U.S. PUTS CLAMP
ON GOLD TRADE
New Three-Power Pact Is Announced by Secretary
Morgenthau.
WASHINGTON, Oct. 12. (AP)—
Secretary Morgenthau today announced the establishment of "a
new type of gold standard" by the
United States, Great Britain and
France, providing for the free exchange of gold between the stabilization funds of the three nations.
The tri-power agreement, effective tomorrow, does not establish
fixed ratios for currencies of the
three countries, and gold transactions will not be permitted by individuals.
Morgenthau characterized the
new standard as a "second step"
toward international currency stabilization, directly resulting from
the "gentlemen's agreement" on
monetary policy concluded by the
three nations September 26.
The chief effect of the new arrangements, he said, would be to
take the power to trade gold out of
the hands of "irresponsible speculators" and put it in the hands of
the government.
Other nations will be welcome to
enter into the agreement at any
time, Morgenthau added.
He said the arrangement might
be revoked by any of the three nations on 24 hours' notice.
The primary purpose of the
agreement, Morgenthau said, is to
protect American business against
violent fluctuations of the exchanges. He asserted it would have
no effect whatever on the internal
value of the dollar.
Under the tri-partite understanding, sales of gold will be
made, beginning tomorrow,
through the Federal Reserve Bank
of New York, as fiscal agent of the
United States, at a price of $35 per
fine ounce, plus a 1/4 per cent handling charge.