Evening star., 1933-05-28
FREE GOLD MART
HELD LIKELIHOOD
Decision to Ratify Metals
Status Seen as StabiIi-
zation Move.
BY DAVID LAWRENCE.

A free market for gold In America
may be the next step in the Roosevelt
administrations effort to bring about
monetary stabilization.
Decision to ratify by law the depar-
ture from the gold standard, which has
been in effect theoretically since an
nouncement on April 10 by the Presi-
dent, is merely part of the Govern
ments maneuver to keep the dollar
down in terms of international exchange
so that when the London Economic
Conference meets stabilization can be
accomplished with much less embar-
rassment to all parties concerned.
An anomalous legal situation exists
because the statute defining the gold
standard has never been specifically
repealed. While it is impossible for
payment in gold to be made on bonds
or other promissory instruments be-
cause the Government by proclamation
has recently prohibited possession OF
gold, there is nevertheless the implica
tiOn that the present standard of
value" is still In effect. Interest could
be accrued and added to the principal
and hence subsequent demands made
for payment in gold equivalent.
Remove Legal Question.
law will remove all such legal questions
and transfer to the courts the determi-
nation of what is the responsibility of
private persons who have made con-
tracts to pay in gold.
The argument made by the President
in his recent radio speech was that all
contracts we're made with full knoWl-
edge that at any time Congress could
change the standard of weight and
fineness of gold in the dollar. BY ac-
tually repeating the gold standard act
and leaving the question to future de-
termination, Mr.. Roosevelt will have
strengthened the hands of the Ameri-
can delegation at the Economic Con-
ference.
Another thing the President has done
is to make the ultimate value of gold
uncertain for the time being He is be-
ing urged TO lift the restrictions on
gold bullion so as to permit free
market in New York. This would mean
that the Government, while holding all
Of its own gold intact, would enable for
eigners to ship gold bullion here in pay
ment of trade balances and the gold
flow would be moving toward New York
as we'll as London.
VIII Boost Price
The school of thought represented by
James H. Rand and the Committee for
the Nation, which has been actively ad-
vocating a devaluation of the gold con-
tent of the dollar. believes that a free
market for gold will automatically bring
the market price to about S36 an ounce
instead of S20.67 as at present When
this price is thus reached by natural
operations, the contention is made that
devaluaticn will have been reached
naturally and that it will then be pos
sble to ratify an existing situation by
changing the gold content of the dollar
to conform to the market price Mr..
RooseveltS advisers are considering this
step.
The announcement of the desire to
abandon the gold standard by law is in
line with the program of devaluation.
The next thing we may hear is a proc
lamation to allow gold bullion to be
dealt In as any other commodity. Then
with the expectation of return some
time to a gold basis, the price of gold
may rise in terms of dollars, only to be
restrained by an announcement from
the Government that it will sell gold at
a figure around $36, which is another
way of stabilizing at that amount and
bringing the gold content of the dollar
down by about AZ per cent deValuation.
tCopyright, 1880