Evening star., 1933-10-31
Domestic Quotation of $32.12
Is $1.07 Above Rate in
Foreign Market.
ASSURANCES AGAINST
MONEY WAR AWAITED
Preparations Are Made for First
Purchases Abroad-Beginning
Tomorrow Expected.
BY the Associated Press.

BY the Associated Press.
The world price Of gold slurnped
abruptly today in spite of President
Roosevelt's announced intention of buy
ing the metal in foreign markets, but
nevertheless the domestic price at
which the Reconstruction Finance Cor
poration will buy was advanced to an
other new high.
While awaiting assurances from Lon
don that Mr.. Roosevelt's approaching
operations would not arouse retalia-
tory action and precipitate a monetary
war, the administration set a price for
the day of $32.12 per ounce for the
yellow metal when fresh from domes-
tic mines.
BY contrast, yesterdays price was
$3l.s6 against world price of $3l.o5.
Today's world price, converted into
dollars at $4.7512 to the pound, the
opening exchange rate, was SLOT less
than the domestic quotation.
Dollar Strengthens.
The dollar strengthened today as
against both the pound and the franc.
The gold price announced daily at
the Treasury has crept constantly up
ward since the first figure of $31. SO was
established last Wednesday
Once before, the world quotation
moved downward, but, as today, the
domestic quotation was pushed higher
regardless.
Making preparations for the first gold
purchases abroad, officials hopefully
awaited word from London that the
British were taking the maneuver in the
spirit in which it had been explained
to them.
The London government had been
told in friendly spirit that the Chief
Executives plan for raising prices here
and steadying the dollar abroad was
purely matter Of domestic policy die
tated by conditions within the country.
1t could hardly be construed, the
British were informed. as a malicious
move designed to weaken the position
of Great Britain in the world Of trade,
nor as an unfriendly gesture aimed at
tions that Britain's first reaction was
sympathetic.
Plan Foreign Purchase
Awaiting more definite word from
London, Mr.. Roosevelts advisors pro-
ceeded buSily with preparations for
making the first purchase of foreign
gold, hoping the transactions could be-
gin tomorrow Busiest of these per
haps, were Federal Reserve system Of.
f1cials. Although the Reconstruction
Finance Corporation win be the pur-
chaser, the New York Federal Reserve
Bank will be its agent.
The gold must be paid for In pounds,
II bought in London, in francs If
bought in Paris and In guilders If
bought in Amsterdam.
To acquire these foreign currencies,
the reconstruction Finance Corpora
ton must buy foreign exchange. must
sell dollars for pounds, francs or guild
ers. BY constantly offering dollars and
consequently increasing their supply
on the foreign exchange market, many
economists agree that, lacking resist
ance from European capitals, the ad-
mlnistration could force the dollar
value OF the pound constantly upward
thereby depreciating the dollar In its
relation to the pound.
:, MI. Roosevelt apparently has assured
the British that he contemplates NO
such extremities, that his prime pur-
pose Is to increase the price of gold
abroad as well as here for its buoying
enect upon commodity prices and to
avoid such wide fluctuations as have
characterized the dollar-pound rela-
tlonsmp In the last few months.
London Has Weapon.
The London government has a ready
weapon for retaliation, which already
mas been in extensive operation. It is
the British equalization fund which has
sought to keep the pound stable. in
some instances by buying abroad, much
as MI. Roosevelt proposes to do.
II London should regard the Presi-
oents program as endangering its own
posltion, 1t could put the equalization
Iund TO work. The result of such an
lContinned az, pano ci---a-