NEW GOLD POLICY

Southland Times, Issue 22158, 28 October 1933, Page 5

NEW GOLD POLICY

UNITED STATES FURTHER INCREASE IN PRICE SHARE VALUES RECEDE (United Press Assn.—Telegraph Copyright.) (Rec. 5.5 p.m.) Washington, October 26. The price of newly mined gold has been raised to 31.54 dollars an ounce, 18 cents above the first Treasury quotation yesterday and approximately 50 cents above the world price in London, where it had fallen since yesterday. , . President Roosevelt issued an executive order authorizing the purchase of newly-mined gold by the United States Reconstruction Corporation in accordance with the managed currency plan. This order revoked a previous ruling so as to permit the export of manufactured articles fabricated from gold. The Administration further announced its intention to maintain a higher price for gold than is available elsewhere, and there is unlikely to be any decrease in the price unless speculative markets show a tendency to “run away.” No gold has actually changed hands, and it is more strongly indicated that the purchase policy is only a device to devalue the dollar. Yet the device did not work smoothly to-day, the dollar rising to 6.91 cents against the franc, which is approximately cents higher than the Treasury gold figure would make it. , , , The gold purchase plan also had the effect of minimizing the dollar fluctuation against the foreign exchange, the pound sterling, for instance, being quoted at 4.74£ dollars or approximately what it was yesterday. The gold plan likewise failed to continue to buoy up domestic markets as it had done since the first announcement. The leading stocks in New York lost one to four points, gold shares dipping with the rest of the list. Wheat was off about two cents at Chicago, other commodities also reflecting the recession.

THE WORLD PRICE LITTLE effect likely. (British Official Wireless.) (Rec. 5.5 p.m.) Rugby, October 26. The City editor of The Times, commenting on the American Government’s new gold policy, says: “So long as American purchases of gold at the prices stated by the Reconstruction Finance Corporation are confined to gold newly mined in the United States, the market expects that American fixation will have little, if any, effect on the world price of gold even though the price may at times be above the London price, for in that even the Government would simply be paying a bonus to the producers. It is unlikely that the American Government would sell gold, although it has the power to do so, since such selling would have the effect of increasing the demand for dollars. That would cause appreciation in their gold value,, which apparently is what the President desires above all to avoid doing.”