GOLD EMBARGO

Stratford Evening Post, Volume II, Issue 225, 21 April 1933, Page 2

GOLD EMBARGO

RESTORED BY PRESIDENT Move to Improve Commodity Prices FIRST STEFIn ROOSEVELT'S CAMPAIGN Press Association. —Copyright. Washington, April 19.—President Roosevelt announced to-day the restoration of the gold embargo as a move to improve domestic commodity prices. The restoration is effective immediately. This is the first step in the campaign the 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. President Roosevelt has apparently won a respite from the leaders in Congress who have been hammering for outright currency inflation. He wants the price 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 raiio with respect to currency than in the past, but he is adamant for stabilisation of the world monetary situation. Giving up the attempt further to support the American dollar in the foreign exchange is regarded as serving the dual purpose cf increasing American commodity pricen and putting the President in a strategical position for 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 a pound, and should the price of gold fall 10 per cent, a resultant increase in the price of cotton of 10 per cent, is regarded as inevitable.

A Fublic 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.

Foreign Currencies Advance A New York cable states that British currencies continued to climb steadily upward in the foreign exchange this morning. The pound opened with an over-night jump to 3 dollars 55 5-8 cents, a gain of 4} cents. The Canadian dollar advanced 5-Bths overnight to 85. All stock and commodity markets in the United States leaped forward to-day. On the New York exchange prices surged up by one to more than three dollars per share. Silver futures had the most spectacular rise in history, trading at New York with gains of three cents an ounce. Cotton rose a dollar a bale.

A Chicago message states that a wild upward surge in grains in early trading followed talk of inflation. September delivery wheat registered a maximum advance of 2 7-8 cents a bushel to 681 cents. All deliveries of wheat reached new high levels for the season, the gains ranging from 1] to 2 7-8 cents. Among the "bullish" items were the announcement of the disposal of many futures and the British embargo on Russian products.

Foreign exchanges at New York shot up spectacularly in terms of the American dollar to-day. Sterling was quoted in mid-afternoon at 3 dollars 81 cents for cables, the highest quotation since April, 1931. With exchange dealings rigidly controlled by the Federal Reserve Bank the market- was described as thin and uncertain.

Buying Stampede Chicago reports that 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 down the high points at the close, when the prices were 1J to 1\ cents above yesterday's finish. May wheat was 65 to 65 1-3 cents, July 65 7-8 to 66 1-8 cents, and September 67} to 67 3-8 cents. A later New York message states that sterling closed at 3 dollars 73 cents and the Canadian dollar at 86* cents (2J higher). Traders said that the sterling rate was only nominal, the wildest fluctuations occurring after the London market closed.

The stock market soared on to eleven points before meeting profit-taking in late trading. Cotton rose 2 dollars 50 cents a bale in New York, while silver, rubber and cocoa and several lesser staples 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.

A Winnipeg message states that a letup in buying support in the final minutes resulted in wheat futures skidding sharply at the close, easing rapidly from the earlier three cents advances to finish 11,l 1 , cents above the previous close. May wheat is 54 3-8 cents, July 551 cents and October 57i cents. The Secretary of the Treasury, Mr. W. Woodin. states that the action of the President in forbidding the export of gold has sent the United States off die gold standard. Mr. J. P. Morgan in one his rare public statements endorsed President Roosevelt's action in restoring the embargo on the export of gold.