Evening star., 1951-09-29
irilonetary Fund Lifts
.S35-an-0unce Ceiling
On Fabricated Gold
BY the Associated Press


The International Monetary
Fund has taken its $35-an-ounce
ceiling off the price of fabricated
gold-gold meant for art, indus
try and other such non-banking
uses.
The Funds action yesterday
meant in effect that the 49 Fund
member nationS-most of the free
world plus Czechoslovakia - are
now free to put as much Of their
non-monetary gold on the market
as they want, at whatever price it
will bring.
The decision will affect the
"free market" price of gold, pos
sibly driving it down as more gold
becomes available, or bidding gold
up if the demand is great.
Effects Not Practicable.
1t may also reflect in interna-
tional trade prices and in the
value, on international exchanges,
of some currencies as they are
offered in exchange for the now
more readily available gold. But
Officials said effects could not be
predicted, may take months to
show up, and depend partly on
political and military situations.
The Funds announcement sig
nailed the end of a four-year fight
to keep all but small percentage
of international gold transactions
Ipegged to the official price of gold
as money-or the backing behind
money-of $35 an ounce. The
Fund adopted that valuation Of
gold in relation to money in 1947.
1t urged its members to forbid
sale of practically all gold above
that price. This was part of the
Funds drive to stabilize the inter-
national values of national cur
rencieS.
Fabricated gold is put into bar
or other shape for sale, ostensibly,
to industrial users of the metal.
such as dental and goldsmith
supply houses.
Such gold has sold over the $35
ceiling, ranging up to SAT an ounce.
The Fund asked its members to
keep such sales to the minimum
necessary for industrial use.
Hoarded as Initiation Hedge.
Actually, this gold premium mar
ket has been active over and above
amounts of gold estimatedly
needed for non-banking transac.
tions. The demand has presuma.
bly, come from purchasers wanting
to change their national currency
into a gold hoard, as a hedge
against money imitation. With re-
strictions in most countries against
purchase, exchange or holding Of
gold>as money, purchasers boarded
gold under the guise of industrial
buyers.
One nation which has objected
to the funds hold the line" gold
policy is South Africa. It mines
about $4O0 million of gold a year,
and has been putting about 40 per
cent of it into the premium market.
This has drawn criticism from
the fund.
Another major producer, Cam
ada, has paid its gold miners a
subsidy in order to observe the
funds gold regulations. Canada
may now, if it wishes, free its
miners to sell as much as they
want in the premium market for
what they can get. This might
eliminate the necessity for paying
Subsidies from the public treasury.
| U. S. Treasury Holds Line.
, simultaneously with the Funds
announcement, the United States
Treasury announced it will con-
tinue its policy of holding all
United States gold sales to the
monetary rate of $35 an ounce.
The Treasury said the United
States concurred in the Monetary
Funds new gold policy. In the
past, the United States has op-
posed any relaxation in the ban
against premium sales of gold.
The Funds new policy was out.
lined in a statement by Ivar
Rooth. managing director. He
said the $35-an-ounce policy had
been found "impracticable" In tho
, face of widely varying positions
OF member nations. Experience
, had demonstrated, Mr.. Rooth
, said, I'VE cannot draw hard and
fast rules which everybody has to
, follow. Now we are not going
to police them"
Members now "are not bound to
= any particular procedure for
handling their external transac-
r tions in gold" he said.
t They are not limited to tha
= sale OF any specific amount of aold
S or to any particular proportion
3 OF their newly mined production. .
4 m Am -