The daily independent., 1936-10-13
New Cold
Standard
In Effect
United States, Great
Britain, France
Agreed
ON DAILY BASIS
Mor@an,!,au Says Agree
men, Effects Only the
External Dollar

WASHING, Oct. 12-lUPp-
Secretary Of Treasury Henry Nor
rcnthau. Jr. announced tonlgh1
that the United States. Great
Britain and France tomorrow
will % on = New Gold Standard
which will rOut money spectators
ana aid further sterilization OF
world CurTCnCiCS.
The new agreement. Under
which the three nations will per-
nit an exchange of gold for the
conversion of paper currencleS OF
the individual countries. will op-
crate on a day-to day basis. IL
may be CancClcd Dy any OF the
participants on "a hours notice.
Il, IS a New Gold Standard. a
way of doing business which has
never been tried before. " Morgcn-
ihau said at q press conference.
In agreeing to the proposal we
took into consideration first and
always 0uT internal prosperity.
If. for example, we find that
the agreement and It's operations
are rctarding recovery. we'll scrap
it. England and France have the
same privilege" "
The new plan. Morgcnthau said.
differs from the Cd gold stand
ard in that it viii permit the cT-
port or carmarking Of gold only
TO and between governments in
stead of private business insitu-
tiCnS and traders.
Eleven Billions IN Geld
The United States tonight had
uCar,y Sl1,O0O,O0O,OO0 worth of
god. Under the new plan. none
of this gold can be shipped TO any
country tomorrow except Eng
land and France. Other COun-
tries. however. may come into the
agcCmCn. and thus be permitted
to participate in the exchange OF
go,i.
The door is wide Open" said
MCrECnthau. We're not going out
drumming up business. but we'll
welcome all other countries which
want 10 participate.
The Treasury will announce
daily the names of countries
eligible to take part in gold trans
actions. This country's fiscal
agent Will be the Federal Reserve
Bank of New York and it Will
make sales CT gold at S35 per
fine ounce plus one quarter per
cent handling charge.
Sales and regulations will b. gov
CruCd by the regulations issued
under tine god reserve act Of 1884.
This represents a enforcement
Of control of the foreign exchange
malkct from q few Individual IN
tCIEational spectators. ReSpCn-
siblc governments Of the people
Will now cooperate to assure a
minimum exchange fluctuation.
No Effect On Home DOlIar
Business men with merchan-
GiSc to sell abroad or business men
who arc importing merchandise
will be free 10 operate through
their respective banks in regular
and normal exchange operating.
The International SpeculatOr. re-
SpOnSiblC to no one and rCcOgn-
iZing no flag in conducting big
business, will not in the future be
able by rapidly shifting his funds
from market to market reap pri-
vate advantage through Stimulat-
ing chaos in foreign exchanges -
MorgGnthaU pecrcd into the
faces OF the correspondents. lean
ed back in his chair and said
quietly:
AL right, boys. fire away"
He was asked what effect, if
any. the new development would
have on the dollar in the pockets
If the man-On-thc-Street.
None at all, Morgenthau re-
piled. This move affects only
the external dolla:-the dollar
used in international trade. The
dollar that you have in your pock-
ct and l have in mine with which
VIC will buy our supper tonight
will not feel this action. But, if
we find that it does, if we find
that our internal prosperity is
adversely affected, wcIl discard
the agreement"