AMERICAN GOLD

Poverty Bay Herald, Volume LX, Issue 18068, 20 April 1933, Page 7

AMERICAN GOLD

EMBARGO RESTORED RAISING PRICE LEVELS OTHER STEPS IN PROSPECT (Elec. Tel. Copyright—United Press Assn.) (Received April 20, 11 a.m.) WASHINGTON, April 19. The. President, Mr. Franklin Roosevelt, announced to-day the restoration of the gold embargo as a move to improve domestic commodity prices.

The restoration is to be effective immediately. This is the first step in the campaign tho President has undertaken to establish a controlled price level and controlled credit to counteract deflation. Additional steps are in prospect, but their extent will not be determined until the effect of to-day’s move is known. Mr. Roosevelt has apparently won a respite from the leaders in Congress who have been hammering for outright currency inflation. 11c wants the juice level raised in such a manner that it will be under control at all times, and not permitted to go too high. The forthcoming international economic discussions are part of the general manoeuvres to restore the United States to a normal basis of available cash, jobs and credit. The President hopes to get the world back on the gold standard. This standard may be on a different gold ratio with respect to currency than in the past, but he is adamant for the Stabilisation of the world monetary situation. STERLING STILL RISING The giving up of the attempt further to support the American dollar in foreign exchange is regarded as serving tho dual .purpose of increasing American commodity prices and putting the President iu a strategical position for the economic bargainings. Just how the gold embargo reacts to raise American commodity prices is somewhat involved. It was explained that cotton, for''instance, is sold on a gold basis. On the present basis, the rate is about six cents per lb. Should the price of gold fall by 10 per cent, a resultant increase in the price of cotton of 10 per cent, is regarded as inevitable. The public works programme is also contemplated by the President to stimulate employment, but it is likely that the plan will not be anywhere near the £800.000,000 or £1,000,000,000 advocated in some quarters. British currencies continued to climb steadily upward in tho New York foreign exchange this morning. The jiound opened with an overnight jump to 355? cents, a gain of 4} cents, and ■by noon had sky-rocketed to 360 cents. The Canadian dollar advanced | cents overnight to 85 cents. ALL MARKETS RESPOND Foreign exchange shot up spectacularly in terms of the American dollars. Sterling was quoted in mid-afternoon at 381 cents for cables, the highest quotation since April, 1931. With exchange dealings rigidly controlled by the Federal Reserve Bank, the market was de scribed as thin and uncertain.

Stock and commodity markets in the United States leaped forward to-day. On the New York Exchange prices surged by one to more than three dollars per share. Silver futures had the most spectacular rise in the history of trading in New York, with gains of three cents an o/,. Cotton rose a dollar a hale.

At Chicago, a wild upsurge in grains in early trading to-day followed the talk of inflation. September delivery wheat registered a maximum advance of 2’ cents a bushel to 68} cents. All deliveries of wheat reached new high levels for tho season, the gains ranging from 1} to 2}. cents, Among bullish items were the announcement of the disposal of May futures, cabled yesterday, and tho British embargo on Russian products. CLOSING QUOTATIONS. A let-up in buying support in the final minutes resulted in wheat fixtures at Winnipeg skidding sharply at the close, easing rapidly from the earlier three cents advances to finish 1* cents above the previous close, May at 54S cents; July, 55£ cents- October, 571 cents.

At Chicago, in a buying stampede rarely paralleled except in war-time, wheat shot almost five cents upward, reaching 70 cents at one time for September delivery. Profit-taking shaved the lug'll points at, the close, when prices were 1J to 24 cents above yesterday’s finish, May at 65 to 65J cents; July, 65J to 66J cents; September, 07j to 67fi cents.

.On the New York exchange, sterling closed at 378 cents, and the Canadian lollar at. 80£ cents, 2| cents higher. Traders isaid the sterling rate was only nominal, the wildest fluctuations ocurriug after the London market closed.

The stock market soared from one o 11 points before meeting profitfaking in late trading.- Cotton rose 250 cents a bale in New York, while silver, rubber, cocoa, and several lessei staple products rallied sharply. Speculative enthusiasm ran so high that the quotation machinery was swamped. Buyers were particularly eager to acquire metal issues and other commodity shares, several of which whirled up four to six dollars or more.