IN WORLD MARKETS

Evening Post, Volume CXVI, Issue 105, 31 October 1933, Page 9

IN WORLD MARKETS

AMERICA BUYING GOLD

ROOSEVELT'S SECOND STEP

United Press Association—By Electric Tele-

. graph—Copyright. (Eeceived October 31,-9"a.m.)

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 in the world markets. President Roosevelt is prepared to carry the price higher as a iineans of fortifying the commodity price-rais-ing drive against foreign, influences, intentional or unintentional as those influences might be. It was the obvious objective of the President through this step to increase, even to control, the world price of gold. He is apparently convinced that a constant rise in gold prices would stimulate a similar movement of commodities, his week-old move, to bring higher commodity prices through the purchase of United States gold having alone proved a failure. . OPINION CONFUSED. Opinion concerning the meaning and intent of Mr. Roosevelt's second step is as'much confused tonight/ as it was over the previous step ho took a week ago, and demands are made on all sides that the President clarify the position. . ,': Democratic politicians, such as Senator Thomas^ said that the step would be tantamount to selling dollars and I would liave the desired effect. Senator JTess declared that the cheapening of the dollar abroad would probably permit foreign purchases of American goods at much reduced prices jn terms. of foreign currencies^ but would not raise domestic prices, y ■:"" GRAVE CONSEQUENCES. i Some commentators principally economists, have envisaged the gravest sort of consequences if the American purchase of gold abroad were not linked with international understandings. They, predict either gold embargoes by an Anglo-French bloc, the forcing of France to devaluate her own currency, the' wholesale demoralisation 'of foreign exchange,: and other things. ' ' The most pessimistic and unsupported comment was that, the President would possibly use the event, if tfio purchases fail in their intended effect, to justify direct currency inflation. There are intimations that tho purchases would not alone be made in London, but also in Paris and* Amsterdam, and there is even a possibility that the activities may be. extended to Canada if a Government agreement is possible, in view of the Canadian licensing regulation. l

Experts here, who described as futile the efforts to cheapen the dollar by the purchase of domestic gold, agree that purchases abroad would have the desired effect, provided, other nations took no offsetting action.