s advance Stock Exchange prices forged ahead again to-day, with gains of one to several points on an almost 4,000,000 share turnover. Bonds were also stronger, but commodities turned slightly downward on the strength of the dollar, which, despite the advance of the gold price, gained fractionally against foreign exchanges. THE PRESIDENT’S PROGRAMME. EARLY ENACTMENT LIKELY. WASHINGTON, January 16. (Received Jan. 17, at 8 p.m.) Legislation incorporating President Roosevelts monetary programme seemed assured of early enactment to-day, as Governor Black, of the Federal Reserve Board, expressed approval of the nationalisation of gold, with the profit thereon going to the Government. A Republican Senate caucus failed to agree about opposition to the programme, but it was decided that the legislation shall not be allowed to move with the rapidity that the emergency measures did in the special session. Members of the House, Banking, and Coinage Committees are bickering over which have authority in the matter, nevertheless reasonable t>speed in enacting the measure in the form that President Roosevelt desires is expected. After midnight on "Wednesday gold coin will in effect be repudiated as money. According to Mr Morgenthau’s recent gold order, if such is not turned into the Federal Reserve by then the banks will be authorised to confiscate it on presentation by individuals. Apparently it is to revert to the Government as part payment of the penalty for violation of the gold regulations, which is double the value of the gold held. The almost unanimous support for the President’s programme, with even the most conservative press bailing it as the end to uncertainty, came as a revelation to Administration officials, and they profess to believe that not only is the nation overwhelmingly behind the President," but that the threat of a Congressional inflation revolt has been completely obviated. OPINION IN LONDON. LONDON, January 16. (Received Jan. 17, at 9.30 p.m.) The American currency developments arc being much discussed in London. On the stock markets the tone in most departments is somewhat hesitant. City opinion regarding President Roosevelt’s message to Congress recognises that the measure announced is immediately directed at the American internal situation and time will be required to assess its wider repercussions. PRICE OF GOLD JUMPS. LONDON, January 16. Gold jumped to £6 11s 9d as the result of President Roosevelt’s announcement. It is understood that America bought nearly all the £BOO,OOO in bar gold marketed here. Prices on the Stock Exchange generally advanced, especially gold mine shares, which were in active demand. BOOM IN GOLD SHARES. LONDON; January 17. (Received Jan. 18, at 0.45 a.m.) The effect of President Roosevelt’s decision on gold mining shares was electrical and boom-like conditions prevailed in London and Johannesburg. The unexpectedly large advance in the price of metal helped to send prices soaring. The market wavered later and profit-taking developed. CANADA DISCUSSES POSITION. NEW YORK, January 16. (Received Jan. 17, at 9.30 p.m.) The Ottawa correspondent of the New York Times states that after Mr Bennett had discussed the Roosevelt monetary programme to-day, it was indicated that a Bill will probably be introduced into Parliament during the coming session reducing the gold content of the Canadian dollar. The need for stabilisation has been constantly urged by importers and exporters who do most of their business with the United States. They state it would remove the uncertainty. There is now a strong agitation for a new gold standard of 14 or 15 grains of pure gold, so that the dollar’s nominal value may more closely correspond with its legal value expressed in gold, which is 23.22 troy grains, as provided in the statutes. The adoption of a lower gold content would eventually reduce the burden of all indebtedness payable in Canadian currency and tend to increase prices of commodities in domestic trade. Some groups have been urging the Government to increase the note issue to 100,000,000 dollars. Mr Bennett, however, is known to be standing firm for sound money, believing that such form of inflation would quickly lead Canada into insolvency. A PRIEST’S DECLARATION. “ROOSEVELT OR RUIN.” WASHINGTON, January 16, (Received Jan. 17, at 10 p.m.) The Rev. Charles Coughlin, a Catholic priest whose Socialist rally included radio broadcasts, have gained him a wide following, to-day informed the House Coinage, Weights, and Measures Committee that “ if Congress fails to carry through the President’s suggestions I foresee a revolution greater than the French revolution. It is either Roosevelt or ruin.” The committee, which is receiving recommendations for possible monetary legislation, also heard Mr Frank Variderlip express approval of President Roosevelt’s gold proposals. He suggested the creation of a new branch of the Treasury for the purpose of handling all monetary matters now under the jurisdiction of other divisions. Senators M‘Adoo and Glass, both former Secretaries for the Treasury

under President Wilson, to-day questioned the constitutionality of President Roosevelt’s proposal to seize the Reserve Bank gold and demanded a written opinion from the Attorney-general. , FOREIGN REACTION AWAITED. NEW YORK, January 16. (Received Jan. 17, at 10 p.m.) The Washington correspondent of the New York Times says that the reaction of foreign nations, particularly Britain and France, to the Roosevelt monetary programme is awaited in high official circles with deep interest. Those who are eager that anything approaching an international currency and trade war may Ire avoided arc hopeful that developments will soon make possible do facto stabilisation in concert with Britain. They point out that if the United States and Britain could reach an agreement which would ultimately lead to final devaluation by both nations after a test period on basis acceptable to President Roosevelt, it would be possible to control the vast majority of the exchange transactions. An unofficial interchange of opinion between the Bank of England and the Federal Reserve Bank of New York is regarded as a probable outcome of the gold message. President Roosevelt has made it clear that he hopes, for international agreement, but has indicated that up to the present this has not been found possible.