The Western news. [volume] (Libby, Mont.) 1933-current, 1933-11-09

bold move In ordering lnc iNecohos W
ton Finance corpor-
What Gold alton to purchase
49,. newly mined gold.
Duy"'6 with a view to fore
Ing higher commodity prices. has led to
more discussion and, l may add, con-
fusion. than anything he has done
since the banking holiday of last
March. He described the action as
move toward development of man
aged currency" for the new deal Ills
action was as swift as 1t was unex-
pected.
The fact that his announcement Gre
ated so much confusion and resulted
In so much discussion Is attributable
largely, | believe, to the lack Ut knoWl-
edge generally among people concern
Ing the part gold plays In the coun-
trys economic structure. In the ap-
sence of that understanding, the nat
ural question was. what's 1t all aboutf
And to show how the program sue
ceeded In stirring things up, need aaa
only that the discussion continues ana
the confusion remains.
Mr.. Roosevelt sought, by having
federal agency buy the new gold at
prices above that which gold Is val
ued at In world markets, to make the
dollar less valuable as 1t Is measured
In world trade. 1t was q move, there
fore, supplemental to his action OF last
March when he placed an embargo on
export of gold. That action resulted
In more dollars being required to BUY
an ounce Of gold than when gold could
be bought and sold freely. In other
words, gold became more desirable TO
have than did the currency OF the Unit
cd States even when 1t was issued
against gold.
Thus, as d correlative fact, more dol
lars were required to buy bale OF
cotton or wagonload OF corn OF
wheat or a hog or share OF stock IL
corporation than had been required
before the embargo on export was
laid. When the federal government
for the Reconstruction Finance corpor
alton is an agency of the government
began to buy the newly mined gold q
prices higher than II the gold Wer'
being bought for mIntIng Into money
the dollars became cheaper again.
The President hoped for an increas
In prices of farm commodities and al
other things entering into trade cor
responding with the reduction OF valu
In the dollar as measured In Worl
trade, fAfter all is said and dont
world trade governs the value OF CON
modities because only In world trad
does the age-old law Of supply and dt
mand operate unhampered.) For es
ample, the federal statute providin
for the value OF the gold dollar mad
the ounce Of gold worth $20.67 tn
first days purchase OF the new gol
was made on a rate OF $3l.36 pe
ounce Of fine gold. 1t was Mr.. Roos
velt's hope, and the theory OF II
economists who believe In the Roos
welt program, that prices would a.
vance so that commodities would
worth roughly one-third more after Il
purchase of the new gold than thu
were worth In February before go
was withdrawn from circulation.
draw the comparison on basic dat
nearer to each other: the price
which the initial purchases OF ne
gold were made should have increas
the price OF commodities by a percer
age as large as was the difference
tween the price paid by the COVER
ment for the new gold and the pri
at which that gold could have be
sold In the world market.
Whether the thing Is capable
working that way remains unansWer
as far as / am al
Call lie an to see. Indeed, t
Experiment conviction ls1..1 held
merits and students Of finance In Wa
ington Is that the program cannot
regarded In any other light than
an experiment. 1t must be consider