Evening star., 1946-12-31
Lucky Number Set Gold Price
Once, Morqenthou Diory Says

laws and the price of gold gradually
increased from $20.67 to $29 an
ounce. But the President was ham
dicapped in the important gold
meetings that ensued by the illness
of William Woodin, Secretary OF
the Treasury. To strengthen the
Treasury Department, he followed
the advice of Raymond Moley and
Lewis Douglas and appointed Mr.
Acheson as Undersecretary.
The diary indicates that Mr.
Roosevelt soon began to rue this
appointment. Mr.. Acheson, 1t
seemed, was opposed to gold buy
ing. This opposition led to the
Presidents increased reliance on
Mr.. Morgenthau to carry out the
gold policy. The two aides came
into conflict often.
On one occasion, both conferred
with the President and Mr. Morgen-
thau suggested that all the lawyers
who had ideas on the subject be
locked in room together until they
came to decision on the legality
on the gold purchase scheme.
That's fine" the memories quote
Mr.. Roosevelt, "let them go to the
Attorney Generals ONCE and do it. u
How Prices Were Determined. d
The lawyers decided that the Gov
ernment was legally empowered to
buy gold through the Reconstruction
Finance Corp. Mr.. Acheson's COM
ment was: Il am opposed to our
buying gold The President has
ordered me to do it. I will carry
out his orders"
Beginning on October Is, each
morning the President conferred
with Mr.. Morgenthau and Jesse
Jones to set the price of the gold
for the day. While the President
breakfasted. usually on scrambled
eggs, the trio discussed the gold
reports from abroad. On the first
day gold was $31.02 in London and
$31.09 in Paris. Mr.. Morgenth1d
suggested $3l.36 for the first day
price, $1.56 over the previous
American price. "All right" said
the President, 1--WE will make it
1916"
The actual price of any given
day made little difference and was
determined arbitrarily, the diary
says. One day, for example, the
bedside conference decided on a
rise of 81 cents.
Its a lucky number" the Presi-
dent remarked, because it's three
times seven"
Opposed British Confidence.
AS the United States price of gold
rose above the world price, George
Harrison, of the Federal Reserve
Bank, was put in charge of foreign
exchange operations. He was anxious
to consult the English and French,
but the President protested: Every
time we have taken the English into
our confidence they have given us
trimming
However, Mr.. Harrison had his
way and when he called Mr.. Norman
in England the reaction was this
is the most terrible thing that has
happened; the whole world will be
put into bankruptcy"
The diary related that the Presi-
dent and Mr.. Morgenthau looked at
each other, picturing foreign bank
ers with every one OF their hairs
standing on end with horror. Mr..
Morganthau began to chuckle and
the President roared with laughter
The diary said that in the entire
gold buying program the President
has been handicapped by Mr.. Ache
sons proposition, and quoted the
President as having said: Il dc
not know which is worse, to keep
Acheson or fire him"
Finally the President remarked
that what he needed in the Treas
ury was heavyweight" while Mr.
Acheson was only a lightweight.
Soon after Mr.. Acheson was out
and he was replaced by Mr.. Nor
genthau.