Evening star., 1933-12-17
REDUCED DISPARITY
IN GOLD IS SOUGHT
Purchases Abroad Are Made
to Raise World Market to
E U. S. Level.
By the Associated Press.

BY the Associated Press.
A desire to force the world gold price
up to a point nearer the figure fixed
by the Treasury for newly-mined do
nestic gold was given yesterday as one
reason for the recent big increase in
administration purchases of the metal
abroad.
This, too, has failed thus far to re-
duce the disparity, factor that has
set this busy Capital to wondering If
some new move may be in process of
formulation in the frequent conferences
between President Roosevelt and his
monetary advise.
In this connection, those who have
followed the subject closely are de-
voting some study to suggestions that
the objective of higher world price
could be attained by the establishment:
of a Axed quotation at which the Gov
eminent would purchase all newly I'M
ported gold.
Operation of Plan.
The offer alone, some economists
say, would be SUFFICIENT to send the
world price soaring, and few If any
actual purchases would be necessary
The process, they say, would follow
these lines:
The R. F. C. would offer to exchange
its 90-day notes for newly imported
gold at a rate of possibly S34.01, the
current price of domestic gold, or 1t
might start at lower point and work
upward. With gold selling for less in
London. there would be an immediate
demand for large quantities Of the
metal for shipment to America.
This would force the London price
almost Immediately up to point al
most equal to the domestic price. the
difference between the two would repre-
sent the cost of shipping the metal to
New York and Of insuring 1t while
en- route.
The process would work so rapidly,
economists said, that little If any gold
would be bought abroad at price low
enough to afford the importer profit.
Consequently actual purchases by the
Government would be small.
Directors to the plan pointed out
that the increase in the London gold
price would be represented largely by
an increase in the number OF dollars
and cents exchangeable for pound,
that is a weakening in the foreign ex-
change value of the dollar. They
agreed, however, that 1t would nave
definite effect equivalent to decreasing
the dollars gold content.
Price Held Unchanged.
The theory behind the gold-buying
plan is that the price Of gold and the
price Of commodities bear very direct
relation, that when one goes up or
down the other follows. BY keeping the
price of gold up, President Roosevelt
hopes to forward his campaign for in
creased domestic commodity prices.
The domestic gold price was held un-
changed yesterday at S34.01, while the
value of gold at London was $32.25, at
an exchange rate of S5.1015 to the
pound, that which prevailed at the time
the Washington figure was set. This
difference of $174 compares with a
disparity OF SO cents on November 27,
S1.85 on November %, S1.63 on Decem-
Der 4, S140 on December 9, $l88 on
December II, 1922 on December IA
and S1.60 yesterday.
The expansion of foreign purchases
was begun less than 10 days ago. Chair
man Jones of the r. F. C. has re-
vealed, and in that time it can be seen
from the foregoing figures the disparity
has shown no tendency TO diminish.
Meanwhile, the dollar has displayed
considerable strength.