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Operati01l1 ot the hchay• S\aDlllsation J'U.n4 -  1934-1939  Dratt aubaitted b7 v1111- •. Brown, Jr. Jul7 11, 1942  ~ PARf I  The Aatabliahment of t h e ~ Wl\hin the 1'1"-•vork of a Bew Monetary S7ata .  .F~T 11  Frel1ain&J7 Operation• and ,1acal ~•Qc7 ~rr&n&nenta  J  ~  the Fund - 1934. PAB.X III  -  ?J.fa IV  !Ae Operation• of the Jund froa Ja.nuaq partite ACre .. ent of Sep\ember 193b.  1935 \o the Tri-  The S\aD111sation 1U.Dd Within \he 7raaework of \he ~•rica.a. Monet&r7 S71tea •• Modified b7 \he Tr1par\1te Acr•••en\ of  1930. FART  'f Federal Reserve Bank of St. Louis  Special bch&Dc• Stabilisation Acr••enta Ou\aid• the Tri:parUh:_ 1937-1938. !he Gold and Foreign ~xcha4ce Operations ot the Jund the Tripartite A&r••••nt to the Outbreak ot the aar.  fro■  I J7  lote ot Iteaa leediy \o be J"urther Checked or Confirmed  Pac• 1  Accuraq ot 1\at•enl concernizac manner in which gold in circula\ioa waa held a\ \he beginninc of 1934.  Pac• 5  Correc\ lepl reference to the Ac, ot March 17, 18b2.  Pap &  Coaf1raa\1on ot \he procedure purchase(, Januar7 1933.  Pace  9,  12 &  e■plo7ed  in Treaaur7 gold  or correct reference to the or1c1n ot the cold taken oYer b7 the Stabilization Fund in M&7 1934.  Collfir■  33  Check ata\nea\ that new t7pe cold certificate• were giYeA in exch&Ac• tor cold in the Red.e■p\ioa l'tmd tor lederal lohe.  P&e• 10  B•H"• Face  32  Jot• 4: CoAfil'II or correc\ atate■ en\ that gold bought b7 \he S\abilisatioa J'uD4 in MAT 1933 wa• taken trora the General JuDd.  Pap  39  Coatira or correc, a\a\aenta ■ad• w1ih regard to Secreta17•a power• \o deal in Go•eruen\ aecurit1ea for the Stabilization 7wul.  Pa&•  44  Coaf 1na or corre·c \ the inference that no tranaactiona in  a\erliDC or Swi•• franc ■ were conte■plated when the fiscal acenc7 arranceun\a ot Septe■ber 4, 1934 were aet up.  Cheek date on which Guaran\7 Trua\ seen\ for the Stabilisation Fund. F~•  & -  lOb Pa&• 80 Federal Reserve Bank of St. Louis  waa appointed &a  Coatlna or correc\ 1Dference th&\ the lwld'• operation• in franc• were influenced b7 the aaaaaina\ion of Iinc Alexander of TucoalaYia.  50  Pe«e bl  Co■p&Jl7  Collf1ra or correc\ the atate■en\ tha, no interea\ coat waa allowed tor in calcula\1.Dc the Jund•• abili\7 to bu7 gold 1D Londoa at $34.77. Check cold export poinl, Paria to lew Tork, a\  ot  Mq Jun•  ti■•  ot crieia  1935.  Collfina coa\ ot ahipaen\ ot ailYer, LondOA lo lew Tork. I ■prOYe atate■ea\a concerniq freaaur.,•a purchaae ot a11Yer tr011 Chill& ia I.qua\ 1935.  - 2 -  ,,a,•en,  Correc\ puchaaed Pace  9b  Correct a\a\e■ent1 coacerninc chance• in !r•••lll7 Silver Pol1q in loTeaber 1935.  Pace 134  -  Check whether !r•••U?'7 took the 1nit1a\1Te in necotiationa ,11e Uae ot \he friparU te.  vi th Sveclen Pace  concern1QC Chin••• del1Ter1ea of ailTer \he !rea1W7 in Jlq 1935.  153 -  Pace 158 Pa«e 178 -  Pap 189 -  a,  Check ata\emen\a coaceninc \he requirement u4er the !riparti,e \ha\ gold earaarked au.a, be \he proper\7 of the ina\itution tor who•• Nnef1, the earaark waa created. Check 4a\e and conten.\a of ••therl&D.4• Juk le\ter. Check a\a\Mell\ \ha\ Bau of rraace placed all or ■oat ot . thl colcl -..OQ&h' troa \he hAd la. 1h eanaark with \he Federal aeaerTe. Check ata,e■en,, coaceralac pi11rchaa•• ~ the 1'm4 ln \he open ■arket la London. In geaeral, I do ao, !eel en\irel7 confident I MTe accura\el7 aeparated the Ju.D.d'• cold purchaaea in London, ■-4• la tu open aarket. froa thoae aade troa the knk ot ~laacl.  ,u,  Pac• 197 -  Check inference that the Jund in LoZMiOA, IOYAber S. 1937.  Pac• 201, -  Cpllfira \he ticur•• ·relatiiac \o the adJuat■eni• aad.e b7 the had when cleater111aation waa b•CUD·  boUoa  &  ■ old  gold ill the open  ■arket  202, ,op  Pac•  205  -  Check ataieaent that &!\er 4eaier1111a\ion the Fund'• tranaactiona with ,he General !reaaurer were continued under the Secret&r7'• le\ter ot loTe■ber &, 193b.  Pac• 21b  -  Check \he a\ahaen\ that the BaDk ot ~laad acquired dollar• for pec&iDC aterliDC a\ 4.0b-1/8. lune-Aucuat 1939, \hro°'h releue o! gold troa earaark. Federal Reserve Bank of St. Louis  In addition, I haTe beea unable to clear up co■ple\el.7 a queation concerninc \he elate on which approT&l waa obtaiAed fro■ the Preaident tor aal• of cold \o all or 8A7 Central Bank or !reaauey in 193b. !h• 41tf1cul\7 1a a\atecl on Pa&• 112.  Ht - J. -  I.  file fr•••Ul'J''•  lol4 Accout1 Prior to ,lh• PaHage rd lhe Golcl  •••n• Mt  et 1934. the Jloul&r7 Gold Hock of lh• U.Ued Ital•• Prior lo \he Paaaqe  A.  of the~,.  hoa 118T 19JJ lo JanQar7 JO, 19J4, the lloula17 hl4 l\ock of the UnUe4 Stalea waa Tlrtuall.7 coaalant at Ju1t ner $4,)00,000,000.  U wae held p.rll.7  la lhe TauUa of the frea11U7 • parll,r ill the Tau.Ue of \he ~•4eral ••Hne Banke aa4 partq  'bT peraoDI who had not 7et ooaplied wi\h the  baud lh• .._rpDq lankinc kl of 1933. uple, the 41etr1but1on of the lotal  ■oula17  l  gold hoarcl1ag order,  On loTa'ber 29,  1933.  for ex-  col4 1lock lMtveen lh••• holdera  waa ia rou4 fiCVH •• followa:  J,201,000,000 Ia olrclll.aUon  folal Of \he ~  33  J,201,122,000 pld  311.000,000 11  ~.,23,000.000  coin aad 'bul.llon held 'b7 the frea1u.17 on that 4q olllt  -•1111011 wa1 fr•• gold 1a the General h.114, all the rest \e1ag held 1n truat  •• 1Dd1caled b7 the following 1ta\eaent of lhe gold 11ab111UH of \he Trea1UJ7;  1 ( ~ accvaq)  •••I  11 Ill•• lh• Ool4 BeHrn .kl talo effect oa Jaaaa'f7 JO, 1931', plcl coin in elrclllation. \hen ••11-.tecl at $217,000,000 waa excla4ecl froa the Jlonet&r7 Gol4 Hock. for reaaoll1 ••• ~ed•ral ••••"• lluletla, 1ebrQ&J7 1934. p. 95. Federal Reserve Bank of St. Louis  - 2 -  !r•••urJ' • Gold. L1ab111 the, loT•l>•r 2 ·- : .  to '1le Je4eral •••en•  17•'•  .2.762,259,000  Golt Cer\iflca\ea belt la Taul\ b7  942,794,000 Gold hnd., Je4eral Beaene Joa.rd  1,77s,  (ot which Je4eral Re1ene ~•n\1  J1W14.l,lo5.174,ooo, cold ,e,tleGol4 ••4eap,1on 1W14, Jederal 4o,188,000  to Other•  405,755,000  Gold Certificate• in circulation outa14• the 1e4eral Re1ene Bank• and the !rea1UJ7 •••e"• Aca1nat Un1\e4 Stat•• lotea  219,317,000 156,039,000  total Gold. L1ab111\1ea J'r.. Gold. a\ \he 411po1al of \he !r•••VT  to,al Gold. Coln• and. kl.lion held.  •3.161,014,ooo 33,101,000 .,.201,122,000  1 )coap1le4 fr• fabala\loa al\ache4 lo S\a\..en\ of Go•ernor Jlack concernlac \he lol4 ...." . 1111 (1236&) - 1•4•ral J.eHn• hlleUa, lebrua17 1934, 10. 7"-5 u4 \be !reuUJ7 Dail.J S\a\•ell\ of loTeaber 29, 1933. there are allpl 411orepeaoi•• la \he•• 1ource1 an4 where ,he1e occur \he !rea1ur7 Da117 l\&haea\ tipr•• are ,a1cen. Federal Reserve Bank of St. Louis  - 3  -t  Ot lhe•• 1014 11ab111\1ea \he Crol4 ae4111p\ion Jun4 acaia1t Je4eral l•••n• lo\ea an4 ,he 1014 hel4 acaina\ Je4eral i•••n• Bank lo\ea and lational Jan.It lot•• were 11ab111,1•• of \he aeneral hn4, and \he rnaailld1r 11ab111tiea  ot \he freaauZ7•1 gold account. Q~J<..Y~  !hil 11\uaUon reaa1ne4 Yirtuall.7 unchanced unUl \he ;c,14 I , '=' went ln\o etfect on Juuar,  B.  1-. ►  Ac\  30, 1934.  Gold Acquired b7 the GoYeruent aa a R••ult ot the ~ld Purcha.•• Prograa. In addition \o \he cold held in ,he !rea1U17 and included in the Mo~etar7  Qold S\ock at  t20.b71s34  per ounce th• !reaaur, aDd. ,he lecona\ruct1on Jina.nee  Corporation held, on the eTe ot th• pa••ac• ot the Gol4 ••••n• Act"f>gold purchaae4 at Y&rioua price• hich•r than  t20.b7♦  in the coura• ot the thr•• pbaaea  ot ,he gold purch&ae program. fh• !irat phaae of th11 procraa laated troa Septeaber S to Octo\er 24,  1933. I>urin« ,hi• period the !rea1U17 accepted newl7  ained doaeat1c gold a,  the Kin,, and A11&7 O!t1c•• on conaicma1nt tor aal• \o peraona licenaed to acquire gold for non-aonetU7 purpo••• or tor aale \o !oreip purchaaera.  !he  aeeretaq waa authorised under ~x•cu.tiye Order of Aucuat 29 to 1111 auch cold at price• baaed on the world pr1ce! 1 )The aecond  pha•• waa  carried out b7 \he  •~0,1111- warltlet· lhe trn1ca1 \11cr-oTer1h• ..-.~ c. et,M 01r-Jauua11 1~  oi-  J•• r, -,1--au-,.,elaRU7- -l . -.-t-..4ondue h • Uae r.oor.4 .&u...._,,..c~,,.. the· ½a\ur . 11)th• 4a117 price• are 11Yen ln th• Seoret&17•1 .A.Anual Ieport for 1934, Federal Reserve Bank of St. Louis  P• 205.  ••coll1truoU01a ft&aJlce CorporaUoa uder h•cutl•• Orcler ot October  15.  Late  la Oclol,er \he Corporatloa bepn lo purcha•• pld both at ho•• and abroad  ,ra4aall.7 lllcrea1lnc 'h• price pa14 t r • $Jl.36 per tln• ounce Oil October 25 1 lo t3a..01 oil Dece■ber 1. !he pl4 acquire4 abroa4 va• purchaH4 ),- \he Ckaaraa\7  !rut Coap&JlT la Parle an4 Lon4on •Uher tro■ lh• Jank ot h•u• or  la th• open u.rket wU_h foreign eubange 'bought by lh•• at rah1 wUhin Mia  lllllh acr••4 gpoll wUh \he 1•4•ral ••••rn lank of Sew Tork acUn« •• Piacal Acent tor \he leconalruction J'iunc• Corporation.  !he eold ao acqu1re4 •••  \ought fro■ \he Ou.arant7 !rua\ Coap&117 b7 ,he llecoutru.eUon J'inanc• CorporaUon 2  wl th ... own aoh1 ~•bl• ln gold • !he AJIOWll of eold purchaHI authorised  11&4er 1h11 arr~•••nl ••• at tlrat $25,000,000 \ut ad.411loul puroha••• up lo $20,000,000, $25,000,000 and $25,000,000 ••r• au,horl1e4 oa Dea.aber 12, 1933, Deonber 20,  19JJ and J'an1W7 3, 1934. On  lne■'ber  23, 1933 \he Oaaran\7 fruit  Collp&117 wa1 lnatrucl•4 lo tran1ter the «old 11 ha4 aoqulre4 abroad  fro■  London and Paril office• to th• Bank of ~land. an4 lb• lank ot 1rance.  1\a tFp lo  Juua17 15th• lecon1trucUon 1inanc• CorporaUon ba4 boa«h\ $23,000,000 of 40•1Uc gold and tlOS,000,000 of foreign col4 la Loll4oll u4 Parh a\ lh• \o\al 001,  of $1)2,000,000 and an aT•r~• coa\ of $32.75 per ounce3 . On  JanU&J7 15  'h• Pre1141n,  aen\ a 1peclal  •••aace  lo  Coner-••  aatlnc tor  power, lo 4nalu \he pl4 4ollar, lo THI tUl• lo all gol4 ln lh• tJnU•4  lta\e1 ln lhe OoTernaenl u4 lo ••labl1ah u  ot the 4nalwaUon protU. pr.o eraa wa1 ,raa,terre4  tro■  hcbance l\ablll•alion hn4 out  0a lb• - • 4.,- lb• eucuUon of ,he ,old pu.rchaH  lhe lecoaa\racUon liD&Ace Corporation lo the Tr1a1UJ7 .  11\14. 2 Lener ot loYaNr 1, 19.33 fre■ \be Oaaru\7 fruat Co■p&DT ot In Tort \o the •0o14 -- Geural -- 1hcal Agent, aD4 hcleral leHn• laaJc of ,.,, tort la  ,u  Depo1llarle1• tlle 3 !he a.r.c. ,o14 ••• la.ken onr bJ lh• fr1al\U'7 on J'ebrua17 1, 1934 at thh -price. frea11117 -oraa4a la IITranaacU oas--0.neral • fll•. ( Check vhe\her lhl 1 ••• aho lb• ooe\ to the 1. r. c.) Federal Reserve Bank of St. Louis  5  COJlHlll ot lh• Preal4ent for an iHU of $250,000,000 Jaa11&17 16, 1934 u4 aatvtnc - r t l 11. 1934.  u.  I. \ond.1 lo  Ia ·••crlblq Uw  \bl1 l11u the Secre\a27 •14 ln hl1 lel\er ,o lh• Pre114ea\s h uHcl lo pvohaH \hroagh the 1e4eral  a..ene  )e . .,ec1  PVJ)OHI  1 1Q.Oh  ot  \ond.1 will  lank of •ev Tork ,c,14 coin 0011-  talning an aaoant of p14 equiTaleal lo •ol4 ptiroha1e4 abroad 'b7 a \ank, aeaber of \ha 1ederal lleHrn .,.._,•• 4elipa\e4 b7 the 1e4eral laHrn lank of Tork.  •w  !he price to 1,e pa14 for 1uch eol4 ooln wlll be th• oe1t ln tollar1 ef  .  tJt1  the •qui Talent aaout of eol4 pvchaH4 abroa4 , ,  ~  prlc•• a4Tlae4 b7  ■e fro■  ti•• lo 11•• with 70v approftl, 1acla41q haa411a« oliara-1 aa4 001\ of \ru1-  porteUon to •• Tork an4 la1uraao• plu 1/'4f, of euoh 4ollar ooat lo ooTer the oTerhea4 of 1uch \rueacUou •1  fh• \oa41 will aleo \e 1lH4 lo pvchaH troa the  1e4eral le••n• lank of lev Tork ,o14 ooln ooa\aiaiDC an uout of pl4 equl to the  do■..  uc  gold pvchaH4 b7 \he 1ec!eral ••••"• lank of •ev Tork  w1 lh ■7  appronl•. 2 !he purcha1e of ooln ra\her lban 1014 \aJ-1 with \he1e Ual\e4 Slat••  ••cur1tle1 waa nece11lta\ed. 'becaua• \he legal au\bori\7 of lh• !rea1V7 lo\~ gol4 at abo•• \he 014 l\a\u\017 price•• 11al\e4 to 001••· the  Ac\  It wa1 fov.n.4 ill  ot March 17 , 1162 (3111.1.C. 7)4 aB4 752--cheok). fhll ClTll Var Act  author1ae4 \he lecrel&r7 of th• frea•UJT lo ue • • • an4 ao\e1 for the pvoha•• of.!:!!! at 1uch ra\e1 •• he 4eeae4 in lhe pu\llc 1n,ere1\.  I\ waa \herefore  aeoe11a17 for ,old acquired. abroa4 lo be oo1ne4 or exo~for pl4 oo1n before  ,uz:)  the fellowtac II04u, operaa41 \heretor• wa• U -ooul.4 \e 'boapt 'b7 \he !r.. 1 the 1/...,, han4llac oh&r,. whloh ••• later lapoaet oa all 1014 purcha••• and ealea 11114er lhe Gol4 leHne Acl appear• hen for lhe · flr1I UH an4 1\ ean 'be Werrecl lllal 11 wa1 aol aa4e par\ of ,he new aoae\a1"7 171\ea allt hcauH et aD1 4e11r• to wt4e• ,11e col4 pola\1 1"l\ 1olel7 for reTeau pm-po•••· 2 'Gol4--General--111oal ~•nla aD4 Depo1lla.rle1• file. ) ...oraa41111 lneaber I, 193) ln •Ool4--General--Prooe4ve aa4 Poltq• flle. Federal Reserve Bank of St. Louis  6 worket out lo accoapll •h lhi • n 1ul,: Jloclu Operaa41 tor lhe hrobaH ot Gold Abroa4  1  At th• 41reeUoa ot lhe leonlar7 of lh• fr•••V7. th• 1e4eral :ReHne a apec1tle4 uout of p14 lau-1 ln Load.on or Pan•. ft.• haru\7 fruat CoapaJaT will uae their own tu4, la LoD4oa or Parh u4 will Nceap lh•HlT•• ~ pvohael·DC ln \he eachaap 11arkeh the tuad.1 ao ue4 wilhla the llaU ot eac~ ra\e1 tlze4 "7 lh• Secre\aJ7 ot Iha tr.. 1.  laAlc ot Sew Tork will requet Ill• Ouaraat7 true\ 0ollJ)AIIT lo  ,a,-  •lU7·  ~  2. Vb.ea the ,c,14 h pvcha1ecl U 1hall be 4el1Tered lo lh• Jank of bclaa4 be hel4 1ubJeel lo lhe order ot \he 1e4eral or the laak of rraac• luk ot Iev Tork. .!he laUer wtll anan«e to haTe the pl4 held ..narked. la • apeclal accou\ at the Juk of hcland or the luk of lranc• aa4 will a4T1H 'h• In Tork .uaq Otf1c• Iha\ the ic,14 1• held ta LoD4on or Parle tor the accoal of lh• !r.. 1urer of \he Unl\ed. Slat••·  h••n•  ,o  J. the frea1ver of \he Ual\•4 Stat•• vlll la1truc\ th• Aa1a7 Office la lo hold at the 4hpoaal ot lh• Ouarut7 fruat 00llpaJl7 u uounl of pl4 Tork lev cola equlTalent in flu ••lp.\ to the ,old held abroa4.  4. !'he Oaarut7  !rut CollJ)&DJ wlll ••111h11 cc,14 ooln lo \he  fr•••UJ"7  aa4  Neel•• la ~ a , fr•••UJ"7 aot•• aa\urinc la abou\ lhlrteen aoatha, with later••' at a rate \o be a«r•e4 upon. euch no'•• lo be la a tac• aaoGAt equal \o \he 001\ la 4ollar1 ot the eol4 pvchaH4 abroad plua ••Uaa\ed th1pp1~ charce• to lew Tork.  5. !he Secr•laJ7 ot lhe  !rea11U7 will aathorlH the 1ederal leHne lu.k ot ••v Tork ,o purchaH theH aotH froa the GGaraa\7 !ruat CoapaDJ oAc• a week whell lhe Guaru\7 !ru, CoapaJIT wlll pq \he 7e4eral leaene JaDk •f lev York the 1hlppia« charc•• whieh the 1ed.eral le1ene ».at of lew Tork wlll uee \o 4•trq the coat ot lhlppinc th• cold fro■ Loa4oa or Parle \o lh• lev York Aa--, Office. If th••• e1\1lla\ed 1h1pp1ng obarp1 ahoul.4 proT• to 'be lul&fflclent to oonr the co1t of 1hlpp1~ all of th• ,ol4 hel4 la I.oD4oa or Parle lo lev Tort. \he 1ederal llee•r•• lank of lev Tork wlll aol be expeo,ed. lo ehip the uconrecl  balance ot ,old ule11 the frea1ur7 PAT• th• a441Uonal 1hlpplq coat,. !he price flae4 bT ,he frea1ur7 for anl7 -■lud 4o.. atlc gc,14 whea coined. waa $34.45 per ouce 2 u4 th• ,ol4 'boucbt abroad u4er \he a'bo•• prograa ••• acquired al a roa«hJ.7 equlTaleat prlce. 3 1 1 Gol4--Geural--111oal jpah u4 Depo1Uar1••• flle. S.Yeral plane were worked eat an4 the on• qu.ote4 la the la ao\ altache4 lo the toraal letter of the leorela17 t ':i th• 1e4eral ••••rn lank ot lew tort of Juv.&r7 15, 1934, puUln« lh• plan 1ato etteol, a\ U appear• to M lh• proceclur• ac\ ue4. - _.(Check) I lecr•laJT'• uaul leporl tor 1934, pace 205. 31 \he price of lh• ,ol4 eolD he14 on l !'Illa 11 t.nterr.,. fro■ \he tac\ worka oul al $JJ.112 per ouce. Federal Reserve Bank of St. Louis  ,ha,  .Tu.  7 f he foreign ~old tren~aet1ona of the trea•Ul7 at this t1ae, thererore,  uou,ed. lo u exchaa«• ot pl4 oola al ho•• tor gold bullion abroad at the 1tal~\017 prlo• aa4 lhe repurohaa• of lh• ,old oola al pric•• tlse4 b7 lh•  Th• face •alue of lh• coin  lecreta17.  10  pa.rchaae4 wa1 $J2,~JS,J50 ftla.e4 at  .54,122,155. 1 ,he aad  4o■eatic  per ouac•.  eo;4  purchaH J)rogru a• a whole lh•  hT1n.■1nt  gol4 at _a lotal aoa, of $191,000,000 aa4 at  Ot lhh. oTer  61~  acqu1re4 torlip  •••race coat ot$JJ.09  wa1 pv.rchaH4 ill LoD4on u4 )3~ ln Parl • u4 wa 1  41elrlb•t•4 belween lh• leooaa\ruc\ion riDallae Corporation an4 !r.. •UJ7 ~urcha••• •• follow,:  1 Nnoran4ma of.., 26, 1934 la •Go14--Geaeral• file. wh1oh 1tah1 that on \bat elate 1h11 aaou\ ot oolll, pvcha,ect abroad 1Ut4er arruce••ah lla4• vUh th• Guarul7 ! CoapaDT ot lev York prior lo JaaTJU7 )1, 1934 wa1 1Ull hel4 'b7 \he 1e4eral leHne Jtaak of lew York tor accoua, of Iha !rea1U17 (cheok). 0a loTe■ber 2), 1934 Iba 1e4eral ha•n• lank ot lew York 1\lll held $5S,21S,7o4 · ln gold ooln acquired Wlder \he arranceua\a of JuQar7 15, 1934 for th• fr•••Ul7, an4 waa ln8'r11Cle4 on Iha\ 4q lo Jaan U M1'e4 lato bullion under the l•ra• of the Ool4 ~•••"• Ac\. (•fruaac\loaa--J-q1nc and. Selllq Gold-Geural• tile). !hh appear, lo laclad• "- $),000,000 ln coln purchaH4 111 lb• t1nU•4 Ital•• 1184er \heH arrupaen\1. (Ia hit Amnaal hporl for 1934 lu Secrelar, 1a,a Oil Jaaua17 31, 1934 '1w fNa1V7 ul4 $30,623,145 tao• uoual of pl4 cola acqulre4 al a ooa\ of$49. • I caaaot recoacll• lh• 4ltterence la tlw•• fl,a.rea.) Federal Reserve Bank of St. Louis  ,u.,  \  '--  8  co,, ot Gol4 Purcha••4  •. ,.c. l>o■H Uc  Gol4  trea1v7  •  •  (■ 1111011•)  011.  (■ 11110111)  &95,000  23  94,817  3  55  772,000  529.000  2.~7.000  Ia Loaclon  32.75  A.Yerac• 001\ per os.  bl  141  OllllCe  !h• !r•a•UJ7'• Oolcl  5g  132  total Coat lo treaa1U7  II-  31, 19341 )  154,ooo  In Parh  $35 per  JUv.&rJ  108  u. s.  Yalu• al  ot  Ola..  19oN1p Gold. IA  &I  A.OCOUJl\a  After \he  P•••ac•  ot the Gol4 ····"· A.ct and  Jetore \he ~a\abliahaen\ ot \he hJld. !h• for•co1q d.e\ail1 of the wqa in which, an4 th• purpo••• for which, cold waa held b7 \he l•d•ral R•••n• Bank• and th• CkYeruent Ju,, before \he Gold  R•••n• Ac\ wen\ 1Ato effect  ha•• been ci••n in orier  to aue clear lh• preci1•  ettech of \ha\ A.c\ on \he 1014 accounh ot the Trea1ur7 up \o lhe aoment when \he S\ab1111a\io11 Jund wa1 e1\abll1he4.  A,.  Th• !ran1fer of \he Gold llHe"H of \he 1•4•ral ll•H"• Bank• \o th• !r•••IU7•  1>couenae4 froa fabl11 ci•en in •tru1aclion1 General• 71le . Federal Reserve Bank of St. Louis  9 0a Jaa11&J7 JO,  1934, \he Oo.-r... at took u,1e lo all lhe p14 owae4 b7  the J'e4eral leaene 17•1• leottoa 2 of ,he lol4 ••••ne ~, which rea4a:  •Upon lhe approTal ot 1h11 ~, all rlp\, UU• u4 lalere,t, u4 eTe17 elai• ot lh• rederal hHrn Joard., aa4 of e.e17 1e4eral l•Hr-Ye ~al, la o4 to a,q •D4 all gc,14 oola aD4 pld bullion •hall paH to aD4 are hereby Teate4 la the Ua1te4 Ital••: and. la pqaeal \heretor oredlta la equlTaleat uount1 ta 4ollar1 ar• hereb7 ••labll1hed ta the frea1V7 ln the accowal1 au\hor11e4 11D4er \he 1lzteealh para«raph of lecUoa 16 ot \he J'e4eral •••"• Aol, •• heretofore aa4 bJ thh Ao\ aae1Mle4 (U.s.c. !1\l• 12, he. ~7). lalaDo•• la 1uch aocout, 1hall N pqaltle la pl4 oerUficatH, which aball N la 1uch fora all4 la au.oh 4eao■ 1na\1on1 •• lh• 8ecret&r7 of the !rea1UJ7 11a7 4etenaiae.• fhla lru1ter va1 oanle4 oul u  !he ,old hel4 an4 lhe p14 he14  '7 It.  tollowa:  1e4eral •e••n• Jaaka aaoultac ,o •111  '7 \he federal leNne  Ac••'•  uouaUnc lo t62s  gol4 held ta 'h• Ool4 lel\leaea, hn4 •oullac ,.  t727 •lllloa1  ■illloa1  ■Ulloaa, \be  and \he eo14  held la the 1e4eral lea•"• A«ea\1 hll4, ...atlq lo tl,0)5 ■lllloa1--la all 1 . la ezchuce for oreclih pqable $2,561 aill1on1 -- vaa taken oTer bJ the  fr•••UJ"J'  la gold cerUflcaha of a uv l7P• 'bearlnc oa \heir tac• \he vor4tq:  •fhta 11 to certlf7 that there 11 oa 4epo1ll la ,u !Naa1U7 of lh• - 4ollara la ~14, pqalale lo lh• t1aUe4 ltah• of Aaer1oa bearer•• au\borlsed. b7 law•. 2 !he J'e4eral le1ene Apale l'aacl aJl4 \he lo14 Setlle■ea\ ~ which had theretofore appeared lD lh•  fr•••V7 Dall.J' ''-'•••nl  ua4er \he  haa41a«  •0o14 J-un4,  1e4eral leHn• Joar4•. 1-c... ,he •0o14 C.rUtlca\e 1ua4. 1e4eral ••••"• Joar4•, and. the whole •ounl Gt &014 taken onr troa lh• 1e4eral  IH•"•  l71t• •• aole4  . a boTe waa place4 ln thl • tacl. . 1 Oopl•• of \he 4elalle4 recelpt1 1t1u4 lo ,he 1e4•ral leHn• laak1 aa4 J.«•Dh tor .lheH a■ouh an la ,he 1 Gol4--0.aeral• file. lhq lacla4• $1),800,151 la pl.4 held abroad 'b7 lhe 1ecleral IH•n• laDk ef lew Tork which nbHquen\q __•caae par\ of lh• tlral p14 pvohaH4 )T ,ii. lla\llhaUoa rua. IH pee• ~ . (OolltiJ'I Jaaa&r7 )1, 19)~. file woritac ot the 014 t20 1014 cenl2 fr•••U7 Pre11 tlcale • • •• f ollowa: 1 'fhll oerUfl•• \hal '1wN baTe hea 4epoli led la the !r•••V7 ot ,he Uat,et Hat•• of Aaerlea twa,7 tollar1 la pl4 oola pqalale ,o the 1-arer oa 4ellall4. • fh• coad4eraUoa1 lea41-c lo \be chaa«e la vor41a« ot lhe pl4 cerUtlcat•• are .., tor,h lra a ■uoru4a fro■ Ir. i.11 to th• ••cr•\aJ7 of Sep\e■'ber 11, 19JJ, whloh te la \he 1 Gol4--haeral' file. Federal Reserve Bank of St. Louis  hl•••  10  th• 1014 held 1A cu1to4J 1A \he General Jund tor \he Redeaption hnd acainat lederal R•aene lot••••• brouch\ into \he Gold Account. an4 J'und ••• ae\ up  a■  a 11ab111t7 of thal Accoun\.  \h8  aedempt1on  lew t7pe cold cer\ifica\ea  v•r• 11••• tor thia cold. u4 alao in exchaqe tor \he old t7pe gold cert1!1oa\ee hel4 b7 \he le4eral Reaen• Bazlka!) !he ,,a,nenta of the Gold ACeoun, of the Trea1urer in the Treaaur, Da117 S\al ..enta of Juurr 29 and JO.  1934. ahow \he effect of the tranafera (Table 1).  Joth a14•• of the gold accOWlt were increaaed b7 Jui\ oYer $800,000,000. cold reaen•• of the lederal leaene Bank• were conTerted in Taul\ _~ ·~ ......  ,,  . , '  (  f •. -~ • -  !ro■  fhe  gold bullion held  cold certificate• eyidencinc the 4epoa1t of a certain weigh\ of pH ..  \il.U.ea-.. ·h -10ld. cerUf1ca\u of a fixed dollar Yalue! 1 ) !able  I -- 9014  J &Du.&17  29 •  1941  L1ab111UH  s25,913,t>05.20  Golcl Coin  Gol4 .Bullion  Golt Ceriificatee  1,12b,9b7,919.oo  2,401.b5J,bb8.o& Gold Jund, le4eral Aeaene Jo~z4  !o\al  1,7&1,798,715.79  Gold •••ene (11.s. loh1)  15b,OJ9,088.03  Gol4 la General Jund  182,761,550.44  total  1 )check - ao aa\hor1,7.  "i'ea111E  ~ uacbn1 of-til11--. - coapartnc -the ffrt --of·-the old ad aew cold.  M1Utt•h1, Federal Reserve Bank of St. Louis  11  Juaa17 )0, 19)4  Llabl1Ule1 Go14 Cer\ltlca\•• Ou\1tan4lac  Ool4  1,126,2)-,)69.00  (Ou\114• lb• !rea1lU7) Qol4 Cer,1r1ca,e ruad (rederal ••••n• loar4}  2,567,771,251.66 ~, .)55, 766. 7)  ledupUon 1UD4  (rederal  •••n• lote1)  Gold 2e1ene (U.S. lo\e1)  156,0)9,018.03  135.692,506.44  Gold ln O.aeral 1v.a4  J.  ~.029,092,90.16  total  !otal  !be laolu1lon of \he Gol4 Aequlred lhlder lhe Gold PvchaH Progru ln the Noneb.J7 Gold Block aD4 the DeYalaaUon ot \he Dollar.  On •aaQ&J'J' Jl, 1934 at ):10  p. ■.  lhe Prealdent'• Proolaaatlon reducing lh•  ,ol4 ooatea\ ot \he 4ollar wen, lah etteol.  !he !reatlU'7 l•e41alll7 took oYer  · ,11, pld pvohaeed b7 lb• Jlecoa1truc'1oa llnano• CorporaUon, renlu4 \hh gol4  lop\her vllb lh• rol4 1, ha4 llHlt boachl mMl•r 'h• eol4 po.rob&•• prograa, and lnclwl•4 ,he total la \h• lloneta17 Ool4 Hoek al  $J5  per ouoe.  .lL lh•  1a■e  '1••  lhe ,old lD lhe !rea1ver'a Gold Aocou\ wat reYalud. On  Jan\1&17 )1 a anoraacla va1 prepand la \he !rea1V7  Depan■en\  lng lD round tlcur•• tha\ lh• reYaluatlon voul.4 work oat•• tollow11 Federal Reserve Bank of St. Louis  ahow-  12  Gol4 Belt in Iha frea1\U"7 IU!!!7 )1,  193~l  014 Talua lefor• leTaluaUoa  Ia Gol4 Aoceaat frea1V7 •ol4  Ool4 acqllired.  t35  Talue at per ounce  -~.032,000,000  $  132.000,000  1~1.000.000  59.000,000  61,000,000  -.22,.000.000,ooo  :,.226.000.000 fro■  171.000,000  ft~•'· Gold Acquired  fro■  l.?.0. (Coat)  Ool4 PurchaH4 bJ fre&IUJ7 (Coat)  Profit  2.~.000.000  Jetore \he clo•• of bQtin••• on laaaaJ7 )1 addi\loaal pl4 ••• 4epo111e4 in \he 'frea1ur7 bria«inc ih cold accoul lo t4,o:,4,167, 710 •• of J p. ■.· all4  lncr•a•ln« the ~•Talaallon protU ,o onr $2,105  ■llllon,.  lloreonr. on 1ebrQAJ7 1,  the !rea1ury carried out a auber of gold lrueactioa, abroad.  It 411po1e4 of 2 . $14,5()0,000 of \he pl4 acquired from lh• •.r.c. aa4 l>oQChl •J.151',391 la ,ol.4  Thu• purchaHa hov•••r 414 not appear to  abroad.  lebrua27 2. 3 leannc th• total in  ba•• entered  ,u fr•••vr' • Ool4  th• accounh uUl  Accou\ oa lh• 497 after  lhe reTaluatlon $7,0lS,263,925.70. llaoe Ille ,o14 lla\illltea of \he freaam,- were ezpre11ed. tn col4 dollar•  and not ia \he fora of a warehoaH recelpl for a epeolflo  -■out  of gol4 bullion.  · or 9•clflc pl4 col•• 4epoll h4, lha7 were aot lacrea1ed., u4 coaaequeatl7 the 1 table la •traa..o\loa1--haeral 1 tile. 2 Clleok oaretvl.17 wor4lnc et table la 1 0ol4--tJeura1 1 flle 1howiac 1014 held _b7 ,he frea11117 oa £pr11 30, 1934 u4 pl4 pucha,e4 tro■ \he I. r. O. 3 Oa 1•bn&JT I ,he fn••VJ acquire4 ,0,125 ouc•• et p14 la Parll and. 6o,ooo euce, la J.oalea aooor41q lo a ■noraa4a la \be •0o14--0eaeral • tile. .'-\ t35 per ouoe lbeH a■ouh work eu\ al t).153,375 aa4 I an•• lhe7 are \he - • •• the pm-OU.HI reterre4 lo elanher• ln \hh fll• •• haT1D« been aa4• oa h'"9.JT 1. Federal Reserve Bank of St. Louis  1.3 whole lacr•HI reaulUac froa lhe re4GC1loa la the  aa ref:. , cted la aa laor••• la pl! lael4 la profU nallsH  Oil  wetgh\ of lh• eo14  ,u O.ural 1u4.  !be •••al1:1aUon  Jaaurr 31u41el>raaJ7 l - · $2,105,512.060.17 u4 lh• U•  'Gold ill Iba hural 1u4• Oil \he l>al17 l\ateaea\ lacnaH4 Oil JaaUJ7 )1 lo  4ollar  .,.132,1614,953 oa Je'bru.17 1. On  fro■  f  1e\n&r7 l \he Ool4 Aoooual  ot 11:ae !rea1ver 1\oo4 •• tollowa: 1 LlabtllUe1  Gold Cer\lflca\e1  Gol4  Ou\a\a.a41ac ou,114• \he frea11a17  Gold Cerllfloa\e 1u4 (1ed.eral ····"· loar4) 2,567,627,651.66 ledeapUoll hD4  fo\al  l frea1U7 DalJ.T 1,al•ea\. Federal Reserve Bank of St. Louis  1e4eral ••••"• lole1  ~3.355,766.73  Go14 l•••"e (U.I. lo\e1)  156,039,ou.03  Gol4 in O.ural hD4  ),132,414.953.21  folal  7,011.263,925.70  o.  lhe AocOUA\inc trea\aen\ G1Yen lo \he »•Yalua\1on Profit ln \he Jooka of \he !reaaurer. •• directed 'b7 Sec\lon  vaa ahovn 1n thi Trea1ur7 Da117 hoveYer, \he \abllah an  ■aJor  bchaA&•  7 of  the Gold  State■ ent  ae  B•••n• Act.  the Dnaluat1on profit  & ■ 11cellaneou1  receipt.  Since,  part of \he profi\ waa ,o be 1e\ aaide uder the Act ,o ••S\ablli1a\1on hnd of $2,000,000,000, and the reaainder waa  re1ened for aoa-buqetar7 purpo•••• thi1 ,reataen\ of th• protii vaa 1.n.appropriate and. in  1011•  re1pect1  ■ 1alead1ac.  It ob1cure4 \he true bud.c•t position aa  1D41caiecl in the CoaparatiYe A.nal.7111 of Receipi1 and ZXpendi\u.rea publi1hed on PAC• 2 of ,he  tr•••U?7'•  Dail7 S\atement.  In \hi• atat•ent for Jebruaey 1, an  exce11 of receipt, of  $973,71&,937.20 waa ahown tor \he fiacal 7ear 1934 a,  pared to a deficit of  $1,8&4,940,b&3.53 tor \he 1aae period the preY1ou1 7ear,  thouc}l \he actual budcet 4ef1c1t had reall7 lncreaaed 111ghtl7. balance in the Gener&! Jund waa al10  co■-  !he large aet  ■ i ■ leadiq.  Con1equentl7 on Jebru&.17 28 the Trea1u17 \ra.naferred \he deYa.luation profit. which had b7 then lncreaaed \o $2,S08,221,l37•09~from ,he General and Special Punda (Bude•\) aid• ot the l)ail7 Statnen\ to \he !rua,a &D4 0on\r1bu\e4 Jund• a14e, vh1ch waa g1Ten \he new title •tru.1\1 u4 Con\r1bu\e4 ltul4a and Incr•en\ 1n kld■ !)  On the d.ail7 a,ate■ent of h-ruaey 28, $2,808,221,137•09 wae deducted  traa Miacellueoua Receipt• of General and Special hD4• and added \o \he receipts  of !rua\a aD4 Oontrlbuted l'und• Iaor ..ea\ in Gold.  Ctn1equen\l7 \hi• a\at ..en\  l)1e■oraA4ua froa Under Becre\ar, Bell \o secre\ar7 Mor1enthao., rebruar7 28,  193~. Federal Reserve Bank of St. Louis  15 lhowe4 aa uceH of ezpea41'm-H o••r reoelph et General aa4 lpeolal ~ • tor the thoal 79ar 19)4 of t2,)52,170,2)9.~. wber••• on J'ebrua17 27 U ha4 •how~ • •vplu et  ca,ed..  •~71,961,717.93,  aa4 ,11e lne bQ4cel po1llloa •• aoova,•17 lad.1-  bpea41tvea ohan«eable to the 4e•aluaUoll prot1, ••r• lheaoetorlh to be  lr•,ecl •• ezpenc!UvH  tro■  !rut• u4 Coatrlbu\e4 1acl1 u4 laor•••' ta Ool4  u4 •llataatecl fro■ the lta4get a14• of ,he Dall.7 ltat••Dt eaUrel.7.  espea4UvH were  lo1H1  Aaoac lhaH  on eol4 •lUac •• lheT accru4 an4 \he ltabllhaUoa  hat, the 1-.lanc• n•laiiac at \he 411cretlea of lhe SeeretaJT ule11 apeclall.J  approprlate4 b7 Ooagre11. 1 ) fill• narranceaent ot lh• .Aocou,1ac freat•nt of \he ,o14 laor•ea\ 11111  let\ lhe awollen net baluc• ln the Oen.eral ha4, pea4la« \he ac\ual eeta'blhhaent of lh• llabilt.saUon J'ud, aad th• 4lepol1Uoa of the balance of lh• aol4 lacr•■eat  III.  fer lpeclal pm-potea. the ~abll1haea\ of \he 7an4. Oil March  17, 1934, lhe,ooo,ooo  appropr1ale4 u4er the Qol4 hHn•  Ml of 1934, tor lh• e1\abli1haenl of u hcbance llablllsatloa 1ua4 \he ezolullff coalrel of \he Seon\&17, ••• aad• a•allalll• \o  Ill ■.  aaoaat wat l11ued 1'7 \he hea1urer of Iha UnUe4 lta\e1 unler a aeat Warru\ &114 •4• pqa\le lo th• leore\aJ7.  1 A·tr•••V7 ...ord4a of  29, 19)~ la  A oh•ck for \hh  h•••V7 SeUle-  ft• ha4, howner, ,,., aol  1 hl4--Proce4ure  and PollCT" t10,ooo,ooo of lu 4nalulloa prot11 ••• ••' a1lde •• • fll• la4leal•• NHne lo lake oar• of 1011•• \hroQCh a\raaloa. Federal Reserve Bank of St. Louis  ,1aa,  Ju.aar,  th•  16  the firet atepa were taken  Oil  April 16.  Oil  that 4q \he Seoreta?7 re-  turned the check for $2,000,000.000 to th• trea1urer with \he reque,, \hat two new check, ahoul4 be 1Hue4. on• for  ti.999,900,000 lo  be helt pen41nc further  lna\ruc\1ona aa4 one tor tl00,000 to be put 1n a 41•bur•1nc account in the naa• of Ille Secre\a17.  A check1AC account w1\h the !reaaurer (87abol 17-blO) waa  opue4 b7 th• 4epoa1\ of the check tor $100,000 aD4 4ea1pated •secreta17 of th• !reaaur7, bcha.D&• S\ab111aa\1on Jwi4•.  P•n4iq \he pa111ent into \hia accoUAt  of th• bulk of the Jund repre1en\e4 b7 the aecoa4 check for $1,999,900,000 \hia check vu aot ahow u u  expeD4i \ure  fro■  the 1014 1aornenl 1a \he Tru1 t and  Oon\ribu\ecl. hn4• ••olion of \he Da117 Stateaent bill, wa1 \reate4 •• a Su1pen1•  u ..P Th• Secre\&r7 waa Ul ~: placed 1a a poaition \o •••' the prel1a1nar7 ezp•n••• of orgu111nc th• a4a1n11tratiTe aach1ne17 of \he lund and d1atr1bute4 the $100,000 uonc \hre• 411burdq accOU11h.  •93,000 waa depolitecl in a  dhburlinc  account deaipated bcha.D&• Stabili1ation Jund, D1abura1o.c Aocoun\a, Secretar7 of the Trea1ur7 (S711bol l7bl5) which becaa• the ac\1•• checkinc aocoun\ of the Stab111sat1on Jund ¥1.lh  ,u  !reuurer ot the Un1te4 Stat••• and the reaa1D1DC  $7,000 vu 4lT14•4 be\ween lwo aaall aocounta in the naa• ot Special  »1abur ■ 1nc  Ac•nta.  On April 27 ,he S\abiliaa\loll lWld waa toraall.7 ••' up.  1 )1 1afer thia - check correc\ accoun\1q \era. Federal Reserve Bank of St. Louis  Th• Tre&aurer••  17 oheck for  •1.999.900.000  waa 4epoa1\e4 1n th• account 4ea1pa\e4 Secretar1 ot  \he fr•••V7 Kxohanc• S\abilhaUon ltm4 (l711bol 17-bl0) aDd \he total aaoun\ pa14 ln\o \hi• account, $2,000,000,000, appeared in the Da117 S\ateaen\ ot tha\ ~  •• u  expen41ture under the hea4izac trua, and CoDtri buted lunch and Iacr•-  aen\ la Gold.  ho check• were drawn on S,abol 17&10. on• tor $99,900,000 which  waa 4epoa1te4 in the Secretar, 1 1 Ac,1Y• checkinc accowit with the !reaaurer  (S711bol 17-bl5), and one for $100,000,000 vhlch waa 4epoa1ted in col4 certificate• in \he Gold CerUtioate hn4 (lederal lleaerTe .Board) b7 the freaaurer ot \he Un1te4 S\atea for \he credi\ ot a new accoun\ \o be opened b7 the Jederal  ••••"• Bau of Iew Tork and de11pa\ed •1ecre\&r7 of the !r•••VT, Special Account•. !h• $2,000,000,000 paid to the Secre\&17 bf the !reaaurer of the United  Sta\ea vaa \hua 41Y14e4 into three parta:  An acco'Qll\  ot tl00,000,000 with the  lederal Reaene Bank of In Tork, 411bur1inc account• wi\h \he !reaaurer aaount-  inc at ,he outaet to tioo,000.000, and an 1nac\1ye 4epo11t with the !reaaurer ot $1,S00,000 1 000 (S,-bol 17-bl0). hea41nc  va ■  Ua4er 1natruc\ion• froa the Secre\ar7 a new  added to the Liab1~1t1•• a14• ot the !Nam.rer•• Gol4 Accot111\1v1,h  \he 4ea1pa\1on 1 Sxchance Sta~111sat1on Jund•. which wa• \o ahov \he balance in S711bol  17-blo~>an, •1.soo,000,000  :run4 to th11 new account.  in gol4 va1 \ran1terre4 froa col4 in the General  Gold in the Gener.i 1un4 vaa further reduced b7 the  •100,000.000 4epoa1\ed in the aol4 Cer,1t1ca\e Jund ot the Jederal for ·the credi\  Ke ■ en•  Jaard  ot \he Secretar,•• nn Special Account al \he lederal Re••"•  i)te,ter ot secre,ar, Morgenthau to \he treaaurer of the Uni\ecl &tate1,Apr11 27.  19~. Federal Reserve Bank of St. Louis  13  lank of  •ew York,  aD4 the 411bv11nc account, ••r• 1nclu4ed aaonc lhe llablll11••  of the General hn4. under the hea41q 8 Depoalta of CloTernaent ottlcer1, Po1taa1tera, Clerk• of  th•••  eov,,.  etc.•  tran1ter1 were all canle4 \hroa«h on April 27, 1934, an4 are re-  nt  between April  t  101  flected ln the tollowin« change1 ill the 'l'rea1ur7 Daiq state.. u4 -rll  27. (in  1.  ■1111on•  ot dollar•)  In the Gold ~count (Llabllltie1) Gold 0.rtlticate 1Wl4 of the 1e4eral le1ene  Board ~zchance Stab1111ation  ~  /,1,SOO  Gold ln the General 7UD4 2.  -l,901  In ,he General 1'mcl  Llabll1Uea -1,901  CJol4  Depoalt1 - Poataa1ler1, Clerk• of Court,, Dlaburaing Ottlcera, etc. let kluc•  !he lecretaJ7' • Special Acco'Wlt a\ Uw 1e4eral ••••n• lank of Sew  Tork vaa 1nclu4e4 at the ouhet in \he U• OoTernaent Depo1U• oa \he balance lheet of the Bank, and. thla 1tem 1hoved an lnor•••• of •150  between April 25 and Jla7 2.  ■1111on1  Jut after a few 4&71 the Sl)eclal .lccount va1 ln-  clme4 Wlder •other Depoa1,,• aD4 lh• balance 1heet headlnc <k>Ternaent Depo1it1  va1 chane-4 Federal Reserve Bank of St. Louis  ,o  United Ital•• !reaaurer, General Acoout.  26  •·  fhe lecreq of \he h.n4 • • OperaUoDa. !he $200.000,000 which oonati\ute4 the aetlTe part of ,he ltab1111ation  hn4 wa.1 b7 \he••  ■e&lll aade  aTa1lable to the Secretary wl\h a  clo1ure lo the public ot \he actual 41spo1ition Md• of 1\.  atni■ am  Once in act1Te  operation the \ran1action1 ot the 1und were etfectiTel.7 1creened.  ••••t• were diTided between two Po1taa1ter1,  Clerk■  ot 411-  It, dollar  aceount,, •Depo1it1 ot Oo••tuent Otficera,  of Court1, etc.• in the tleneral J'und an4 •Other  DeJ>••it•"  at the 7ederal Re1erTe Bank of Wew Tork Jthrouch which aany other tran1aetion1 wer• pa11ed..  the 1\Uld  ■ight  N--  Such gold . 111Ter, go•ermnent 11curltie11:1l foreign ezchan«• aa  acqtl1re would not be ahown in  and until the Jund made public III.  u,  &D7  publi1he4 1\atement1 unle11  own balance thee\.  'l'he Pover, of the Jederal Besen• Janka to Bold or Deal in Gold Wlder the ReaerT• Act of 1934. 'rhe«•• in the  ■onetar7  1tandard of the United Stat•• aad• b7 the  Gold Re••"• .let of 1934 and the Procl-tion,. Ordera an4 Begul~tlon, l11ued thereunder were ln effect for nearly three  ■ onth1  before the ~zchange Stabili1a-  tlon Fund va1 deflnitel7 e1tabll1hed and pul in a poai\ion to ln\enene actlTel7 in \he gold, 111-rer and foreign exchange •rketa.  Durln.« \hat lahrnl certain  1tep1 were taken by the frea1u17 atfecUn,; the power, of th• 7e4eral HeH"• !ank1 to hold and deal in gold wader \he  Ac' which bad a bearln« on the la\er  relation• between the Jund and \he federal le1ene Bank of  ••w Tork.  fhe tlra\ of theae wa1 \he aulhorlta\lon ginn to the 1ederal ie••"•  Bau,  to aet •• fi1cal -«9nt1 for the !r•••Ul'J' in \he pvch••• and 1al• ot -~14  ln accordance with the pneral aonet&r7 policy off1c1all7 announced by the Federal Reserve Bank of St. Louis  2C  leCJ"et·aJT on \he 4A7 tollowlng the A.  pa■ sace  of \he Gold 1 ..•"• Act.  Power, to IQl' aD4 lell Gold •• 1hcal Agent of the United Sta\e1.  On lanU&r7  31 the frea1UJ7 annoance4 tbal 1t would  Hll ~14 for erport to  foreign cenlral bank• vhen•••r lh• exchange ra\e1 in pl4 ,,a114ar4 cou\rie1 reached gol4 export point. aak1ng all 1uch 1alH lhrou«h the 1e4eral hH"• lallk of Jew Tork a1 fiacal •~•nt at  S35 per ounce plu1 1/4 1ubJect to the regu-  latlon1 111ued under the Gold Re••"• Act.!  In a general 1tatement to the  pr•••• ln which he 1mmari1ed \he pro•11ion1 of the Gold le••"• Act, the S.cretary al10 announced \hat he wo\114 bQ1' throa«h the 1e4eral le1•r•• lank of  ••w Tork a1 f11oal •~n\.  for account of the UnUe4 StatH, UT and all «old  del1Tere4 to the Un1te4 State1 Nlnt1 an4 A11q Offioe1 at $35 ■int  charge• lHa 1/4.  1111  the Ullllll  !heH purohaH1 voald be 1ubJect \o co11pl1ance with  ,u  regulation, l11u.e4 ander the Act, and the price wae 1ubJect to oh•~• at •DT time  b7 the Secreta1"7 of the frea1ur7 without notice. On the 1ue 4q \he Secret&JT wro\e to the lederal ••••"• Banlc of lew Tork officlall7 ad•1•1nc it of th••• public 1tat..enta and authorising and r•que1tinc it to act ln accordance with their \ena1, aa4 to  •ak• written contract•  or acr••Mnta with auch par\1•• •• the Secreta17 •i~ht appro•e to bur ~old on the term, indicated or on 1uch other te1'1la •• th• Secretary ■ ight •~proTe.  Thia  letter alao 1tated that no gold held illepli.,! wa1 to be bou«}lt. that the !rea11117 would full7 recoapen•• the Yederal Re••"• Jank of  •n Tork for all aaounta paid  and . tor it• out of pocket exp•n•••• and that the bank would incur  DO  11ab111\1e1  except for lta own negllrnce.  i  - frea1ur, Pre11 Relea11, lanua17 30, 1934. 2 Ia non-coapliance with 1ection1 2 and J or lb• Act of larch 9, 1933 or regalaUoa, \hereunder or vUh th• Ool4 IH•"e Act. Federal Reserve Bank of St. Louis  21  lheM arraac••·'· proT14e4 the Malo MOhaala for 1la\lll1lac th•  tollar exchaqe rat••• other eo14 etaa4ar4 coutrle1, pn•1••4 tbal ao 4••alua'1oaa vere •rrle4 au\ 'b7 each oeutrlH anct lh• lecreta17 414 aot al\er the 1-QTtag aa4  ••lUnc prlc•• •••Uoaecl la hl1  fhe7 al10  two amlouacneah.  eala'bllallect a ralher "14• aprea4 \etveen th• p14 expor\ aD.4 lapon polal1 Nheen lbe Ual\ed S\a\e1 aad. o\her pl4 1\all4ari oou\rlH . 1  !he:, 414 aot proT14• for two ln>e• ot talene11Uon ln tb.e ezcba~ •rk•h, which ha4 beoo• pan  et \he lecbalque et aua«ia« \he tatene.Uoaal gold  etu4ar4 ta lh• pod war perlo4.  0• of lh•H • • lale"eia\ lea 4ealpe4 lo .pr•-  ••nt ra,H froa IIOTlJIC lnperarll.7 1-7084 Iha 1914 potat 1 4u \e lack  I  of transport or  eo■e  elallar rea1oa.  hol4 ezchance ralH at lhe pl4 pela\  ft•  olur wa1 la\enealloa 4ellped lo  for ahor\ perto41 u4 thua preftn\ gol4  •o••••at1 \bat would olherwt.1• lake place, anl vlltch tf  ■ tcht 'be Wlllecaa1arr  the ra\e ooul4 \a leapon.rll7 pege4 pea4iac a ohuce l11 aarke\ oon4111on1 .  ~ledblll\7 et ,h11 1or\ •••• howner, po11lble ua4er lho" 1ectloa1 of \he Act which pana1Ue4 the Neral ••••ne la.Aka'• , ..1 la or ~•14 pl4 •• priactpale. I.  Power• lo Deal l~ aa4 lol4 Go14 aa4er leoUoaa 3 an4 6 of the Mt.  VD4ar 1ec'1ea 6 et Ill• Ool4 leNrn Ael lhe re4eral leHn• Iuka v•r• u.lhorlaed lo red••· pl4 oerUfioal•• hel4 ll, th• ., lull ,1• • u4 la luch •oal1 aa, 1a  ,u Ja4cH•' et tu  leonlar7. var•  MOHl&J7  lo aala\aln lh•  pv~l1DC power ot ner, Jda4 et ovraD07 et Iha UaU~ Ital••·  .u4 u4er  aeoliea) Iha leorela17 •• 4lreo\e4 ,o preaert\e \he Mll4llloa1 1184ar whloh th• 1•4•ral la1el'ft J.u1  ■lpl•. heU. lraaepen. •1' er lreat ,  l■J)Ort.  uport  pl4 tor \he purpo••• of 1etlll11C ta,erna\loul bal&11ce1 . lw!iSii wli =tll!.r fi• · tnnp, 4fltra\l•. ¼ !bere le---.nhlac lit -I lle er ho14 IIB4er  Nna&rk,  fll••-•  ~t p -/~-. \r, (-.r (· l ) "t Federal Reserve Bank of St. Louis  22  !be recaJ.allona P••ntq Ille esarol•• ot lh••• power, were poa,•4  leplber la .lrtlol• IT, ••o•toaa 21 aa4 Juur, 19)~.  file, authorlae4 lh• 1e4eral leHne Iuka lo aaq1llre fer lb•  lwo parpo1e1 epecif1•4 la the Ao\: la  tu  29. ot th• ProT11loaal leplallOlll of  1) pl4 a'broe4: I) pl4 aot hel.4 Ulepll1  tJaUe4 l\atea; and J) gol4 hel4  'r lhe h•••VJ' tor  re4apUoa ot ..14  oer\ttlcal••• l>ut oal.7 in uoaat, 4Nae4 a•c•HaJ7 117 the leon,&JT ot the  tr..,VJ'. !'he replallon epecltle4 Iha\ the 1•4•ral ••••n• Janka eo'114 ho14, ,rueport, export u4 ho14 uader earaark pl4 10 acquired, prort4ec1 lt. after llz aoalha. \hh ,ol4 had ao\ 'Men ue4 tor \he.a• pvpo••• U aut  u  4epoal\e4 with lhe frea1GJ7 la eschaac• tor •ollar orecti\1 pqable la eold  oerUtlcat••·  fh•  !he Act u4  1lz aon\ha perlo4 alp\, how•••r, be enea4e4 b7 the lecre\a17.  ,u  aoU•• role, aubJect to laak1 IA  regulallon1 \ thua olearl.7 coaleaplale4 u \he J'll4.pea\  carmnc eu\. •• prlnolpal1,  ot Iha hor•t•'7• tor th• 1e4eral ••••"• gol4 tr~••ctloaa oouech4 wUh cv.rrene7  1\ablll•atioa, aa4 414 aot en,ru1I lhl• faacllon ezclul••l7 lo lbe 1•4•ral leMrn Janke aa flecal a«9a\1 aD4 lo Ille ltablllsalloa hD4. On Naroh 23, 19.34 the Secret&r7 wrote ,o lhe h4eral lee•rn lank of  ••• Tork ciTiac U a11\horU7 lo ac411llr• gel4 kllloa hel4 la Ille 0.aeral hnd  either lhroagh lh• nlea•• froa earu.rk ot gol4 bel4 •  the la.Dk for \he frMIV7,  - or fro• the ••887 Otfloe, 1 tor Hl• 4lnc,17 er lhreaah talene41arl•• \o foreip oealral  •ak• which 1,oiacht p14 al a tln4 price.  la.oh  •al•• nr• author1•e4  •wuaner aa4 eo loq ••• lh• •scbuce ral•• were 1-low p14 ezport point froa  •n ?erk.  0.14 •• aoqlllre4 waa ,o M pall for 1', a cntl\ le lhe frea1ver ot  •0o1t--O.ural - Jia.rlac aa4 hlllac - Federal Reserve Bank of St. Louis  O•••nl· tile.  •••  23 1peclflecl ba4, 111der Article 4 of \he Beculationa, ,o 'be reao14 ,o lbe !r•a•ll.17  $.35 per oace.  at  1  On the a&11e d.q lh• Secre\ar7 wro\e ,o tba .u9a7 Office  Plborlslq U to 4el1Ter gold lo the J'ed.eral ReHne Banlt the oondi t1on1 apeclfle4.  2  In .&prll 1934 lwo leU•r• were dratted b7 Iha !reaaUJ7 and the 1ecleral Beaene lank of law Tork which broadened \hia au\hori \7 1utticientl7 to penaU  ,he J'ed.eral Besen• Bank ,o waderlake atab111sat1on operation• dea1gud to hold 'h• •xchuce rah• of gold atandard coWl\riea at gold •%port point.  uat,a for  .!!.  proTlded ,hat \he Jederal Jle1ern !ank  •al• to  ■ 1ght  !heH  acquire gold for th• TreaaUJ7  C.11tral &ank:a of gold atan4ard countriea 11' the exchange rat•• were  or Nlow cc,14 exporl point from lev Tork and lf the aold  aold  10  w.1  to re-  place or excbance or currency of countriH preT1oual7 aold wien the exchanr wa, at or below gold export point.  Jenk: ctn adT&Dce noUce to \he '?rea1u17 \hat  u,  fh97 proTided further that  the  aalH of exchange were ln anti-  clpaUon of purcbaHa of gold for •~ort not exceed inc a deflnl h •ount. 3  '!he•• 4ratt, were 1ullaitted b7 Mr.  Logan of lh•  fr•••VT  \o Mr. Crane of  lh• J'ederal Jleaen• lank of lev Tork on April 24, \he dq on which th• Secr•l&r7 l1aued hie lnatructtona for aettinc up \he Stab1111atlon 1und.  lh• ••• ac\ual.17 uecl to auperaede the le\\er of March 23. bu.,  1934 th• Secret&r7 Vl"ote lo  Ieither of  011 A.ugu.a\  15.  the J'ecleral IH•n• ~ of lev York atatin« Iha\  th• au\horbaUoa ctna in lh• le\ter of March 23 \o Hll gold to f oreip oealral ballka when Iha ral• va1 \elow pld ezporl point 1nclu4e4 authori t7 to· acquire auch ,ol4  fro■  the !rea1V7 al UT 1111• for aal•  b7 lh• 1ederal  leHrn Jut •Uher 41recU7 or lhroach lalenaedlari•• lo 1uch oeatral bank•  all4 ,o replace exchanp pnrioualz 1014 al a rat• at or a\o•• gold •zporl l -0014--0.Mral--BqillC am 8ell1JIC' ftle.  2 ~uaacuou---.1ac  3 -r~cl1oaa--lu.,111g Federal Reserve Bank of St. Louis  aa4 s.111nc• f 11•. and Selling Gold• flle.  24 pola,.  1  lb.ii authori~ ~ndUe4  ,u  hderal hHrn lank of Jrew Tork lo  ooopera\e w1 th torelp oeatral bank• ln preTenUac lhe ezchaqe rat•• of eold 1\ud.arcl ooulr1•• troa aclae.117 r•achlAc plcl poin\ an4 cauliac priftte pld.  arltUracear• opporluUl•• lo appear. and enabled. pvpo1• fro■ tba Tr••Rl7 •1 thouI redetlli nc  eold  u  \o obtain ,ol4 for 1h11  cerU.flcat••.  fhh leUer  IIIOMJl\  when ,1ie Parle t/'f ra\e on lew Tork bad. gou _1  2  ezporl poiD\.  .. .  a\oft gold {  · ••• ••DI al a  .  OoDeequntq 011 Aucuat  15 \he federal Rea•n• lank ot lev York  aoqulred 31,51'4 oaaee of gold ($1,212.270) fro• lhe !reaauey of which $1 ■11Uoa wu aolcl \o lhe harul7 !ruat CollJ)&D7 for ehipaent to the llank of 1ranc•  lo replace  15  ■1111011 traaca  eol4 'b7 lbat bank a\ 6.69-1/2, and thl balance  waa eol4 lo Iha Jaaar1 frad Collp&Dl' tor ahtpaent to the IaUonal Bank of  (,~ 'M,1\)C~<-~~s->= '~afl<+,1,.~~o.  lelcia.  -  \}~~ ..,\t1 = ~")."2.t..,"'" ~541..,  laall pl4 ah1plNJlh to the Jule of hue• were aad• in Oil  AucUI 25, the gol4 'belnc obtained  fro■  tm  1aae vq  the Joial cuatoey of the rederal  leHne ~ ' ot \he federal JlHene lank of lev York, ud further ehlp11ent1  were  lo ,he laAk of h&Rc• aD4 lhe luk of \he letherluda up to Sepl••-  ■a4e  Nr 4, 1934, when lhe tr..•1U'7 eatablhhecl aev fl1cal agenC7 arrancaent ■ tor in\enen,lon 1n lh• forelp exchancea b7 Ille hablllsa\lon 7un4. 3 •o further ue appear• to ltian been --4• of \hla M\ho4 at excban«• lnhneaUoa uUl ren-uaJ7  5, 1936.  -  In a441t1oa lo ,heae 11111,.a powera of lallla\lTe 111 ezohallg• a\ab1111a,1on lhe Pederal leaern ~k ot lw York ooaUaud to act, Wiler ri cll7 •0o14--hural--lQJ'iac and S.lllnc--Geaeral• tlle .:-·1 AucU\ 10 \bl 8ecr•laJ7 wrot-e ,o the 1e4eral leHne Jpnl a\ In Tork ainhorhlnc hill lo releaH gold liar• 1'814 la Jolal ou\oq 'b7 \he hcleral leaw.e .&pnt and \he federal !leHM'a laak of Sew Tork tor lhe pu.rpo••• 1pectflecl in \ha leUer of March 23, 1934. 2 OD A.ucaal 15 lbe fecle:ral le1•n• . _ of lw Tork calcw\ed \he aold upor\ polal lo Parle al 6.6926# lfhile lhe Parla !/! rale • • 6.69-1/21. U al10 calOlllale4 \he .,1, upon polllt lo lrua•la ., 23. 7714 while th• lruH•l• t/T ra,e-■ 2).01. o  raUona  3 ... ,_.. 43_ - '",ace ~ \ 3 f \ Federal Reserve Bank of St. Louis  -t ~::e_  25 4e\endu4 llaUaUou, u u  oea,ral 'bank• aa4 la  10••  latene4laJ7 la ec,1, ,raa..olloaa of foNicn  ca••• ln pl4 lranu.etione between forelp oeatral  1-nke all4 ,he 1,a~lllsa,1oa 111114 lhnach ,o14 earurklq operalloa1.  0.  Chaeral  Lie•••• ,o Bo14 Go14 laru.rk for 1orelp Cea\ral Bau,. 1eotl••) of Iha Ool4 leee"8 Ml ,he leoretaJ7 ot Iha  fr•••vr •••  st••n 'broad. laUh4e to penaU \rueacUon, la pl4 for pvpo••• whioh  1  1n hh  Jlldcaent are aot lacoaaleteat w1\h the purpo••• of 1h11 Act.• !be holttnc et pl4  1'.r  ,u 1ed.tral hHn• Iuka  u4er eanaart tor forelp ceatral buk1 wa1  4e...d to be each a pvpoae 'b7 ihe leon\&J7, 'b11t u4•r ••cUon J4 of the Pron-  aloaal bcul,atl••• 1, v • frea1ury le oonUau 1h11 long ••tabll ahe4 cen,ral 1-ntla« pracUc•.  !hh •••  4ou, aa4 •• 1ebruJ7 5 llc•n•• IY-11-1 ••• l11ud. \o ,he 1e4eral le1erTe laAk of lew York authori1lnc it lo truaporl, 1-porl, ezporl, •11 •r lreal pl4 hel4 " l l WMler eanart for a forelp cealral bau, •r •••' lo l\ after JaaU&r7 JO.  1934  fro■  abroad  '7 a forelp central bank. or 4ell••r•4 lo lt for aceout ot  a tonlp cealral 'bank pur1uant \o a llcenH granle4 b7 \he lecreta17 of lhe  freae1U7; aa4 lo eanaark 1uch «old u4 hold lt la ouatod7 tor a torel1n ceatral 2 'baak. • Vl, ,hta lie•••• all earurlrlnc of pl4 al lhe 1e4eral leaene Juke  voul4  ha•• \een lllepl.  u4 e'HD uder 1h  l•n• ,he ov.1\oa&r7  oeatral 1-ak cc,14 ,ranaaoUoaa ••• rea\rlo\ed.  tree4o■  et later-  fraa•f•r• et eana.rke4 cc,14  - ---------------  er nr• penaUh4 ellq when \he C-  oealral 1aaak n,ueUq the \raaafer 1'a4 recel•ecl t,n llo•••• fro• the !rea1U17  I• Mke 11.  -  11or■  fills reelrloUoa  p••  Iha fraa1urz u oppor\ul \7 lo uke aure  I.I. 11.  2 1h11 liceaH ha• ut 'Mea •4• a•allable \o •• n.\ th \era• were 1v.■11arhecl "r \he 1e4eral la1•n• Jaak ot lev York la l•U•r• lo lh corn1poD41nta. The \era, •• 11ale4 la lb.e \en are laken troa a l•U•r froa lh• 1e4eral lteHne lok of ••• tort lo ,1ie luk •f YeaHuela la Jal:f 1936. Federal Reserve Bank of St. Louis  Ulal •uh lr~et•r• u4  ••re  ••re .., oarrl•4 ou, "oealral baak• tor \hlrt parU•••  la MJ'IIOq vUh lhe fna1u,•• pellq Iha\ all eantarW ,olt 1houl4  \e •solulnq \he preper\7  aarat  aD4  et tke fenlp. oeall"al. 1-Dk fer  •~bJ•ot •• tulr la1tru.clioaa  wh•  oaq. 1 !Illa becue a  U •• ear-  .,,er et llnl7  lalere1\ I • ~ oealral .aka parllealarl.T vhea Ille ,ue1tloa et reolpr•clf.T . la 1914 4eallaca •• 11D4er 411ou111oa al lh• ,1..  et,~.  frlperll'•  .&er••••'  19.36.~  •f  Ia ed.4111on '1l• federal ••••n• laDk of In Tork wa1 authorl1ecl on 1ebnarJ 7. 1934 to ~ . •• flecal .,-a, tor the tr..11117, go14 llel4 '7 11 ua4er MJ'Urk for.., foNip io••r•••'• er aentral baak or for lh• leak for·  ,J."  Ialeraallonal lett1....  lh•H oarefull.7 4ettae4 pner1 to 4eal la pl4 re\alaecl b7 Ille 1ecleral Jenna Juk of In ?erk were a au'ba141a17 par\ et th• ceaeral tr...nrt ot \he UV MMl&JT Acl  171\e■  ot the URUecl 11., .. p'Cll lalo eftao, u4er lh• lol4 .... ne  et 1934. VUhlll 1)111 ceural fruevork lh• ltabllllaUea hll4 bad. • UHf'ul  thoQCh rea\ricle4 field of operalloa1, \ul 'before 1\ • ~ la a,q •zchaace elablll1alloa aat1•111••• , ..oa11rate4 11• ueful.aa11 •• a conTelllaa\  piece of •ohiu17 tor aucullac Tarloua apaclal lraneacU••• ln which \ha freaaUJ7 wu 1D\ereala4.  Ue flnt torelp trauaoUoa ••• the ezchaD.p for  allTer ot pl4 acqu1re4 1'7 lhe !reaav7 •• 1abraa17 1, 1934 aa4 e,111 hel4  abroa4 al lh• •D4 of April. 1 !here 11 u  lll4toa,toa la the t1l•• ,o lhow wlQ' \hh pollq • • ad.oph4.  JJ•1o1a-Gaural--Jo.ri•1 u4 lolllac--0.aeral' 1ile. J-  q.  ff·- Federal Reserve Bank of St. Louis  's _{- ~ s s- .  f \ \:- b  PS! II  PreU.ll1aa17 OperaUou aa4 l'lacal  Apaq .lrranpaen' ■ of  I.  'h• ha4 -  193~  the •zchance ot !naa'QJ'J' Gold 1•14 .lbroa4 tor lllnr ud lh• Knt17 of the  Stabillsatloa  ~  lato the lll••r Jlarket.  j,.  the LeplU1 of lilnr PvchaHI lf7 \ha had.  I.  l'hcal .l«ellC7  Arran«e■en\1  tor ,he •2huce of Gold for lll••r  aa4 the Purchaae and Sale of SilTer.  C. the .lct\1&1 hcb•np of Gold tor SilTer ad lhe la\17  of the  ltablllsatloa l'ma4 into lhe 81lnr llarkel. D.  !h• .Jud a1 a Chaanel throqh which J'orelp lll•er wat loaghl  Vn4er the lll••r Pvchaa• Act.  II. UI.  !he J'lra\ I•••et..nta of the Pua. ill Clo•enmenl lecur1Uet.  l'i1cal AcellC7 Arraqaenta for IalernnUoa '7 \he had la \he Szcban«-9 ·  Kart.I. Federal Reserve Bank of St. Louis  27 fb.e Zzchanp et !'NaaV7 0.14 Be14 A\roa4 tor lllnr u4 lh• •117 et ,be  I.  ltabllisallon 11Ul4 lalo  ,u  111Yer llarkel.  -.ea hfen Ille 4naluUoa ot lhe 4ollar the frea•1117 1-pa lo \raa•f•r to 'h• U.Uecl S\ah1 gold acq1l1re4 abroa4 uder lhe ,ol4 purch&.. prop&11  '7 1ebn&r7 7  1 an4  all lh• 1.1)0.)09 ouaoe, 4epod\e4 ., ,11e kAk ot Jaclaa4 l»,- lh•  1e4eral leHne Juk of lew York tor \be  fr•••VJ had 'be•• repalrlate4 ,hroQCh  the releaH ot u equ1Yalent . . . ., of eol4 hel4u4er earurk for \he i.nk of laclan4 b7 lh• 1e4eral  ••••n• laak et Wew Yor~. 2  Trea•'IU7 ln Pari• ••• alto laperte4.3  !he pl4 ac,ure4 bJ \he  In a4d1tlon gol4 puroha••d . for lh• lecon-  1\ruc\loa llaaAC• Corpora\lea abread 'began lo be lapor\ed la 7ebru.rT~ !ovari• the encl et April lheN r-lucl la \be han4a et lhe  'fN&IUJ7  la Londen leu lhd  $50,000,000 1a pl4.5 On Jprll 24,  \he  Pre ■ 14ent  1934 S.cre\&JT llorp1a\hau  a1ad ud e1-ta1ae4 ,he appreYal of  ot the purchaae of ailTer wllh the S\ablll1a\loa 7WM! al \he LoD4oa  aarke\ price up lo lh• ••lua ot gol4 held la Load.en b7 lh• 1e4eral  of lew Tork aa fiacal a«ent tor lhe !rea11U7 ($~.519.000).  6  Ru•n• Bank  On lhe un  4a7  1h11 au\horl\7 wa1 extea4e4 lo 1aclQ4e \he oonerllen of forelp f\Ul41 realised  fro■ the sale at \hl1 gol4 into 11lnr ln J'ew Yerk •• wall •• la Lon4oa. 7 1 Bf JanuarJ 31, 1934. ~.695 emu,•• of gol4 acquired la wndoa ill Janua17 had been to \raa1ferN4. 2 fh•r• h ao 1114loaUon in \he tile5 •• to - , Ille luk of Snclaa4 whhe4 le car17 eu\ Ihle lraa1acUoa.  J 9,1'00 kilo• ••r• lllportecl fro■ Iba JJaak et Ira.ace la 1ebrUJ7 1934. !hie 11 abeu\ ,uee-tlf\he of \he lo\al aoqv.lre4 'b7 \he 'lrea1U17 le Parle. 4 !heH 1-.,.rh et go14 pr••l•ul.7 beach\ '7 ,be •.r.c. aad. \he fre&IUJ"f and alre-47 1acla4e4 ln lh• Mae\&17 pl4 dock ot \he ooua\17 oau1e4 4lftloulUH tor \he 1•4•ral •••n• laak et J'ew York la reporllq l\1 pl4 i■por\ aD4 •zport tlprea. Letter of \he Jederal ••••"• lank of J'ev Jerk \o the Tre••llr7 ·J ebrurr 5, 19)~. •ao14--Prece4ure aD4 lello7• file. 5 ••• pace ·~3 • the 411pe1al of ,~1• pl4 vaa Ille flr1\ ferelp lran1aelton of lh• l\abillsalloa '1aa4. 6 lo r•••••• are 1uge1\ecl la lhe tlle1 •• lo vhf 1h11 •a:hance et ,ol4 for 111Yer waa oon114ere4 te1lrabl1. 7 •ac,14• tile. Federal Reserve Bank of St. Louis  28  A.  file wplUJ  et lllTer  Pvob••• '7 Ille halt.  Valer INllta 9 of \be h14 leaern Ac\ the leorela77 la IIIJ)O••r•4 '• •••11 p14 l a ~ •••••• al ho•• o4 abroad., la •11Ch IIUUr aJM! apea auh ten,  •• he aq •••• • • ' a4Tan,aceou1 la the public lAl•r••t•. aa4 la ••ctloa 10 h• 11 au\h1rl1e4 te 4eal tor accoua\ of lhe S\abillsalloa PWMl la 1014 aA4 tore1p esehallce aa4 1uch other la1\naeat1 et credit an4 ••curltl•• ••  la 1r4er lo 1\abill1e the exchange Tall» of ,he 4ellar. 111aUona lll••r.  u  MT 4eu uc•••aJT  leilher of lhe1e 1ecllea1  Coue41un\l.7 Mr. Norpn\hau vro\e lo \he AUorU7 0.neral on  -'J)nl 24 for an eplalon coneerniac hll power lo 4hpoH of tbe gold held by lbe  lank  of Kn«lan4 an4 acquire 1ll•er in place of 1,. 1 !bl1 11,ter va1 aupplnea\e4 b7 a letler  fn■  the !rea•11J7'• O.aeral  C.an11l, Nr. Ollphallt, to \he AUeru7 General eaclo11nc a ••••ru4u aupporUac a \roa4 ln\erprelaUoll of lh• 8ecretar7'1 povera.  In \hh -•raa4u Ir. Ollpbaat  1 wller of April 24 aol 1• tile bu, la r•f•n•4 le la Nr. Ollphaat•• letter ot JlaJ 14, aD4 the A\toraeJ' General'• lelter et eplalon ot JlaT 29. Federal Reserve Bank of St. Louis  29 1aid that ,he quuUon to 'tie deeld ed. w.u vh~ther t:ie s~or•tA~ wa, authorized udtr HcUon 10  ot \bG Gold ~e,e.rTe Act to tdl eol-i or other a net 1  1n Loudon  or alaewher• and acquire 1il••r ln Bew Tork or o,her 111••r urke\1. bo\h .-pot Nr.Ollpha~, argued tor a liberal 1aterpre\a\1on of \he word •deal•  and futures.  in the !ct and pre!enhd a 4sh1led ar~wrent to ahow that tllTn wu a 11one;y ■ a.terial  and co 1.1ld be aceephd and  ~ .. ld  b:; th• ShbtliuUon Jund.  1 On Jf.~y 2~  Mr. Cmudna• ••nt an opinion latter \o \he Secreta17. in which, at\er c1\1n«  1ectlon1 9 and 10 ot the, he concladed:  •sec\1on 9 ezpre11l7 author1••• 7ou \o •1e11• ,old at hoae or abroad, and th• authorit7  or  aectloa 10 \o •4eal• ln cc,14 ooal••-  plat•• aelllq. no l••• th&?! bQ1inr.  Oon1ider1nc \he reoocn1••4  ••41wa1 of escbance. rou would perforce ••11 pl4 tor (1) ,ol4 or 10m1  fona of obligation or currenq pe.7able la or linked to gc,14,  or (2) 111Ter or so•• font of obl1ptlon or ovreac, p&7abl1 ta or linked to 1ll••r. unleu ■ e\allic  10•  fora of ca.rrenq linked h  DO  atandard or an oblip,ton pqabl• la 1uch ou.rrenq aleo  be cont1dere4. 1  !o \rad• gold tor gold aa a 1tablll11n« opera\ion weul4, I  1uppo1e. accoaplleh aothin«: lo of eol4  ■ 1ght &110  'rad• gold for a  repre1en,al1Ye  fall ehorl ot accoapll1bing th• ln\•n4•4 r••ult.  _In 1uch aanner U uy well be reaaonecl '11at la pa.rUcular clrca-  1luce1 1i1Ter woul4 be Ill• loctcal. perbap1 \he oal.7 reaeoubl.7  acceptable ae4la for th• conertlon of eol4 ln a 11ab1ll1lnc operation.  !here le, ln tact, no More rea1on tor belleTtn« \ha.I  1 - Letter aa4  H■oraa4•  fJeneral", tlle. Federal Reserve Bank of St. Louis  Con«r•••  la •!raA1acUon1. Jann« aa4 Selllnc 1orelp hcba~--  .30  ,  •apeclal.17 1• \hla true et •tabili1atton •• U aay be affttchd or influenced~  •t  \h• prt~• of th~ doll~~ .  •11Tf'I' ,  h  IM  J)U!'T,'Ot~  ttoar.M  lo be aceoapliehed. •Por \heH re~.,ona 1 t h  my orinion th&t 7ou are authori:ed \o  4lepo1• of \be eold mention~ 1n your le\ter and to acquire ailTer  in lieu thereof . "! !he wording of th1 a op1!11o n  WR@  'brott.4 enough lo coTer not only ,he pur-  ohaH of 111Ter v1 th golf cy th!' s~er..-t ~ry. but, ea Mr. Oliphant ha.d argued, t _o  1un4 eow.4 deal for the purpoH of l't .Pl Ubbg the 4oller.  been  10  lnterprehd  It appe~r• lo  ha••  b7 the Secrete.ry for on June 5 the Federal leaerTe Bank of  lev Tork va1 authorised to buy a11Ter for the Jund. not only !rom the procee41 of pld 1014 ab1"0a4, but fro• the Secre\ary'e Sp~cl~l Account at the ~ederal  Under ,hi• broad. interpretation  or  aectione 9 a.nd 10 ot \he Gol4  l•••n•  1.c, the Secretary wa, ln e po,itlon not onl.7 lo uae the Stab1111atioA 1un4 tor \he excha~e ot gold for 111Ter, but lo ,ell \he 111Ter  cbaa• addl\ional •11Ter.  10  acquired and \o pur-  fh• ltab1lls~t1on Jund therefor• became a eonTenleal  u4 eftect1Te ptece ot aachtnerr ln tbe h111d1 of \he Secreta17 for csr171Dg out 10• of the purpo1e1 of \be 111Ter Purcba•• Act of 1934 vblch becue law on  June 1~.  !  In orier io ,et t~l• •~ehine17 in sJt1on th• 4•~•lto" ~d flaeal  "Gold I tile. Federal Reserve Bank of St. Louis  31 acuo7 &r?'ance•Ah 4nelope4 \o can7 ov.\ the or1ctul plan of ••0hu.ciq  eol4 held in London tor ail••r v•r• adapted \o the requ1r•••nta ot tba ltl•er Purcha ■ e  Act.  I.  11ecal Ac•ACT Arrancemenh tor \he bcban«e ot Gol4 for lll••r and  the ?urcha1e and Sale ot lilTer -  1934.  On April 24 the Secretaey wrote to \he hderal leaene lank of lev Tork requat inc 1t ( 1) lo purchaH IJ)Ot 11lnr ln London Urectl.7 or throQCh acenl•  0•'  aa:-ket, but within  ■ucl,  maiiaur  amount■  and pricH (at the currant 4ollar-  a\erl1ng exchang~) ae 1ndicate4 in apecific inatructiona \o be «iTen tro■ ,1.. lo 11• bT the  rrei ■u~(2)  \a 1ell the  $4~,589,000 gol4 hel4 abroa4 Wl4ar  ear.ark for the frea1 u17 in aaounta auff1c1ent lo aake \beae purcbaae1; ()) \o  ••leet allTer 4epo11tor1e1 in London, subject to th• approTal of the hcreta17,  and pa, all reasonable char«•• of tranaportation and 1\orac•  and  co1\ ot \ran1-  porta\lon tn,o the Un1te4 Sta\e1 when 10 directed b7 \he Secret&r7; and (4) \o 4epo•1t, •• fi1cal • ~• nt of \ he United State,, balance, accrui~ tro• the ul• ot pld and no\ 1amed1ately uaed ,o purchase 111Ter, ln u:, bankic« 1n1\ltutlon1 in London which ha~ been desi~ted •• depo1itorie1  or  the Un1\e4 Stat••·  !he  frea1ury apecifloally directed \hat th~•• aterli~ balance, ahould be kepi at  a aini~um.  '?he follovin« da y the•• ln•truc\ion, were extended to conr th• pur-  chaae ot apot ail••r ln lew Tork.  !he 1ederal ••••"• lank ot ••~ Tork and it•  agea\1 were au\hor118d \o adT&nce, et current ratea of 4ebi\ 1n\ere1t, awaa needed  to ·coTer \he oo,t of a1l•er ln I@~ Tork and to relaburt• \heE1elTe1  fro ■  the  procee4e of ~old aol4 la London at the Mrket rate of exchange without profit or 1011 lo th••••l•••·  !  /'fh• frea11117 al10 authorised.,  eftecllTe Ma, l, \be purchaae  Oont1nae4 la \he S.creta.J7'• leUer ot Nq 16 lo ,he 1e4eral leMne Ink ot I. T • Federal Reserve Bank of St. Louis  32 !be tin et lleoaUa  au.  h14111l4 u4 the . .,1e. .1 ProTiaclal luk, Lt4.  •ew  4epo1llerle1 wn •••• 1', th• ~•4eral ••••na Jallk et tert aa4 approTed '7 lhe leorel&J7. 1 Iha haraal7 !rul Coap&JtT'• LoD4•• uaaoh ... ohoHD •• 4epo1Ue17 tor lh• 1lerllac proeee41 ot the 1914 Nl4, 2 ..,. u4er eral la1\nc-  Uea1 ClTea pv1ual to \heH arruge1..ll\1 the Gaaraal7 fnal Oo. '9pn at once ,o oar17 out lh• p14-11l••r  ••chaAce. 3  ft.ea• fleoal aceao:, arraqnea\1  ••r• aad• htore the S\ab111sa\ion 1a4  ••• actaall.T ••' ap •• April 27, aa4. whll• \be pl4 held uder eanaark ln 4 LeDlloll ••• 1\111 part ot \he pl4 la tba haeral hll4 ef \he fn••W7. On JCq 1  the ()aaraa\7 !rut C.. ef  •ew York a1kecl tor of·f tolal  eollflnaaUoa Iba\ the pro-  ceed• of ihe p14 Hl4 awea4 were b7 law 11114er tbe esclul•• oonlrol of \be  leorela17.5 On lh• , ... 4a, ,ho Socr•laJ'7 pvchaa•4 t14,5()0,000 of lhl• eol4 fr• the !reaaurer ot \ho Ualto4 Hahl, u4 ea lq 10 he \oqhl lh• rnalnlag  $30,os9.047.20. !ho SecNl&rT waa therefor• able to ctn th• a11uranc• roquade4  lh• a letter of appolalMnl ••  ac•al to earJ'7 eul th•  purcha1• of 1Uftr  u4 lh• elher oporaUoa1 lact4eat lo the p14-lllnr exchance. u4 oontlrae4 Iha\  lh• procoe41 of the aal• ef gel4 4epo1tled ln ,heir Leuea otflc• ••r• \Ul4er lh•  oxclu11T• oealrol of the lecrola17 of lhe frea•\lJT and. Iha, lh• l•d•ral ••••rn Juk of lew ?erk•• fhcal apn\ ••• authorhecl \o 4raw apon thn. 1 fbeao wores CbaH Sato DeJ>••1' CeaJ,u7. Jank of Naahaltu lafe l>eJ)011' Co •• I.~IIC Saf• l>epo11' Co., Cbaloal lat• Depo11' C. .• 9aar4laa lat• Depo1U Co •• lowlla, Or••n lat• Depo1U O. •• laU•aal C1'7 lat• ».po,u Ce.  I Letter ef lhe Secre,a17 et Ille froae1117 ,. lh• Oaarul7 frul Oo. ef lev Tork April 21', 1931'. Federal Reserve Bank of St. Louis  .3.3  ) .&. . . .er&D41111  ln  ,u  •Gol4--0.aeral• f11• auwa tha, lh• ,old hel4 abrea4  'b7  the !r•••lU7 ea Aprll 30, 193~ •• •• toll ewe:  Hel4 abrea4 '7 the 1e4eral hHrn Jut et lew Terk tor aooeut et lhe frea1ver et the U.Ue4 llalH (ac~uire4 mMler \he Ool4 leaene Aol) Ink aat llel4 Purchaae4 lhroup \be h4eral la cuetoq tor accouat of ,he !reaav.rer et lhe en, )1. 193~ Vnite4 Jou«hl abrea4 •• 1ebna17 1, 193i.  •••n•  s,a,••  tlto.517,260 fhh accor41 vi lh lhe tact \ha' the Ou.rul7 !ru, C.IIIJ)U7 ba4 becun h oar17 eut \he ezchan«e \efore NaT 1, nt appeal'• laeeulaleal vlth ,he parcha1e of \he whole $44,589,000 la pl4 'b7 lhe 8\ablll1alloa ha4 ea NaT 1, and 11&7 10. 4eta111 ooaple\el.7.) (I han ne\ been able lo r•conatrul  th•••  be 1noerreol. Who \he pl4 wa1 Muehl '7 lhe l\ablll1allea ha4 col4 la \he Chneral JuD4 414 .. , 4ecl1•• oorreq,oa41ql7 while lh• Trea1urer' • balanc•• al lhe federal ••••"• laak 414 4ecll••· !hh nc-  Ii fhl1 11 1aterre4 'bv.l  •et• ellher  aq  \hat \he gol4 vaa ut la \he 0.aeral had er Iha\ N ■ e ad.dtUonal  pl4 lru1acUon1 were earr1e4 eul of vhloh l ahoa.14 lNt checked &ad oorrecte4.  ha•• touu ao  5 Leiter et lhe Oaaru\7 !'nd Co. ot lew tork (•0.14• flle). Federal Reserve Bank of St. Louis  noor4.  fhll  .t ;he •am• ti:ae the 7ederal ReHne !atL; of lfow York ·• u 1natr.1chd  to s new cutod; account for the Stabilisation J'wMi, de1ipa,ed MSecretaey of  purcha~e of allver it. lc.naor. by \~c G-\laruly Tru, Co. wa• \her. .t\er \o be 1 taken fro~ thi, account.- tn )iQ l ~ th• 4••1cu.tloL ot tti, •ccount ~•• obacged  to Stcr•t~17  or  eu,t,47  the 'h-e~su.17 S~ec1al Cua\od.y Aceooa, fl an4 a new Sp•cial  Account ~.:. ~as for ailnr purt~I!-:: for U.• •"'-Jlt of \he 7\Uld. ...,.tre U .6 firat of a aer-1u 0f cuetodJ, accoats ,irr.ic~- w•re op•ned u  ftheH  \he 1v.nd  acq~1reJ Taricu, kin41 of non-d~llar asetta.  of \h~ gold-silver exchenge. t~t as tht· aiher prograr. of th• OoYt.rnaent ln·eloped  Act on J ,.l!la 19.  On  ~ ·. a:  1, t:;:e  ~  before \ t1t1 nationalhatlon ot silver at  50.0l o9nts per owica! the Secretar7 aazhorizeJ. ihe 1edersl leaerTe Ba.nk of lew York to sell tao 1ilYor bo~~t under the •~thor1iat1on to purcha•• vhea eo 4lrec\ed by  IJ)ecific 1natruo\1ona fro: designated o~flci~l~ o~ the ~~rt ~~nt.  lec.reia17 did !lot, howe1"er, b~giil to .ii.pose of  ,·~6  dlver held  !he  b7 \he Plmd until  la\e ln October, vhen a.rra!lge~ents ve~• mai:.e tor expand1JlG a\111 f~ther the !. Letter of Na_.• 10, 1934 from the Tn~,ur~ tc ,he federal leaene lanM". of ·1.-,., Tork (•!ranaact1on• - J~ing and Selling Oold - Geaertl• file)  ~ Pre ■ iden,ial Procl8118\ioa, All.gu1t 9. 1934. Federal Reserve Bank of St. Louis  35  1wl4••  actl•117 la 1"v1n« 1ll••r.  On October 26 the Secreta17 wrote ,vo letter•  to \he 1e4eral ••••"• laak of••• lork, ou au\horistnc lh• baJlk lo pu.rcha•• 111••r for account of lhe 1un4 ln aark•t• other lew York and. London and prn141nc for \he PA7Jl•n\ of a con1111oa of .02 oenta per ouoe on 1uch 111Ter,  ud th• other enclo•inc a fora lelter approTe4 'b7 the Seoreta17. lo be written  b7 the 1ederal Jle1ene laDk of l•v Tork to agenta which l\  ■ icht  ••l•ot to car17  oul purcha1•1 of 111Ter ln urke\1 under the Tarioua letter, of authority to purl chaae.-  I•• Tork wre appointed a• letter, of October 26 and on •••••ber 24, 1934 the au■ber of  fhe Cha•• laDk and th• lational City Bank of aceat1 aader lb•  London 4epo11\or1•• of all••r ••• lncrea1ed ,o ••T•n b7 addi~ ,o the 111\ the reaaininc f1T• bv.llion broker,. Saauel Montagu A Son, Pizle7 and Abell, Sharp aa4 Ylllcin1 and I. K. b~oh114 A Son.  17 \he en4 of \be 7..r 1934 the Stabilisation 1uD4 therefore va1 in a poait1on to bu, 1po\ or fon,~rd 1ilTer in &D7 aarke\ \hrou«h \he rederal le1ene  Bank or lt1 agent,. \he Guaranty Co .• lh•  Oba•• lank and  the lational 0117  Bank. and to hold atlTer eo bou~h\ 1n •~ one of four,eea 4epo11tor1••• ••Tea  1n London and 1eTen ln lev York.  It va1 also in a po11\lon \o ••11 111Ter 10  acquired throu«h the rederal Re••"• Bank of Bev York but no de\alled arranc•■ ent1  had. been made tor 418J)oa1ng  ot 1ll••r in the aarket aA4 DO bank• had been  appointed •~•nts to car17 out auch eal••· !ant ■ igh\  On Jul7 2, 1935 th• Ye4eral Re••"•  ot lew. York 1uba1tte4 a drat\ lelter to be vrt\\en lo 1uch a«ent1 •• 1\ ••lee\ for \he aal• of 11l••r under authorl\7 of ,he lecrelar:,'1 l•tter  ot Aur,1t S, 1q34 1n or4er lo be la a poe1\loa lo act 9uickl7 lf apeolflc · 1 The ••rl•• of lel\er1 giTiDC au\horl\7 lo purcha1• la OOIIJ)Oae4 of the letter, of April 2h. 25, lay 16, Jue 5 and Octo\er 26 tro■ \he leore\aJ7 \o the 1•d•ral Federal Reserve Bank of St. Louis  I•••"• lank of lew Tork.  1 !he Tre&•UJ7 look the 1n1\r~e,1on• to ••11 lhould be 1asuPd.-  new  ,hat it euch  let\er1 were aent to a number of benk1 rlJ.Pj()rt •1~ht arise that \he Trea1ur1 va, ooateaplatin« a cha~~ 1n ite 111Ter polie? and  WE.I  2  ~tti~ read7 \o ••11 1ilTer.-  lt ,herefore ad•l1ed \he rederP-1 Rea@r.e Eenk of lev Tork that it would «o OTer  111Ter w@re conte~l8ted.  In thie pert!ou.lar the det~iled flscel •~ene~ arr•~•-  ••nt1 for StP-~111~st1on 7und c,perst1ons on both 1ide1 of the •ilTer market were left 1acoaplete.  C.  !he Actual !xehan«e or Oold  tor Sil•er t1nd ~at17 of \hP Stab111-  !he purchase of Treasury ~old held @brosd b7 \he 1un4 va1 coapleted on Na7 10. pq9ent bein« ude by drawing on the ~ ' • chec1ctnr account vi lh the  !rea1urer (S,-bol 17-615). drawn ~ on )'~  The tira\ VHkly balance ehee\ of the hn4 wa1  14,l lhovinc that $10 , 732,000 1n ~ld hAd already 'been e:mhanged  for a11Ter. !y June ll thh had 'hen lncreaaed. b7 a further $13,350.000, leaTing ! 'General ~i1cal ~DC7~ file. 2 Memoranda fro■ Xr. La.711n to Mr. 011ph.!~t ot JTJ.17 5, 1935. (Q~n•r~l 11,eal Acenq file) l On 1h11 date lh• a11et1 of \be act1Ts par\ ot th• Jnnd w•r• d11\rlbuted al follow•:  .135,875,000  Dollar•  Special a/c - Y.R.i. of I.Y. Treaaurer of ,he U.S. (S,abol 17-615)  $100,0CO,OOO  33,169,000 6,000  Dtabv•t~ Aocounle  Ool4 - lpecial Cudoey a/ c s.t F. ti. F. ot I. Y. fl  ••r- • a,  •  • •  •  33,859,000  .81 l f2 1oreian Jxcllanee-111cal Agen07 a/c of 1.1.~. ot I.T. OaaJ-a11ty !nal Co.  10.690,000  U.S. GoTarD11en\ ••curil1••  19,500.000 Federal Reserve Bank of St. Louis  4o,ooo  37  nall.v contempl~ted  WP~  not cr..rr i ed further, but durinr. th~ ••%t two week•  under Putb~rit~ of the s~er~tary•~ lett~P of Jmt@ 5,  anr  pAir. for~., de~!te to  the Secr~t8~•~ ~?~cirl Aceot:nt. pt \~r. Frd~r~l nPeerve Br-~i of  44.80 eect1 ~r. oWlcft.  w~w Tork.!  Iu  In June t~1• wa• imported into the United Sta,•• and 2  held ln n lp6eia1 eccount for the SecrE"·tFJT b;- thr. /\s~r Office.-  Under the SUtrer P, P.e Act.  !he ~eekl~ btlance sheet• of th& Fund 1how that it& holdia«•  or  gold  and •11Ter were Yir\U6lly unch~nged fro~ June 16 to October 22, 193~, but•• October 2f th~ Jund to ect as  P.  cb~nr.~l for th~ puroh,~e cf t!lver abro~~  ant !. t, Er.le t.o tr.f' Trep.1urer of the United Stat•• under th• SU·nr Purchase  Act.  lot only were the thcal ageney and depoai\017 arr~••nh for \he pur-  cba1e of eilver further expanded a1 noted aboTe, but the Nle of 111Ter alread.7 acquir@~ ~&e begti.n.  o~  October 2f ~r. Morgenthau wrote \o the Mlat authorl1iac  1, to aell the 67 million ounces h•l~ fer th~ Fund \o the !reaaurer a\ \he rate o! 5 a1111~n ounc•• per week till 50 ailllon ounce• were deliTered. traneeetion wE-.r • purchue  bz  the Secrehrz under eecUon  3 of  !bl1  the Stlv~r PurcbaH  1  - Io re~son• are 1ug~••ted in the fll•• for \bl• ehan«e •f policy.  !  w,t•r• of the Secret&r7 of th• Trea1ur7 to ,he Director of \he Mint and S=•rtntendent or ,he A11a,- Office. June 13, 1934. (•Ba_.,,tnc an~ !F111n« SiiTer st fil~) Federal Reserve Bank of St. Louis  Act of 193- fr• lh• Stab1111atloa J'ma4 at 50.01 oea\e per euce, aA4 lb• proceed.a were cre41\e4 to Iha  had'•  oh•cklq accou.t  freaaver.r On Dece■'ber 21, 1934, whea -.5 ■Ulloa  ( ■711bol OUCH  lecret&r7 laatr11e\e4 \he Jllat to ••11 lh• reaaialac 5  17-615) wllh lh•  !la4 .... Hl4, lh•  ■illloa  •uc•• mMler  -thorl\7 of hl• letter of October 26, an4 lo lran1fer \he b&laac• of 17 e1111Ce1 \o the 1ml4. 2 fNaaver.  ■lllion  !hie balance••• \hen aol4 41rec'17 'bJ \he 11U14 to \he  1h11 whole \raa1actioa -  ■al•  of gold, pvchaee of 111Ter abroad and  aal• of allnr \o th• !rea1urer at 50.01 cea\1 per ouce - 71•14•4 the Stab111•atlea ~ a profi\ of oTer  j  SJ-1/2 ■illloa,. 3  Ia \he •aa• week in which thl• ••rl•• of all••r tran1ac\loa1 wa1 ple\e4, \he 8tabll1sat1on Jlun4 again beCAJN a b~•r of allTer la Loa4on.  co■-  !hia  waa \he flrd of a aerie• of purchaHa la which U ac\e4 •• the channel \hrou«h  which Clln"ea\ purcha••• of a11Ter abroa4 were  2-Latm 2 Letter of l>eo•ber 21 3 I.e\ter of Ja.q 1, 19)5 lJ !hla la clearl.J 1•Ucate4117 ,i.  ••tl.7  ■a4e  un4er th• lllTer Purcha•• .&c\.  \aluc• 1lleeta, which abow 11lTer hlaa 'beach\ abroa4, hel4 t.a Loaloa tor ahori per1o4a, l■por\ect iato the Ualtecl Stat•• aa4 aol4 to lb8 hea1ver u4 replace4 '7 freah J>Vcha••• abrea4. Federal Reserve Bank of St. Louis  II  39  •1n r,old f!Dd tore1,n azch~n,:e ~nd •ueh other ln11tr1menh of crt-~U ~ s~eur1 -  tte1 ~• he  ur  4eer.  n~c•••arr•  tor the rurp~•• of •tPbtlir.lnr th~ e%eh,n~e  •the fund thall be ••allable tor"e under the 41rAr.\ion ot  la oou.ctton wit~ cermnr. out the ~ron11on• ot 1h11 eectlcn. ln-  United St~t•• of any ~ortlon ot th~ fund Y~!eh th~ Se~r~t,ry of th•  all urn1za,• ~nd iatere~t aceru!~ ~..nder the operatlnn• of thl• aee-  Uon ahell be paid to th~ tune!  ~n~  be a,ra.Uable tor th• ptlJ1)nHe nt  tb~ ftJJ1d."  It va• therefore ~o•~ibl• tor the .1und to enter the Go••rm:ent bond. ~arket for two  ~ury,01e• -  first to influence the ,tate of the aarlcet a• parl of  lrti1tment accoUDt1.• 1 [J1 \bit tor~ ot 1tat~2ent correct? All ~h• $20J ■illlon ••• a114• for abcili•atlou optar~Uou. Uu ot part ot thh \o purchaH OoTenll!ent bond• 41d not r•~ntr• \he eon,eni of the P~@ld•n\ ~• f~r et \he ttlee indiete . Doea aeo\lon lO{b) refer to po11ible u1e1 of lhe inactin pert of \he llmdf/ Federal Reserve Bank of St. Louis  ••t  4o  fl1•••  ••ct1one ot the Act •••t•4 1n \he Seore\ary the power \o carr7 out •open  aarte,•  operatioR■  ln Gcn-ernaent boad.1 \hro~h \he S\ab1111ation 1un4.  ••arln«• held before 'h•· lenat••• on Jenkin«  and Curr•DC7  In  ln JWle 1941  Kr. Morgenthau reJected the Tiew ,hal auch power• ahould be rea\rlcted to on• GoTeruent a_«eney, \he federal leaene Joar4, bu\ llade 1' olear \ha\ \be pon1 bilit7 of conflict between the !reaaur7 an4 \he 1e4eral Rea•n• author1\1ea in the conduct ot 1uch opera\loDI had been eliminated b7 clo•• cooperation between MoreoTer he aad• \be unequiTocal 1tAteaent that the prim&J7 purpo•• for  th•.  which the hnd bought and held GoTermaent ••cur1t1•• wa1 to obtain earn1nc ••••ta.  leferriDC to the OoTernment ••cur1t1•• hel4 'b7 t h e ~ at that tl••  Mr. Morgenthau 1a14: •ve  ha••  a■oun\  them \hare to turnhh a certain  lh• expen1a1 '1lat ve incur.  I don't haTe lo  ha••  of 1nco.. a«ainat \he■.  I like lo  teal that lhere 1• enough 1nco•• \here to pa, our 110nlhl7 billa. like. vhere••r I can, to  ha••  I  enough income to take care of \he a4-  ■1n1atrat1Te expen1e1; that'• the onl7 purpo1e.•! When th•  Jund•••  ftrat e1tabl11hed th• 4e11re ot \he Secreta17 \o pro-  Tide it with earning a11et1 wi\hout makin.« tbe Jund an act1•• tnfluenc• in the GoTernment bond E&rket co1nc14•4 witb the need ot certain other Go••rmaent agencl•• which bad GoTermnent bon41 to ••11.  Before the 1un4 waa eatabli•hed  the Coaptroller of the Currenq ••• tacecl with th• probl•• of 411po11n« of ~  Coaaola held \o ••cur• the aolea of ia1ol TH\ •auonal Janka.  fr•••UJ7.  In J.pril be  fh• !r•••~rr could •••· ~uioua lo 1ell $20 ailllona of th••• lo \he De.alutloa ot \ha Dollar and Stab1111ation 1ua4. Senate Hearinc• on I.I. 46~6. June 1) aa4 19, 1941, pp. 20-21.  ! Federal Reserve Bank of St. Louis  ~  them either for one of lt1 lnTe1\Mnt aooount1. or tor lhe Genarel Jlun~ .  It the Con1ol1 had been 1014 lo \he General J'und tnq would haTe ~•n retired , an4 thi1 mi~t haTe indicated to \he public and to Conueu that ,here va1 a c ~ • of policy with reprd to th• retlr•••nt of Bank no\ea.  At a  ,1.. when Con«r•11i0Dal pre11ur~ va1 1troo«l7 for inflation rather than defla-  tion, 1uch a 1tep •i~h\ haTe crea\ed an l11pre11ion not 4e11red b7 the Trea1ury, •••n thou«h the balance 1n the General Pund va1 &11Pl• to bU7 \he $20,000,000 Con1ol1 ottered.! Under th••• circa1tanoe1 it va1 nry conTenient for \he Comptroller ,o ••ll them io an •tn•••t••nt account UD.der lhe control of,~ fhe flret 1ub1tantial ••our1t1•• tranaactlon ot th• Stabilisation  SecretaJ-7•1.  .fund, therefor•. wa ■ \he purchase of $19,500,000, ~ Con1ol1 at par fro■ the  Oo11ptroller of the Currency.  Pa.79ent vaa u4e b7 d.rawirv, on the account of th•  fund with \he Trea1urer (S,mbol  17-615).  On Nay 16 the Comptroller aaked the Secretary to arran«e tor bida to be 1ubllitted to him through the Yederal Reae"• Janke for about •10  3~. J-1/!i bank•.  and  ■ llliont  of  3-3/S,, frea1UJ7 bond.a held to aecure the circulation of in1olTent  !beH bond• were 'bou«ht b7 lh• 1e4eral  l•H"•  lank of ••• Tork for the  Stabilisation Jund on MaT 18, and pai4 for from the Secretar7'• Special AccoU.Dt vUh \he bank. operation,.  Thia vat \be tira\ uae- u4e of thh account in  !he fir1t purchaHt of  11UM! were alao ude at th11 \ime.  Oonrn■ ent  On  &D7  of the J'und' •  bond• ln the open urket b7 th•  Na7 21 and 22 it bo~ht a total of $5,000,00  !r..•UJ7 3'• and )-1/S'a \hrouch the l'ederal leeene Bank of lev Tork.  On~  23  lb• 1arm Credit A4111a11tratlon offered $2,!15,000 ln OoTermnent 1ecuritie1 of Tarlou l11ue1 to \he Secret , which he bo~\ 41rectl for the Jund at rice ■ _ •aoran4a lo Mr. Cooll4ge 4atecl April 14, 1934. trnllped ( "InTHtment in United ltat•• lecurltie1, General• tile. I-"-:  - i..,,_., Federal Reserve Bank of St. Louis  42  ln line witb tb• aarket as quoted b7 the 1ederal leeene !ank ot lew Tork. between Na¥ 18 and  MAT 23 t13,  !hue  in fre~1ury bonds -..k~p\ otr the ■arket  by the purcha1ee of the Jud fro■ Oovernrent AP,'encl•• and $5,000,000 were bought 1 ~d NM• . . .hfte• conby it in the market the 1eder&l Reaerve.-  c•rn1,ng tee ma~ eff-e-ct of ,hh •ubuanUal e'1:Dr,or,.:..7 lo further purchs.1•1 of OoTernment ••cur1t1•• other ,ban~ Con1ol1 and  Panau 2'• were mad• du.ri~ 1934.  o~  ~~  l~ the Trea1ury 1dop\ed th~ ~ol1e~ ot  bt~Ging for the•• i1sue1 when offered for eale by th• Tre~au.rer in co~neetion  with \he dl1po1al of bond• pled~ed bT in1olvtnt latloDal &nk1 to ••e't.l"e roatal saTin~• de~osita.! fh• flr1t purchases of \hia ,ort were ~ade on kq 1g.  !re  fl.Uld aleo con\in~•d to bUT Conaol1 fro~ the Comptroller, $3,000.000 b•l~ bour,h\  on September 13 and ~ain on December 14. and •~aller •aount, tn the int,nal . In  ■ak1~  \heae p12rcha1e, th~ Fund ueed its account with the Trea,urer ot th•  United States when it submltte~ bids directly \o other Go•ernment ~•nc1••• and 1\1 account vtth the Jecer~l Re1erTe Ee.nk of Ne~ York vben 1t 1ubalitted bide throu~h that ban',: . By t.he end of  1934 th~ J'unc. ~d ~urchased e44,52q,c1c  Tlflr Tl'l~ of  Qoyernment 1ecurfue1, all but $5,000,000 of whic~ were bo~ht from otter GoTern-  · ·· _ ; _ . : :-: - • r ·'.· · :..-r. t •.- :~ . c·-- -: . '-'i:-:·. ~ ~ -.. f .: , :·~f-·· : ! ·_·· ! !here l• nothin,, 1n the t11•• to indicate \he rea1on for \he 1und'1 p\lJ"cha••• in the open u.rket. ~ M•morandum of Me, 14 to Under Secretary Oool1dce (un11gne4). •tren1&etion1 in United Stat•• GoTeruenl ••cu.ri\1•• - 0.ural• file. l S\et•~8nt of ,ecurttie; held b,- the 1u.n4 on JaAuaey 10, 1935. (InaolTent lattonal Banks file). !here had been no chanse• between Dece1tber 31, 1934 and Janua17 10, 1935 . On both dates the GoTernment 1ecurltle1 1tn on \he balance 1heet •••  ?anama Canal bond1.J.  $45,067,000. Federal Reserve Bank of St. Louis  43 tor zf, bond, beari~ the circ~~tion pri•il•~ ~• ~  a:1  earninr, asa~t for t ·'l• 7:.m-:.  ••lec\ing ih••• l1•ue1 for purehaa• fro~ li1ta 1u"tr-itte~ by other 1JoT•r~~~nt  •~ncie.l, and on l&Auary ll,  1935 tb• Federal a1••n• EAnk of B~v York  ~a•  lnetructed to aell all the 1ecaritie~ held by ;be Jund •%cept ita ?,~ Conaoli and 2; fa~aa ~ l 'bond•.  1935,  'fh•••  aalu vere c.1rrie~ oi:.t fro• Januer, 12 to Jan;u r;r 21,  fh• -~-- hP- -W»•aeury KAll-• wee (now fi-nJ• aJMI -i u J'-..;4 maff a ~: r'>f1t  of $230.0CO.~ III.  1hoal .&gea07 Arruc••nh tor In\enenUon '7 \he Jund. in th• 'lxchan«•  Market. On Sep\nber  4 ,he Secreta17, with the oral appro•al of the Pred4entl  author1••4 the 1e4era.1 let•n• Jalllc ot ••v Tork•• fitcal agent of tbe United Stat••• actio« 41recll.T or ,hrou«h 1uch a~•nta aa the7 ~ht ••l•ct lo 4eal in tor•i~n excbanp for account ot the Stab1111atlon '1m4. !hi1 letter e1tabll1he4 \he baalc fl1cal -«ency  latenent1on of ,he 1un4 in the exchange  ■arnt  an•n«•Hn\a for the  anc! contained the follovinc  po1nh: 1)  !he B&llk vaa authorised ,o purcha•• or aell or  a«r••  ,o purcha•• or Hll  for the account or \be 7und foreign exchange, ( lnclwUnc torelgn coiaa and cu.rrenc1•• 81¥1/or \he colna or bullion into vhlch euch ooiaa •l~ht be coaTer\lble)  for preaent or dellve~. 2)  \o  be  f y kinda of e210han«• ,o be 4ea1' la, the rah• and the aada\1.11 uounta  boU91t or 1014 v1th1n 4ea1p\-4  ti••• and  at 4••1pated place, would be  ~ ~ e f ~ ~-tae-1._.._...fvtb111L ,v.,i,=-ort- ,,,.. 11eMed. !JteaoraDdwa of Ma7 14 cl\ed aboT• aD&1 Ne•ora.nca of Deceaber 14. (•rr~n,actlon• ln United State• Secu.ritiea - General• file) !ra,olTent la\ioAal knke tile. Janaar7 12. 1935. lwrittea approTal va1 «iTea oa Sep\•b•r 21. Federal Reserve Bank of St. Louis  aa offlclal of lh• fr•a•UJT 4ea1pate4 bf oon1tltule a  4eler■1na.11on  hl■.  Specific authorisation wo\114  \hat \he lran1action fell Wider 1ectlon 10 of the  Ool4 hHne Act. ))  lhe  fr•••W"7 ao-••4  \o proTld• lb• 1ederal  l•••n•  lank of lew Tork  or Ua 4ea1pahd •~nta the 4ollar1 and foreign ezchanc• required to fulfill all con\r~cta all4 acr•••enta entered into under the au\hor11ation and to p-.y all  out of pocket  an4  n•c••••tT •zp•n••• and  cu1to■a17  chars••• 1nclu41q debit  intereat when incurred. 4)  lo 11ab11Uy would be 1ncane4 b7 the 1e4eral leHne lank of ••" Tork  ezcept for it, own u«ligence. A fona letter approTe4 b7 \he lecre\&r7 of \he !r•••UJ7 lo be written 'b7 \he federal Re1•n• Bank of lew Tork lo each of lh• a«en,, cho1en bJ' lt a1 f11cal agent to car17 out th••• operation• va1 encloae4. an4 the 1e4eral baer•• lank of lev York va1 authorised to  a«r••  with auch annt• that the7 incurred no  lSabili\7 except for \heir own neglipnce. !he 1e4eral Reaene lank of••• Tork wa1 authorised lo P&7 to auch •~•nta a oomm111ion of .00125 cent• per lrench franc, an4 .005 cent• per Dutch «uilder and Belgian franc OD all purcbaHI an4 lo lh•  cu1to■a17  charge•  ■ad•  ••l••.  ■ad•  \bro~  lhe■,  thh lo be added  l  b7 brokera.-  fhe ton lelter lo the a«enla repeated the 1ub1tanc• of ,be Secretary'• letter to \he 1e4eral ••••"• lank of lew Tork aD4 a4Tited th• agent, \hat lh• operation• Wo o01111ia11on ••• flzecl for 1\erllq or tor Swl1• franc,. 'fh• fll•• 4o not ezq reaaon for \heae o■i11ioa1. !he lllference 11 \hat no tran1aetion1 ln \he•• exchanpa were coaleaplate4. Check th11 lnterenoe.  !  •uci••' Federal Reserve Bank of St. Louis  \he aient1 • • •.pproTe4 bJ \he Seoreta17, aa4 \hat \he -cent, •1~1 rely on the  acn•••11te  m..d.e U bJ" lhe 1e4eral ReHne Jank of •ev Tork •• fhcal agent  •• bia41ng  OD  th• United 8\atea.!  Un4er Ihle authortt7 the 1e4eral leaene la.ak of lew York at one• ap(t .. '  pointed the ChaH letional Da.nk and the lat!oul City llaak, / and on Se:phaber 25 the Par11 office, of these bank• were 4••1~\•4 •• depoe1tor1•• for th• 1edtral ReatrYe !an~ of lew Tork a• fiaeal ~n\.  !he ~uarant7 !ru,, Oo. of lev York  2  v,u alr•a~ acU~ at agent,- aa4 on Jebrua17 11, 1935 \be Inker, !J"UI\ Co . waa added  ✓✓  IT.  \o the liat. !he lira\ InterTention 1n the lxchange Market~ 1renoh 7ranoa.  While the fonaal detail• of th••• f11cal aceacr arraqement1 v•r•  ■ till  bein,; worked out the Stab1111ation lund u.nder\ook 1\1 flr1\ larp acal• e2chance 1tabili1ation operation.  On Septeaber 5 it entered the aarket for 1rench franc,  1n 1upport of the dollar.  Durln« the laat two week, of Au«1-11t and the fir1t da7~ ot franc had been Tery tlrm both in dollar• and in 1terling.  Gold  Septe■ber  co■ in«  \ he  1n to tm  London market bad been golnc ei\her into board, or \o Parh, ra\ber than to the United State,.  The lmpre11lon wa• plnin~ in Ju.rope that a tur\her 4e•aluat1on  of the dollar, or at lea,,• 1ub1tan\ial inflation la \he Uni,e4 State, va1  ••rr  probable, and \hat the Jr1,11h authoritl•• would allow aterlla.« to follow the  dollar 1bould it depreciate in term, of the ,old curNnc1e1. !her• waea good ! v•~eneral 1i1cal Atel1C7 1 tile. 2 Check whether the Guaranty wat • ~pointed under tbe letter of Septe■ber ~ •• - well a• under earlier let\er1. Federal Reserve Bank of St. Louis  46  ••al of apecala,tn ••lllnc o~ 4ollar• aa4 a a,ronc ••--•' of cap1\al froa /  LoD4oa lo Parle.  A olrcaataac• tba\ lacr••••4 ,h1a aonaea\ • • Iha\ th• beach  GoTenaea\ • • al lhia U•• uader lepl obllp\loa to rect11ee Iba oatatu41ac  Tola• of heach tr••U!7 l>llla. aa4 1reach bau1 wr• coa1equat1T ac\lT•lT laorea11Dc thelr balance, at th• laak of hue•  Loaloa .  .l\ the au•  u ..  "r lru.terrlq fud.a  fro■  a\erliaa • • la po4 4•aaa4 la lew Tork lo "7 for  frea1UJ7 pa.rcha••• of 111Ter tmder lh• SilTer Purchaa• Act. 1 Coa1eqaeatl7 alerllac ••• naker ln Paril than U ••• 1n lew Tork. all4 arbitraceva ••r• able  lo aake a profit 'b7 aelliAg a\erl1BC for 4ollara, 4ollar• for franc, and fraac1 for e\erliac.  !hh further weakened th• clollar la \era, of fraac,. an4 oa HTeral  occa1loa1 late in Aucu1t the dollar-fran.c rate weat lo  6.69-5/S. Oolcl •~r\  _,._ .  pola\ fro■ •e• Tort lo Parh at \h1a lo ao••  were  fro■  lew Tork to Parh.  In the  ••1"7 irregular an4 a\erlinc broke  wa1  7  about 6.6,w}/2 &114 pl4 was allowe4  ¥Mk ea4111g lep\e■ber  aharpl.7 fro  •••r. coaUnu4 flna ud the gold acwe•at to haac•  1 \he exchaD«91  5.06 to ~.9s. fro■  Jnaca, how-  .laerica coza\laud,  aaouUng ln all lo $28,1430.000. 2  fh•••  pl4 export, were ln accordance with \he poller of \he !rea•urJ  unouced oa Jana&r7 31, that pld would. be penalUed lo  ■oTe  fre•l7 \o pl4  ,:--·· '--"·- '  •land.arc! coutrle1 when lhelr exch&Age rah1 reach.ct gold es:por\ polat. bu\ M  ... broa.ghl to an almlpt end bJ' lhe 1alenenUoa of \he 1u4.  On We4u14a1', Sept•ber 5, \he hnd acquired a HlliDC rca 134,301,220 lhr••  ■oa\h1  ■ appl.7  forward ua1a8' apt\.  of apo\ fraAca 1'7 U aold 4ur1q \he  4q a \olal of lea 15,155,031 of \he epol fraac, all4 aleo aa a4clltloaal  1 (lo\ checlced  fro■ !Na11U7  aovoea)  2 !hia 11111■a17 of urat ooaUUoa1 11 \aNcl •• ,u aarke\ report• of \he Co■Nrclal an4 11aaacial Cbroalcl• o f ~ • ' 25, lepl•'ber 1 u4 Seplaber 1.-pp. 1134-5, 129()-1 u4 145() . .. fte eoW lhlpa111h were moaace4 earq---la hp,aRe» (oh~. hep. ;.._f- tor Ille per, plqN b7 \he 1e4eral leHrTe lank of Tork la \hie gol4 •••••'.  •ew Federal Reserve Bank of St. Louis  ~  '7 \he 0Garaat7 fruit  Co. a• a«•n\ for the federal Keaene laDk of • • York,  flacal a«enl of the fr•••Ul7 · 11 to coTer.  1UDd  wa1  !he7 oaachl the ahort lahreat unaware, and forced  !he dollar-franc rat• wa, 4rl••n below &014 export point and the  able to ll&ke all it1 ..1•• of epot franc• at 6.6s or better.~ At the  , ... t l • lheurtet belleTed that  alao 1quaesing ,he 1hort latere1t.  the lrllt~b lxchan«e lq11all1atlon ~count wa1 Sterling, like the 4ollar &110 1mproTed  during th• d.q, but lhe two •control•• appear lo haTe acte4 lndependentl7.l fhe total tranaac\lona in franc, en Septaber 5 were  a■  followa:  000 oalUecl  re,.  rorvarcl lranc, Sold  t  140,046 ::."')  lpot rruo• Boyht  9,J6s  re,.  134,424  Spot rraaca Sol4  re,.  $ 1,914  15,155  ,  5,960  ~. , er ~Ir( 75) , . &, I J /:,4:._ ...::.7 7. 6" <:/. Jr:c. !hie lef\ th• ~d with a abort forward po1111on of ,9,)6!,000, aca1n1t 7  11  which lt had  $3,294,000 ln apot franc•  forward po11\1on of  $6,074,000.  on band., leaT1DC a net Wloo••r•d 'abort  hoa Sep\eaber  -----------.,,..-----v ln lh• aarket •• a 1eller of 1pot franc•  at 6.68, a price abo•• 4ollar-fr&11c  parlt7 but below gold ezporl point to Paria. 1h  !  5 ,o · septe■ber 25 it reaalned  On Septeaber 6 and 7 1\ added to  aa:pplz of epot franc• b7 further 1alea of tonar4 franc, ap.lnat apot. bttt  If th• order in which the 1n41T14ual \ran1action1 took place could be 1atel7 aaauaed ,o l>e ,he order in which the tpeciflc authori1ation1 appear in the fll••• an account could be «t••n ot the detail• of thla •trappi~• aano•••r.  !  The reo0Te17 of the dollar took place late Yedne1da7 afternoo~ after the ~OJ)ean urke\1 were clo1ed. aoa.. rclal an4 financial Chronicle Septeaber !,  1934.  l  p.  145<>.  !here 11 no reference in \he fll•• •mined of uq collaboration between t!wm a, thil Ume.  /f~1 d'l,-t)'/,OI./ t-fS,/J'S- -:.(fd1'77 · . Federal Reserve Bank of St. Louis  /dAud-'{_ X):: l~7'1-;Jllllb =-? x~,_,9112 I/Fe  48 aol4 1ub1tutl&ll7 aor• tpo\ fr~n01 tha_11-.U_pu.rcha1ed, thQ1 lncrea11a« 1,, IUICOTered ahor\ forward pod tloa faac\1011 of \he  Tabla  i /  ~ l a g \ha aax\ tav 4qa 01117 a  uollll\■ •d• aTallabla to \ha a«11nl• of  \ h e ~ tor  Ml■ al  6.61 ••r• taken b7 the aarket and on Sept ..ber 12 aalet of apot true, account of the Pu.nd cea1ed.  for  ~YI  thU  The operat1ona vere nov in fu\uree which bad  to be told ln 1ub1tantlal uou.nt• until Septnber 22 in order to uintaln the ce111n~ of 6.6g OTer the aarket.  Exchan«• tred•r• w•r• well aware ot ,he fact  that the 1wid had taken a 1hort po11t1on in torv~rd trance and  th• franc con-  tinued to be fin partly because the aarket felt \he lund •1«-bt aooa 'become a bu,-er of spot franc, to coTer th11 po11t1on, and partl.7 becauae it wa1 no, 1•t conTinced that there woald be no further 4eTaluallon.! ~ .:•ptember 22 the Jund bad r~d.~oed U1 hol41nc• of 1pot franc• \o the  eq~Talent ot  $1,  ~  had increaaed lt1 ahort forv~r1 po11t1on to  $17,270,00S:, leaTing it witt. a.n Wlconrec ehort· fomrd po1Ulon of $15,f:?,5,co~. Duri.q th• week of September 22-29, hove-Yu. the ~rket geh:•~  U ,11  hi-  pr€ta1on thAt the Brlt1•~ authorlt1e• bad becoe• oonTlnced th~, \htr• woul~ be no further tlollar deT&lUE\1on.  Sterlinc continued \ob• veak, but the dollpr  becu.e very fir~ in Par1a, and the J'UDd  w~•  \ber•f~re able ,o en\•r the 11erket  fo~ spot franca tc coTer lta torwerd ~o•itlon at prof1t8ble rate~. inetead of  It bo?,!ht rce 15,000.000 on Sephaber 25 at 6.66 !comzterclal and 1inanc1al Chronicle. Septeaber 15, p. 15!9, e1peoially quotott.on froa . •L•Intonaatlon• Parle. haT1¥ to ship gold to Pttrh.  2  ~ha1e !igura1 are calcated fro~ \he epeclfie autho~11etion1 ~nd DOtat1ona 1howln« ae\ual purcha1H and aalH thereunder ln \he •roreip lxcban«e. hench 1ranca Septeeber 21, 1934 to Janue.~ 15. 1935• tile. Correctneaa ha• hen checked b7 Cflll"r11,Df.' thJ'oach ,1ie ealoulaUoa1 lo October 12 ud checkln« \he poll Uon on October 12 w1\h ttrur•• g1Ten ln the •••kl7 balance of October 15 1howing th• ut abort forward po1Uion and holdin«• of -,ot trance. (lo\ei Uhr October 12 10•• of 'h• l])•c1f1c au\hor11ation1 are ■ i111ng. and veekly balance 1heet1 fro■ Septeaber 10 lo Oc\ober I are ■i111on fro■ \he filea.) Federal Reserve Bank of St. Louis  1h••'  if- Federal Reserve Bank of St. Louis  - ~9 -  :::.~.: I  50 and continued to b~ on a declin1~ aarket till October one third of its forward.  00-i\ ■en\1  6.  were conrci (Table , .  ~  \hie tlae oTer  ) but the process  we, 1nterrupied b7 ihe •••••1ution of ~ing Aleu.Dder of Tu«oeloTiA and k. Barthou on October  9.  The 7UDd iamediatel.7 caae to the support of \be franc  6.63-1/~ ($2,7!0,CCO).  three da71 la\er I ~, it sole. !U~Stl'nti~ll.v the ume uount three aontbe torvard ,t a hl!8fj- a1-.·e oulll ;r  withe pu.rch~•e of Jee 42 ,914,000 at  / ..LIV  ~  and WP~ t h,.is put ln a poeition to makE ~ P pu.rcru.u1 of apot  tuin ~ an uneoTere~ wa1 $11,385 .O(J') .  l~~  ?  poai\1on.-  ~iut 1 h  Ita net 1hort forw~rd p01itlon on October 12  Between October 22 and ioTe&:ber  which had now fallen to about  contr11ch. Yithout  5,  the 7und er.-terec. the urket.  6.6o and bo~ht Tirtue.ll7 all of ita requir•m~n\1  7 theee be~an  Beginnin~ December  to fall due and  ~  J&nuary 15, l9J, the whole aeries 0! tre.n9action1 vee cloged o~t. and the P,.md. (Table .-~-  wa1 out of franc, completely.  )  During \h~te coTeri~ operation•  which began on the day when t hey were appc, inted aa agente tor the l~cittrrl Ite1,u~"• \he  Bank ot Jl@w York,  Cha•• llank ano  t h e Aa~io~l City :B.:.n-..: ec-tP-! fr:,r t ::.e !"u.nd  ln addition to the Guaranty Trust ~o. The tlr1t 1ub1tanUal 1nhrnnUan of t. h• Jani in t !le excl-i~!:ge =n~rke\  wae \hua \o iapo•• a check on an outward aovement of gol! to P~ria du~ to rm-•17  liJ aelling --------------~olltl!", latiTe attack o~ temporary cau,ea.  tt~  torvard !r~nc@ the ~Ls alle. \o ct~c~ a ~•cu-  ~~~  befor~ tte,e contrect• fell due it was able to  cover it! re ~air~l"'. •nh in a weak aarket tor trance.  Bad the franc continued  •~l• of the, an<! the covering operation, o~ntributed tG at~bility in the 4ollar-trane rate.  [The  whole o era\lon therefore wa1 a at~bil1tP.t1on cr.>er~tion .  ~ f orwa r4 t •••H  !  we re -.o¼ct··-.t-·+ .#:· 11 the inference correc, that ,be $2,931,000 ln farward fr8nc• were told for \hie rea1on. Federal Reserve Bank of St. Louis  101d  on October 12  51 · It eliminated  ao■•  1~ipmtnh  71el4e~ t~e Stab1lizat1on Federal Reserve Bank of St. Louis  ot gold in both 4ir•otiona,  rund  and •• a ·b y-prociuct j  a trading profit of $335,000.  ~  TBABSACTIOJrS OF !HI ST>.!ILIZ.A.TIOH l'UliD II nDCH 1llAICS Sept••~•r 1934 ,o Jangaq 1935  (in \hou1and1 ot dollar,) rorwar4 Jranc1 Sold  Date  Spo, Spot Prance rranc1 Joucht Sold  Spot 7ranc1 DeliTere4 Short Spo\ Under ronard lorward rranc• Contract, Poaition Held  let Short 7orvard Poa1Uon  Calculated from Operating Record•  5 6 7  .,,,,. Sept.  8  10 11 12  15 17  lS  19 21  _  22  9,368 66S 233 375  53 266 173  4 5  3,294 2,211  12,927  14,649 1~.974 15,294 15,330 16,gi.o 17,020 17,270 17,270 17,270 17,270 17,270 17,270 17,270 17,270 17,270 20,201  1,610 80 250  9,36g 10.036 10,269 10,644  11,436  325  2  12  594  320 36  28 l  6 9  200  792 1,491 1,722  25 Oct.  s,9s4 · 5,690 666 1,749  998 C.~'°~ 332 1,658 663 331 398 331 2 • 780 C. ,I.~ !  2,931  15 22  29  loT.  -5 12  10  26 Federal Reserve Bank of St. Louis  •  •  •  •  20,170 20,170 20,170 20,170 20,170 20,l 70 20,170  7,!25  8,452 8,!80  9,93g l ,325 ..... 11,6o2 1,325 lJ ,329 1,325 13,559 1,498  1,325  1,325 1,325 1,325  1,325 2,323 2,655 4,313 4,976 5,307 5,705  6,036 S,816 8,816  t  Calculated from Weekly Be.lance Sh••••  Oct.  1,819 1,764  6,074  13,969  14,005  15,615 15,695 15,94; 14,947 14,615 12,957 12,294  11,963 11,565 10,826 8.454 11.3g5  1-'f  1 8,S4<r  !,841 11,719  19,950 19,950 19,951 19,951  11,JJo!  11,329 s,451 220  220-  21~ 21cl ,,,  5 .3 ( Cont lnued.} {in thou.aande of d.0llar1) J'orvarcl Prance  Date Dec. Dec.  Sold  Spot l'r&AC1 Spot Spot Del!Tered lranc1 J'ranca Under forward. Jo , Sold Con\r~c\1  10  17  ~ 10,071  9.8~()  ?.19  2.536 506  5,678 3,042 2,712  219 219 219  ~. 723  208 000  ~.~l~  24  31  Jr.n .  7 15  15~,  20lW-  -  167 2,931  1 71gure1 1l••n in balance 1he1t1. 2 Includ.•• lntere1t rec•l••d. on franc balance,. l BalaLce needed to clo•• out forward cofttrac\1 . ~ • • dw-1~ th• weak.  • Federal Reserve Bank of St. Louis  let Short forward. Fo!itioc  2,931  000  PAK! IU fh• Operation• of lhe ~Wl4 froa luQ&rT  1935  to \he !'ripar\Ue ~•un\ of lepha'ber 1936. I.  !he J'irat •Gold Scar••• ~.  Support of \he rordp hehuce•:  JaaQ&J'7 15 - rebra&r7 lS, 1935.  1.  InhnenUon 1n eupport of the franc:  2.  !he ahlft in the ac\1Tit1•• of the ,o the aterllag aarket:  JaaQ&!"J' 15-28.  JanU&J7 24.  J. file  1935  con41Uon of th• hnd on lebruar, 4,  and \he replenhh-  aent of lt• dollar ba)anc••·  4.  ConUnu4 aupport of aterlhg, 1ebra&r7 4-lS, aDd \he ue ot  aterllac baluc•• to b1q cold and ailTer.  5. ~.  ! duriq the flrat •gold acare• - Slmlla.r'7.  Operation• of th• 1und Iamedlatel7 rollowlac \he Dec11lon of the Supr•• Court Upholding \he AbrogaUon of \he Gold Clauae.  l.  lleen\17 of th• :rund into the franc •rke\ and \he rneraal of it• aarket poaltion:  2.  !he  UH  1ebruar7 lS,  of 1terl1a« balancH to blll' dlTer and the aale of fr&nca  between hbru&r7 lS aD4 March  J.  1935.  25.  Sale of gold to \he Juk of 1ruce:  March  6.  II . . l>lapoaal of \he hnd 11 lterlinc lalaae•• and the Sale of Oold leld Under lanark at the leak of Jacland: Federal Reserve Bank of St. Louis  larch 25-Jue  J, 1935.  - 2 -  III.  .A4T&acea  lo ~orelp Cen\ral Banke .A«aiu\ Gold kraa.rked Abroad.  ,1ae •uoaal Bank of llelci1111 aa4 the •e\herlad• Bau.  I. IT.  !Jae Crlala in \he hench haac - Jlq-Juu, 1935.  1935~  !he lll•er fran1acUon• ot \he hall:  '-27 ot lllnr franaacUoaa:  A.  1.  I.  file Specula U ••  Joo■  Dece■'ber  1a Silnr:  Jlarch-j,prll  Pealac the Sterlinc Price ot Sll•er:  1. 2.  '7  ~  I  ~  1934-Jae 1935.  J"17-Dec•\er 1935 : u4  Jaq 9-10.  PrellalJW7 OperaUoaa:  •eatac / •' 30-3/114: Jul.7, 16-Aucut 11. ., .  -~ / ,._..(  . . ...  j. -.' · . .....I .. . .  : I  -~  ~1ltlon to  •  ~ _,,,,  a lev  •  •..- ....  •  •  ,  _,  ~  ...  Sterliac Price.  4. !he hll4 ln Septa'ber. 1935.  5. C.  T.  Pegtnc al 29-15/164:  October 10 to Deceaber 5, 1935.  !he l>1tf1culU•• of Chill& u4 the  the lll•er fruaacUoaa of \he ha4:  had'•  hr Kaatera Pvcha.aea.  1936  A.  Klaor Sllnr fraaaacUoaa.  :a.  flle •xtcu Jere-al:  C.  !be ftret Chiu•• .&cr••••I:  D.  !be Behl of \he ha4 lo lell 111TH" hive, u4er \he LoD4on Federal Reserve Bank of St. Louis  la.n.u:q 1936 liq  1936. .i«J"H■ent.  - 3 Tl.  Ool4 aa4 Herl1DC !ranaacUona and eo-u■ea,a:  •oTe■ber 1935-S8J>te■'ber  .6..  1.eaewecl Offer to PvchaH Ool4  •.  l\u41ac Offer , o PvchaH Gol4 ia toad.on at th• Lo114on-••• Tork  fro■  the llank of 1raace:  SoTe■'ber  1935 .  lhipplJlc Pari\7.  C.  Crea\lon aa4 Liquidation of a Short 1orwar4 Poal\ioa ln lterl1DC: Jaaga17-Jlq  ».  1936.  &old !ranaactioa, fro■ \he hench ~lec\ioa• of April-JlaT  1936 \o \he  hipar\1\• Agre ... nt. 1.  PurchaH• of Ool4 in Lon4on a\ \he Sew York lhipp1JIC ParU7.  2.  leawal of .t.rranc••nta vUh \he Ie\herlan41 lank a\ fru1ar7  Ia1UaUTe.  J. Federal Reserve Bank of St. Louis  PreparaUoaa tor ,he Sale of Gol4 \o hclaa4:  lllM  1936.  1936 •  . , Ille IIM 1M hD4 laa4 00ftre4 all lla for.rd ....1,-ta la huch fhM• •  J.-..,.,q  15. 1935, I • pl4 \loo nrraclea were  IM7 -4. Na la •Oftder  aa4  Dtoaber, 1934.  allOll flnllr 11-a  Dv1&c Iba tlffl two web 1a  J - . r , tu7 nled &\ . ., •• nttlelatl7 1'l&h lo pnol114e Im poaa1b1111;r ot pl4 an-I•  tna Parla oi- olur  J'nach traaca wen parlinlarl.7  OOA\lm\al  ••'-n oa aa  ezr:laenp . . 1e.  •tnac,  tor eoatSdeeoe waa felt b lbe poll1 cl.ea of lbe J'baBN x1ai.,er, •· naadia. n.. dt•U.n ellaap4 ra41oall7,  hollffer, whea ....aalaeas •Pread. rap14l.7 abroad ooaoerahc the oaoo.. ot the geld ela.ue oaae a 1-ton \he Sw-iPre• Colan.  fraaes wen weak. 17 uv , . traae bad.  6.59  lo Iev Torlt of abcnal  Dvhc the  4a;r  0. Jawa:q 15 Nth &a4  woma  \larol&h tbl pl4 expert potat  eesla, aad had NdM4  6.533  and alerllac ••  the two ra.\ea fell nea hither h 6.-7 aa4  '4.13-7/1.  -.164. 2  !be  aa follow:  •(.-ua tu  fell below 6.59) it '"'•" "14al '-.I fon!p nehenp  baab wre awilllac to US111N nu tu ~  tu  •llcht•al rlak et  "-rloaa gold prioe vhlle Ille M\al • • la traaa1'.  a 4ovavard Nrl11oa  J.a a ooaaequaoe  of thla heaUallon to _,. &014 un.4 lo •be to tlda au. for pro-fl\, '1111 fonlp excbanp paa1o -  •  . . f•nlca  o.rnu1-• •n lhroia nerN&ri. la  • trullG .,,.IIP, ,o..,. 4ollan. 1lllloh wen appnotaUac vUaq la knts •t aterllac aa4 f ore1p  • a.taaa,1o  obNk •  ....-r.  Vllll \M eol.4 polat eoaplel•l.7 l&MN4 tun va•  uprM·latloa  et ta a:wnpe.  It . . J,lal . . IIMnlcll  haue aa4 other onatrlea Mel ell4.4!!!z allu4oned tu pl4 daa4art. hanea l Cownlal -4 J'laaaoial Cuoa1ale, Jw 12, 1935. pp. 1'4-6. 2 ••oa oaltl.8 ntea • r l lflff 1'7 Im J'euhl laaka to 1h11 fnanJ7. Federal Reserve Bank of St. Louis  55 .... to 6.-7.  Al aa:, anal  '-ea illpol'tel al a profit. u4 at  ,.59 fer .huoh  6.-7  t'luea &014 onll baw  1M P"Gtlal pnfll _. faalaatle.  hi '-ab nt..a to aooeP' Ille eppert-117 '9oallll• et ,._ fear of p14 n thla •14• a1&ht •  i.-~•  lo lh tutun  Coll  anal-..  1M  la lrault,  Iha tnuv, Dep&rlau.\ -.a aakN. le  11114 tranafon the profit bto a laaa. ciTe a.HUI.Ke u  d.11• the  u.,  aaU that •~tll tm-tller M\1ce' U .oud lrq Coli at $35 per C>Dee.  the S&l'bt eatlnnll.7  1r, ._ selleJt cl  flnt two web 11 n:Ppcrlef.  Mnl.7  ' b ~ price, 'bat (tu lacrekl7?)  C11'.l.ef1T  dcllua utU Jle'n'w.17 l!.  lhe  ~  1  11:atll  :ror lhe  fftnc, bu thanafter lh  eperatlou wn ezolu1.,.17 la nppon of aterllac. A.  hppol'I  at U.  hnlp bchee~:  1. [ldarwatloa la . . .rn Jaak  1..-...r, 15 - hWIIAJT 11, 1935.  npporl et $M fraaa;  1-.rr 15-21. ]  CIIII  laaar7 15  d  hv York lo hl' ~. 21,250.000 ____ 1/'I • ....Parla ___  speelflc adborlsa\loa . . pna to  a.  hura1  at 1M MDIII,  ~  kl ao\ onr 6.5S-3~. lhia ldk d b.w lo eonut ti... tftW S  !talel.7  laN pU aa4 Ml4 1M eol4 _..r ..,,..Tk tor llae Je4aral ....rn laak  Ten aa flaoal apat. la Part1. at a Hal I.I ■  2  et  BIii hl4 1111111  ~  appruiaa\el.7 ti,100.000.  et ••  -'"" '3,000 . _ , et ..14 Oil  ~ tellowtac  4q lt aU.ne4  -  herallou to the Parle -.n:at -4 adllfflael tM h4eral te la-  --  dnDI IM laak et haaoe to Nll 11P to e.000,000 apla■t ~ al 6.5J•lf', l&Da'IT 19, 1935, P• "1• 2Aeeorilnc to a •.ordtlu prep&Nd la IM he1111117 hpanMal la '9WM!'J ·193~ (ad.a.lee! '111 flle4 wllk evnspoa4aN} pl4 onl.4 M ktaa "7 MJIU f'na baMe f•r aldpant h .._ t.n if bdoa onll • e'Malu4 •' 6.51-3,,_. - - lf &014 ald.pped le J.111l• traaow ...U llaft lo M •'M&lMl al o.5l.llr. Dlelria' • •1oa• tue.  ini:t  ,...,.J7  )A parc:llaM Federal Reserve Bank of St. Louis  et  tbMe fNII 11111 .laU1eaa i,e1al et YIMr.  ?  56 to:..- ooaTert  the•• tnaoa  lalo ,01'. _. lo bell. Ihle pl4 u4er  tu h4eral ••Hrn Jiau of•- York.  eanan  for  A\ Ihle rat• gold laporta tro■ Parla  le lev York woa.14 eUll han bffa protllable. •••• lf tbe urkel ba4 nepoa4e4  cl••• )¥  OOlll)le\el.7 \o \he a11ppOr\  ••Uoa ••  at••• tor  lu  Oa the .... 4q a ••coad aatllori-  \be had.  eal• of $5,000,000 la Parle 1'7 the Jut ot hue• at  6.59 or 1-Uer. fhh ..,, ll■U ••• well aboTe Iha  had'•  ll&J"ke\\ aD4 la41cate4 \he  wtlli11pe•• lo blV traaca at M7 rah up lo, and poHlblr •llchU,7 abo••  lb• gold esperl polal  fro■  Parla lo lew Tork.  2  ho■ laaU&J7 17 \o luu17 2S  lhe rUDd ••• 1a \be •rkel dailT a• a ••ller of 4ollara at aJ17 rate a.p ,o oe•I• la aaouh na«ia« trn  t5,ooo,ooo  lo $3,000,000 per  4-7}  6.59  !he federal  • - " • lu.k ef lew Tork • • ia•tnctecl 'b7 Iba S.cre\ar, oa Jamaaey 17 to  ba••  all truce ,11.a• \Gap\ b7 \he hA4 ceaTe~tecl 1a\o gold 'b7 the Jaak of 1raac•, u4 Iba eol4 to be hel4 uder earaark  .u  1-7  ,i.. luk ot 1ruce.  a renlt of th••• operatloaa Ille h..a aqurecl 1,049,421 ouacea of  pU la Pana5 al a ooal ef aboal tJ6-l/2 a1llloa1. 6 Al aa  6.56  11  oea\1 per f~aac Ihle repreaeate4 a pvcha•• •  550,000,000.  anra«e rale of  the rud ot about roe.  II • • ooaa14erabq l•H llwl tu total of ,he 4a117 llaU1  '• aalbori1aUoawbloh aaoul la all lo t",000,000. J •• JUUJ7 1 - • .5 1 cea\a. rale the uon Parlett 2 la 111• fll•• lbl• av.tborlsaUoa COiiet fir•'• 'b11\ there h ao ladlcaUoa of which was actually flrel. I later froa the tact \hat \he 6. 59 ll■ U ••• •la-_ 1 '8ln4 la the follnia« 4a71 Illa\ the ha4 rahed Ue liaU 4vlag 'h• dq. / ~· 3 !Ile aukel respo..d te 6.5Sil ea laaa&r7 11 u4 19 kl fell apla to 6.@)5 -'l!r laaur,. 2S. Jroa Jaaaarr f9 lo h'bnaJ7 ll franc• were J111t ner 6.55 ceah aa4 414 _aot IIOTe lo 6.59 apla ulll 1e'bnaa17 13. lS, tra■ lb-. llorp•,ua lo Ille federal .... ne laDk of lev Tort of IJ oonflnala« \elephou 1aa,no\lou of Jaaaar, 17.--9!raaaac\loaa - ~lac ad . hllla« 1orelp hcbup - haaoa oo.,.n•4 lato pa• ft.le. 1942) (larch 5 -raa4u of 1e4eral ...."• Jiaak et lff York to NJ-. J>te\rlch. la , ... fll••· " ' \he anraca co,, of \he hlk of lb• tiev• 6 per ..... (fletl.7 1-laac• eheeh) lndieaUag pU aoct1li.n4 la Pan• wu  lhe Yna1  re,.  Lett~,.  b ••, e1••·  ,,11.  .,,.66  aa ezpea4Uan of $36,351,101.  7 Ille  epect.tlc aulhorisalleaa " " •• tollowa: Federal Reserve Bank of St. Louis  , . .~ 11,  '  H  ~.•:lo ,000,000 1·000.000  .ooo  aoaat  tz.000.000 ,500,000 ~.000.000 3,100,000  J.000,000  57 !be lul of Ille•• aalhorlsalloaa waa CiTea oa Jaa-o&r7 24 tor eucu,1oa oa l....-a&r7 21.  Al the ....  heaa1117 ,o ehltl  tu  u ..  a 4ecla1oa appear ■ lo baTe hea lakea at Ill•  ea.pporl of Ill• J'ud troa traac• lo elerllDC aa4 to  pon lhe eol4 acqulN4  ~  1al• of 4ollar• la the Parle aara,.  1■-  fte flr1t  ahiiaent, va, aad.e oa January 24 an4 on 7eb~.?'Y 14 the laat of \be 1,049. ~l  ouoe, wa1 ehlppecl. 1 !he gol4 acquired•• a re1uU of ,he chaae of truce ln  •ew Tork appear•  h.114'•  tntUal pur-  to have been traa1ferrecl lo lhe laak of  lncl,an4.2  [  2.  Ille ahltl la \he acUT1Uee of the hn4 lo the lterllq aarke\  llaultueoul7 with lh• illltial  •al•• ot 4ollara 1A Parle Ille  l  Jtu4 hA4 ea\eNCl \he Loa4on aarket wi\h a a■all parcbaH ot 14.JOO oacea ot  eol4  at  $34.60 per ouee,  ouacee a, $35. 65.  and  on \he tollowi~. \oaght aa addiUoaal )(),100  fMH parcha••• aaomiUac ln all to a\out a aillioa aD4 a  llalt 4ollar• wre not follove4 b7 o\hers 4vinc \lie aexi veek. ba.l oa luua?7 24.  / l:{'tlhs  lh• 4&1' when the laat authorlsalloa lo ••11 ~~ lll Parle••• ctTen,3 gol4  pvch&••• 1• Loa4oa nn nuve4 oa a •r• Tleorou pld.  ■ cal•.  fu ~ . lllroap  8'erllnc which afler the exceplloaal nakuH of lanuaJ7  15  ba4 reaa1ae4  tor \ea 4-J'• wUhla lhe ftllP of a..175 to a..112, ~ fell oa l&Aur, 26 to li.86 u4 oa that fly \be Pund 1upplaen\e4 1'• pl4 purchu•• ta l.oadoa  g  takiy a  1 Let\ar of 1e\rua17 a., 1935 \o \he ,.a.I. et • .., Tork ooaftnaa la8'r11eUoa1 lo ltiport a lotel of 1,049,~3 ouacea of eol4 froa the Secre\a17'• lpectal Accl. at the !ank of haace.--Nr. Dietrich'• 1 0old 8 tile. 2 !here le u eT14eac• ln tile fll•• ot aq cc,14 haT111C \een l■porie4 fro■ P.aria 'Mtore luur, 2~ u4 ao pl4 wahelt at lhe luk of huce •• hbn&r7 11. (WNk17 lalaace Sheet) Alao \he la\er pl4 w1\b4rawal• fro■ lh• luk of Jn«lud tor lapori \o \he UaUe4 Ital•• u4 ahlpaent to hue• caanol be recoactle4 wtlh uaapa la the ltelaac._ 1118•1• ulau Ihle lraa1fer waa -'•· There le bowenr ao 41recl ntereace to ■'Cl.Ch a ,ran•f•r la \he fll••· ✓r 3 there la aolllillC la \ha fllea lo nae1t lbe reaaoaa for lllh ahlfl fro■ Ille ••1• lo Ille loa4oa art.I. ~ !Mn an aooa-ca\le ral•• eerU'fle4 lo tile !Na11117 1'7 \he hcleral hHne Joart. Federal Reserve Bank of St. Louis  •••kl.7  58  i  •• l&aaar7 26 a\ ~.1610 u4 a aale of $5,000,000 1D l.oa4oa oa Ju.u.r, 21, the 1u4 1-cue an acU·ore pvchaeer ot elerl1ac la both •rate.  a,299,000  lla4 'Machi  1• • • Tork u4  tl4 ■lllioaa. 1 lleamrblle fhl• aeceleral1oa l• ahowa ctn• lo Ille 1e4eral  a,560,323 la Lo.ctoa at a co•I of aearl7  \Ile pl4 pvchaHa had been  '7  le••n•  -,. Jte\n&r7 " it  ••l>•taaUall7 ealarp4.  the followizac etat of the •~lhorl1atlon1  luk ot lev York lo ~ gold ia Lon4oa 4urlq lh•  flnt UIN• week, of lh• laleneaUoa: 2  Jaaaa17 15-21 JuUJ7 22-21  J U11AJ7 21-l'e n-aa17  ».  !be coll4Uloa of th• 1u4 oa 1•'bnar7 1',  ).  1935,  an4  Ille replealah-  _ , of l\1 4ollar bala.ace•. fbeH b.eaT7 parch&••• of pl4 and 1lerlla«  lar a11e\e of ,he h.114.  cr•a'l.J'  reduoecl \he 4ol-  -.U-17 1n Jaauar,, Jut 'before the latenen\loa begu,  lhH• hd \eea lacrea.ae4 fro• $125 lo $144 ■1lllon1 b7 the nle of Trea •VJ'  aolee, 3 Ille pro~e4• of which were cre4Uecl to \he checking accout wUh lb• fr.aver, lar  10  ,ha,  when the 11lDd acllTel.7 ••l•recl the exchange urkete lie 4ol-  ••••t• were al,out  eTeal7 41T14e4 'between lhl• accoua\ and \he leerela17 •1  lpecial Account "1th the 1e4eral JteMM'• lank of  of pl4 and. escbaJlce were aa4e.  Darlq \be flrel  •ew Tork froa which lh• pqaenla VHk  of the la\eneaUon the  aale1 of ■Ulloa• a tar\ur aceoUJlt vi \b \he !Naiver wa1 lacr•••-' ah.own 1• 1\•rllac lh• file apeclflc au\horlsa\ioaa work ou, al $13,906,236 aa4 tu· veek.17 balance ahee\ ot rebrUJ7 ~ • • $13,907,000. 2 Coapllecl fl'OII ,peciflc autborlsalloaa which gin lhe ■-nm mber of oucea aad \he price aad are f1le4 1a a eeparat• fel4er for each ef \he 4•11gD&\e4  ace•'•· ) ••• pap Federal Reserve Bank of St. Louis  ~3 Federal Reserve Bank of St. Louis  59  C-ii2T II  60 heae1U7 ao'••• an4 •• laaaa17 !la ,be ha4. ~ a ,o laport ,11.e ,ro14 U ba4 acquired la Part, by the aal• ~f 4ollara. 1  -, Pe\raaJT ~. $1' ■tllioa or  lhe p~eeed • 'Mt~ cred1 le4 to the 9pec1al Aeoo a, at \he ••d•ral hMrn  •••flew Tork.  fhi1 wa1 a  ••!"7 -11 offtel  ~inel lh• 4ebtt, lo \hl9  aceout. for the hnd b:, that U•e ha4 •-s>eBI a\011t $71 ■lllto1l1 la •~or\ 2 An ad41tloul tl~ •111\oa, of ~ld wa1 lD traaslt, \Qt of the ezehsage1. ezhau■ ted.  ~•fol"• tbh en-1•ed the l'pectal aeeont woal.4 Mft 'been coaple\el7  ha4 aot a lran•f•r o~ $50,000,000 l>Ma aa4• \o 1' fro• \he .lccoun\ w1'h \he  B, lebr,1,u•y 4 \he 4oll.u aHeh of \he had bad l>Hu nduc.d \o $S5 ■ ll­  Uoa1 aa4 ltt goll hold1~• reach~ their peak tor Ihle pbaae of lt• eperatlo•• (CMn :~ ) •  The eo~ttioll of th• h.nd oa lb.8\ ta7  Prtaclpal Au•I• of th• lt•Mlhal1Ga 1u4 ( looo oat Ue4)  Doll.are With ~•a.aver At  wa, ••  follove:  r.wurz: 14. 1935  ~.502 55,526  •••ral ...."•  Gol4  .15,021  ~l,609 11,191 lk,192  la Londo• Ia Parle Ia ,rallllt  5,)61  HlTer ( 1a custo47)  26,351 li..uer of  •aou•  fr•••vr ,o 1ederal 1e..n• •• of In terk,  file.  ~orelp epera\loa, froa la&UJ7 15-l•RUJ'J laoreaN la p14 la Loatoa lellar eale1 la Part• Federal Reserve Bank of St. Louis  llerllac Nap\  a.  wni  '21,106,000  36,,00.000  13,900,000  •11.)06.000  61 llaoe tbe  MrYOUMH  aa4 fvther hMT7  ~•'"-r7 6  ot ,.._ torelp ezohaap  4n1•• •• 1'1 lellar neovc••  Npa lo lapon pU froa 1-oadoa.  aarlcela  coallauct  oeaUaaecl aaaba\e4  ,u rua  on  fh• f1ral ehlp•••' waa et  277,17- oaoee (t,, 700,000) laba tna Iba p14 \oaeh\ -_ Ille hat la Jlq 1 19~ , aid 1h11 waa fell...a Ir olbera utll aa 8II011111 roapq ..1l1Taleal Ille 7u4'•  pvoba••• et Jaaa17 ... 1•ltnar7 wa,  lapor,e42 •  '°  111 4ollar ....,, .  llowner, ooaUau4 lo teoll• •Ul 1•Wll&J7 11 (Claar\ : ) wbea 1M lapr•• Court reader.a Ua ••claloa JIP)loltlac lh• abropUoa of Ille Ool4 Clao.1•. UaUl Ill•• lb• ha4 ooallaae4 lo 4raw Ion. th 4ollar balanc•• bJ )a,-lac ,014, a\er-  lta« u4 allnr, taller llaaa U \ll11' tbea up '7 Hllia« pl4 u4 allTer lo  the freaaver. ~.  Coallau4 sapper\ of steru-.. Je)r11a17 1'-18. aad lb• ue of  alerllac ltelaac•• to 1-a., gol4 ho■ 1ebn&J7  of a\erllac.  a.  a.a  allTer.  lo 11 \be hJl4 waa la \be u.rke\ 4a1ly 1D aupporl  Je\weea thee• 4aba U \oa«bt abou\ «2,500,000 la lew Tork aD4  ~-. 710,000 la Loa4oa al a lolal cod of a'boa.l $35,500,000,3 brlnclnc Ue \otal  pvcba••• of aterllag troa Jaa11&J7 26 lo 7ebnaJ7 18 lo aearq t)ig,500,000. a441Uoa U 'boach' a fv\her $9,750,000 pl4 aa4 $3,500,000 ellTer la  •rket vUboa.t 4ra•1DC oa Ua•4 alerllac lalance1.  Iba hlpel\ price pa14 for thh pl4 •• $31l.711"&1  OD  4  Lo114oD  u.,11 hbnaJ7 U  1•'bn&J7 16,35,600 ouoee  •re \oylll al $3~.7175 aa4 ».3,200 ea.ace• al f)IJ.775! per ouce. i lee pace ~·2-, u4 pap }; - •••·  fr•••UJ7  lu  la  !be •llnr  lo UL• h4eral le•en• Jaak of lew Tork of 1e,r11AJ7 6 2 ,.-,,era of the u4 21. Gol4 hel4 oa Ju11a17 15, 1935 •• $20,503,000 u4 OD llarcll ~. 1935 •• .19,5~1.000 (Weekly \alaaoe •h•el1). 3 Oollplle4 aa4 ealcalale4 fro■ spectftc aalhorlsallo•• ta •traa1aclloa1 - ~lag AM lellliag ~orelp bcbanp - llerllng - .IDlhorlsa\loae• file. ~ !Iler• la ao 1a4lcaUoa la lbe tll•• u ,o ~ Iba ha4 • • w1111ac lo pq \be•• lllch prlo••· file !naavy ....ru1. of reltnar;r 193~ olle4 a\ofl e\al•• Illa\ tu hipea\ prtoe \be ~•VT eoal.4 pq - allcnrtac f•rv,lateru, - . . . .,~.77. ,.,-.· Federal Reserve Bank of St. Louis  62 pa.rchaa•• bepn oa lebr11AJ7 6 &114 b7 lebr11ar7 lS, 7,171,000 oucea 199 flae  ace•'•  ••••n•  were l>oucht \ tile 4ee1gna\ed ot \he federal Jaak of•• l ?erk at price, ~ich were lleld w1 thi• the JlaJTov range of 24-5/16 to 24-1.3/16 pence per once .925 flu.  fhh 111Ter, 111c• lhe rol4 carNall.7 \oacbl, wa1 \.  lllpor\e4 111,0 I~• Valtecl S\ates aD4 aol4 lo lhe fruaUJ7 aader \he lllYer Purchaae Act, bttt the f1rat th1pment ■ 414 aol the United State, utll  lebnar7 21 2 • Aa a reeall ot IM•• a\erlinc, gold and 111Ter purchaHa \he ~ took a  lotal of .G0,000,000 off the u.rket fro• 7ebru.17 It to lS.  .u  the .... U.11•  11 41apoae4 of aboa\ $18-1/2 ■ llllon1 ot 11• crowisac a\erllac balaDc•• b7 b'QT-  -1.::_~  ac addUloaal gold 8114  allYer ln LoDAon.[ fh• gold purchae.. uo1111tff to  -1]  ~ ~ ·? - - L,J,li25,li70 or Ille aterl111g oqulYalent of $16, 11:,1117.~, u4 wore aad• al prlooa  r~iac fro■ 1a.11 10-1/24 to l~• 104 per omac•. \hroqh the acenh of lh• •-4•ral l•Hn• Jan of •n York .  !he a11Ter pvcba.Ha wernade ander an anaa«•-  ..., wber•• all••r waa 'boll«h\ la London  '7 ,he had vUh  e\erliq, \he  equiftleat of whlch •• cn41\e4 lo the lpectal AccoUlll of the lecrela17 at Ille  1e4eral leHne • ~ of • • Tork and obarp4 \o the freaaa.rer'• O.aeral Accouat . II••• the equinlen\ of a nlea1• of alerli-c '7th• 11lJl4 to \he frea1arer for  Iha pvcha1• of •ll••r UM!er lh• 11lnr Pare••• .&ct, a ae\ho4 1ubeequnU7  JlH•"•  1 Jlnoran4aa \o Kr. Dietrich fro• the hderal Jaak of•• Terk of Jlarch 19~- ft• apec1f1o aa.\laori sa\lo•• a44 ap to 7,275,000 ouoea al a ooe\ of  4-4 , 1'1 t.  ~, . _ 2 Letter of th• frea1V7 lo \be hderal haen• luk ot ••• Tork of 1ebn&r"7 lS, 1935. •:Jl1qin, an4 SelllDC ·stlYer - laUoul CU7 Juk• file. the f5,3•J ,000 of lllnr boqt,.I la Dec..ber 193». la Loaloa u4 hel4 al the \ec1Dn1a« of the la\en-.aUoa, ••• lmporle4 la the week of Juu17 21, ulcl la oue\oq for a lhort ,1.. an4 eol4 lo \he !reaever '-he•n 1ebrQ&J'7 IJ u4 18, •la« replaced '7 $3,358,000 •ll•er ...,17 \oacb\ la Loaloa (YNkl7 uluc• aheela). J Jlaoraa4u tro■ 1e4eral lu.k of In Tork lo llr. Dietrich, April 191-2.  ., •627. 696. :!'l  - lpec1tlc aa\borlsalleu. Federal Reserve Bank of St. Louis  63 uop,ec1 tor oerlala 11l••r pvoha••• la Loo4oa1 • file ~e4•ral i.eHrve ~ of  lew York va• lae\rue\ed ,o bt11 4,900,000 ouce1 at 24-5/1 and 24-lJ/l&t per •uc•  .925 fl•••  5.  2 a price which work• out at abo11t $2,657,911 (.£545,052) •  !he 1Wl4 dli.r1DC \he tira, .. Gold Scare" - lmaar7.  !he cau1• of lb• apeclal 11renc\h of "1• 4ollar, not oal.7 la lhe pld bloc curreaci••. but in eterl1~ , cl.a1Ag \hh per1o4 wae th• m.villin«n•H  ot 1014 arbUracev• to perfol'll lbelr or41u17 11arb\ fucUona al a U•• whell dollar a vere 1A 1\ro~ dellalld.  1~ baaia ot ,1111 dea..nd vaa \he belief \hat a  deci lioa b/ the Silpreu Court in the «old claa .. ca••• a4"ferH h  \he Go••rn-  • • ' vo~d be followed b7 a eharp aporeclation of \he dollar in teraa ot ot~er  gold cw-r•nci••·  Sine• the expeou,1on waa v14e-aprud that lhla appNoia\loa  woQ.J.4 be broqh\ about b7 a tall in \he uer1C&D ~ld price arb1'ra«•va v•r• · unvillin« \o the riek of lon 1nTolTed iD a11eh exchange while thalr go14 ••• la lrana1 t.  ConHquen\11 gold wa1 not  ,aen  1n auba ianUal aaowih troa  \he le.Dk ot franc• and o\har Cen\ral Janka of gold bloc c0Wlirie1, the aupply of 4ollar1 waa no\ :.:. . ; ~-~; ~c.::.. and uchange rate• aovad be70Gd gold point•.  CJold  414, boweTer, IIOYe to the On1ted State• 1n aubetoii&l aaout1 froa prlTat• hoard• on the ConUnent and fro• London, bu.I thh did aot keep lb• rah1 at  gold. po1Dta, for prlTa,e holdar1 vho ha4 teaporaril7 lo•I contid•~• ln «old •• a stare of "f'&l.lW, ottered 1t a\ a •d1100U11\ • ln~-~n Nrll:e\ tn Part• .{ 'fhe  late"euUon of \he 8'ab111saUon ~ . •••n lhough aapplnentecl b7 acUTe 1a-  tenenUon bf the lriUab hcbuge ~aallsaUon Accou, ln auppor\ ot 1terUn«  . --  3  l• \he Parh urn\ va1 ao\ 1atflcleal lo correct thh 1UuaUon whol • 1 fhe federal••••"• lank of lev York etate1 lhat no 1terllza« waa rtlN1e4 \o the haaaver lo bu, atlnr \efore ~e'IJ. lS an4 \ha, tbe aaount ot allTer pa.rchaH4 tuough 4e1lpate4 apa\1 • • onl.7 7,171,000 owacee. !be \raD1actlon.1 DOied hovner w•r• ~clf1oall7 41reo\e4 ,7 lhe heaeur, u4 tor aa dOWll of ,,erliag 4iapoae4 ot u4 aol ezpla1ne4 b7 arq other tran.1actlon1 ao\e4 ill the fll••· 2 Letten troa the !rea11117 lo the rec1en.1 ••••"• luk of York, ••b.1- u4 1a ltfraaaaolloaa - ~lac a.a hlllq - lterllac - a\hotl1atlou• •11.e. 1(3 lure ll • n14eaoe la Ila• fll•• of U7 OOOJHtra'1oa or eoaaal\aUoa 'between  •w  /  L  Ille ha4a. Federal Reserve Bank of St. Louis  15  64  .la aooa •• the aarbl• 'beC&lle naN  lhat banlca \hou«)l\ lo ' - operaU-c tor 111•  ha4 were ••lllac 4ollara, tu exchange■ becw eoaevbat aor• aorul.  h•• ao.  Ill• traac ral• n•laed. perd1leall7 '-lov pl4 ezpon potat lo lew York uUl 1 1•'bnal7 11 • On Pebna17 11 Nr. ac,rgeatba11 1ua.4 a pv.ltlle atat ...nt ta which  he •14: 2  M'Ye pracUcall.7 eloppe4 \UT!ac u4 ••lllng gold., vt.lhla eol4 laport u4 export  poln\a - whloh aeua lhal \Ile Ia\ena\lonal Ool4 Staa4ar4 •• 'belween forelp  coutrie1 aD4 \he Ual\ed. Slat•• ha• ceaa•4 11• auloaatlc operalloa. 2.  thank• lo \be torHlgb\ of 731"4  3.  Vhea  Coacr•••,  we aov han a haltlllsaUoa  hat.  w  aav \hat \he ulerul  wlo.• of \he 4ollar •• rap1417  oul of ooalrol, •• put \he S\abllhaUoa 1''1114 lo work on a  ■011eat  go tac  •• aoUoe, wUh  of lh• 4ollar la \eraa of forelp carreac1••· the eoma\17 can go about Ua bual•u vUh •••van~ Iha\ •• are pNpare4  \o  aauce  the external nlue of lb• 4ollar •• loag •• U ~ h  aeceaaa27. •  fhoap \he gol4 ar\1\rageara were allll 41•••tlaflecl l>ecaue Ille Secr•l&J7'• e\ateMnt 414 not  caaran'-•  tbal \he AMrlcaa eol4 price woa.14 aol 1- re4uce4,  th• aarke\a r• a4e4 lo lt, aa4 lo the coa\laud. • or\ of a\erl1 the had. !Ile aooa t/f Parle ra\ea oerllttef lo \be !Na1V7 '7 Iha 1e4eral •••n• ~ fr• JuQ&J'J 1~ lo ~ebraar"7 11 •re aa follow•; .1. . .065975 Jana:q 23 .065731  aar, 1- Federal Reserve Bank of St. Louis  15  16 17 11 19  . 065336  .°'5661 .065690 .065M.3  •°'51111  =: : :  2,25 ..°'53,at 065"80 2, .065155 21  .o65()52  29  •~511  fi  :~~  ~ c a eharect la \be pural alnacth u4 aon4 a\on pl4 ezporl polal to  I•• Tork. 1 hOII Juu17  aarn, •appon  'F th•  15  lo  r.bnar7 11  lhe  UIOlllll  had•• about $,ooo,  of tollara pGt lalo lbe eschup  of whlell $31,000.000 ••• ue4 to  the fraao u4 tgo,000,000 lo eapporl eterllac.  Ue crperaUolla turlac  Ihle perle4..,. M a-.rl••• la roaa4 flcur•• •• follow• ea lbe '-•1• of ti• operaUJlC record• and weekl.3" balance aheeta:  OperaUon1 lA Support ot Jrsaos aad Herling  haac• hupl la ••• York Jan11ar7 15 Dollar• eol4 la Parle laaU-r7 17-21 (coner1loa al 6.56)  lea.  tolal f raac• laoucbl  Jc,.  I.  21,000 , 000  •  36,J00,000  554,000,000 512,000,000  J)  1,100,000 ( ' • q  t  )1,100,000 ( ,J~)  llerlly  llerllJIC \oap\ Jaaoa:17 26-1e'brua17 11  la lew York  3,100,000  1a Loa4oa Ool4 \oapt la Lon4oa without u• o~ hn4'• a\erUac \alaac.. Jaa\lU'7 16-leb. 11  lllnr bought la I.oaioa without u• ef ~ • • 1\erlla.c 'balance•  total aterlla« \oachl  1  t,.s,)  6,300,000  7t 700 t 000  t4-~~5)  • 11.600.000 JO, 700,000 (l/.iT})  J6 t 500  I  000 \., 1 1 ,  _ _ _100_._000_  3,900.000 (4,j7f)  11.600.000  t 19,700,000 l'f-.PJ)  -1-~  total 4ollare aol4 1• euppor, ot ,.traao total 4ollar• 1014 la eapport of elerliac  • ,,.100,000  total 4ollar ellJ)port ot ezchan&e aarat  tl.27,100,000  19,700,000  eo...rclal  ul 1laaac1al Cllroalele, hff11a17 16, 1935, pp. 102i.-5. Part• nooa t/! ral•• ia Wev terk 1ebna17 12-11 wn •• follow,: Federal Reserve Bank of St. Louis  J'ebnar, 12  Boll..  ~•'bnaJT 15·  1~  •0659116  11  13  .065,--  0)  16  .065~ .065975 •065133  flle  D1-,..u1on of l'Dr•lp hchaAp •yh\ ha.ace ooanr,ec1 ta\o pl4 'b7 . . ol hue•  ....  \he  hue •laacee Nlal-4 hbn&r7 11  lterltac bo~t '7 a~nte -,.gol4 l\erllac Mlaacea ot hB4 llerliac Macht '7 1MiT dlTer lterU~ 1-lancee of hn4  ace•'•  6.  ue4 t o ~ gold aad ue4 to  ffc. • :,6,500  f. ?I  500 000 5, 00 zt 700. 000 ,. ,(),  700,000  hD4 7ebn&J7 11  ,ooo! 'f, 1 Y  16, 700, ooo )  550,000  uaed to bUT ellnr  total eterliac boaght Jaaaa17 15-7•brv.aJ7 18 fo\al 1\erll~ 41apoaecl of Jaa. 15-leb. 11 ~  1.100.000  :,,  C  fl.:,5~  and us.a to  fotal elerllq 411poee4 of la p:.i.rchese of gold and eilTer  Betaiaed  • ,.,100.000..:) I  t  I  £  12,  • 5~.1'00.000  ~,f/O  6,  11, soo,000 12, l50. ooo  $ g9 , 700,000  'I. 1 1 l  ~  6. 2~.000  'l IIP I • Jo,300.000 · 1/,tfk ~2,1600,000  Of \he '91 ■11110&1 of eolcl acq'l11N4 1a lh••• operaUoae abo11\ $5() ■11Uoa,  • • 111porle4 u4 eol4 lo the !rea.u.rer bT Jtebr\W17 lS, and 'by llarch 1 • fvlber  $1'2,700,000 n• 1aporte4. 3 fh•  l'n4'•  •lance•••' of Narch  ~  ahoYa U• pl4  llol41np al $19,51'1,ooo all held uc!er earaark at ,he Jank ot Knclaa4. •ou\ was •llchtl7  l••• \baa the  $20,503,000 hel4 alace liq 1934.  !Illa  !be lllalaace  of $)0,822,000 la aterlln« which U reta1M4 on hlwUJ7 11, therefore, npr•••A\a ln effect l\a u\ coatrlbu\loa  of the ezchanc-• 4ur1nc th• •,old  fro■  •oar••.  1\a own reaovce• to \be e\ablllsalloa  Ina ,hh  ■q be  thoQChl of •• ao\  whollt aa open podUoa la Tlew of lh• proepecUn aee4 oflh• fr•••V7 for  eterliy for '1le pvchaee of ailnr lll Loadoll 1Ul4er the 111TH' PvchaH Acl. l the lolal eol4 purcha1e• of the hll4 fro■ l&au.r'7 17 to 1e'braaJ7 11 were 1,520,255 ounce• (Jluorada of Jle4eral •••rn laak of In York'• llr.1>1etrtch Jlarch 1~1) 1-,300 0UJ1c•• waa \oaght on laallUT lf. A' $)5 per euae• tb• eoet worn oa.l al $53. 709,1125 wb1cb oollf1nt• Uw approztaa,e oorrectu11 of theH flpre& 2 tu alerllac actul.17 u14 '7 tu hll4 ea hbna17 11 ( ...kl.7 lteluee A.327,379 ftlu4 al t,0,122,511. ti. 4hcrepuq la -•ol4able whea operaU .. ralher \baa accoullac noon, are ue4. 3 I ••• prepan4 al Ml laela4e4 • 4elalle4 aol• coaf lnalaa lheH flpna aa4 Iba\ Ille pl.4 aot111N4 la Part.a oa lu..-q 16 ..., Mn hea true-  •••O wa•  terre4 lo Federal Reserve Bank of St. Louis  \U  Jut ot laclu4.  67 B.  OperaUona of Iba hD4 X..4laleq hllow1DC lhe l>eoh1ea of Ille  lupr•• Covl Uphol41DC lb• .l'npUoa of ,he lol4 Claue. 1.  beal17 ot Iha hll4 la\o  tu  traao  •rut  aa4  lh• nnrl&l of  0a th• aonl~ ot 1ebra&r7 18 ,he hod. ••• 81111 acUn ill euppor\  of Iha •xchan1••• but ahltted. 11• •la operalloaa \o \he 1rench aarke\. aatlt a ...11 ••l• ot  $95,000  ill Loncloa ., ~-17125 an4 lN>ll«bt a'bo1ll  ~  franc, at a coat ot ~ t $1,000,000. 1  in  ••w Tork,  Parle an4 Lon4oa.  $485,000 were aol4 ln Parle  at  15-1/2 allUOll  On Ihle occaaloa it 11q>porlecl \he tranc  1,500,000 wn boQChl ln lew York a\ 6.51 ,  101.  6.59  I\  an4  vUh ahrlin« at 74 franc• J)4tr pound.  2  lee. 5,6oo,OOO were 'boaght la Lo114oa  When lhe lv.prue CoU'\ nD4encl Ua  clec111oa a:pholdln« the OoYerm1ent ill \he gold clause oaHa, the exchanpa nepoi.ted atroncl7 and. \he 7and entere4 \he aarket •• a ••ller ot both fPanca an4  1  ateruac . . .111nc rca. 500,000 al 6.64 an4 £575,000 at ll.u~ ($2.110,156) l u  •n  -a..,r4, ,,, ~  ~  !he epiaod• of la\erTenUon lo redoN the exchange• ,o •aonaal•  Tork.  wa• at an and, but an open podtion in both trance and 1hrl1nc rema1H4 \o N  lictuihted. 2.  !he  1lH  of aterllag balance, lo 'ba;r all••r aD4 the Nl• of franc•  between Pebru17 18 an4 Jlarch  4.  After !!!--~\-1-1-1._ 1a::.::l::......:ea =.::l• :_::o::f_:•.:_ '•::r:_:l::l::DC ~ O :.:l:.....: l h...:..:. 'bn :_:•= =r'7 ~= 11~ '::h:.:=•--lead dt d DO\ an\er  \he a\erllng-d.ollar ·-rket a,:aln ulll April  a.',  k\ U  ,uckq  4la-  baluo•• all•er \rannctloae of ftriou kinda . lpeelt1e authorisations aa4 ve•kl.7 be.lance aheel of Jebraa17 25. 2 lpeclftc author11a\1t•• la •Ba:,tng all4 S.lllq haaca - ~aal7 fnal Co. u4 Imq tn.a\ Co. tllea. ) lpeolflc nlhorlsatloaa la 1 '1'raaaaotlo•• - ~1a« aa4 hllla« Joretp hchaa,e Slarllag - Aathorisallou• flle. 9e4 of auba\anllal elerli Federal Reserve Bank of St. Louis  68 11 ooa\laae4 lhroap 111 apale lo 1N;y ellnr oa a aod.erat•  •cal• la Loaclon.  hoa •ett11aJ7 19 lo llarch ~ epeclflc aulhorhaUou were ct.Tell tor lbia pvchaH  et l,b,ooo o1Ulc•• of •1l••r at price, fro• 254 lo 25-13/164 per ouoe. 1 Ia a4d.Uloa the ha4 nleaae4 1ab1taallal .....,. ot 1\erUnc to the tr.. aver tor 2  the pvchaH ot 11lffr  Wl4er Iha lllnr Parch.a" Act.  'fh•  cr..\er  part of \hia  8'erl1ag appear• to baTe been r•l••N4 la lh• firal •••k aflH· 11'• l'fferaal of  the  had'• aarat pot1Uoa3.  In lh• tollowlac week Iha had appear• aleo lo  ban taken 4•ll••J'7 of 2,000,000 ouac•• of 1ll••r purchaee4 fro■ Ille C.atral leak 4 of Cblaa. fhla ••• part of a purchaH of 10,000,000 ouace1 ori11aall,7 pgotlate4 tor the l'un4 bJ' the CbaM •tloul lallk la •o•••ber  Chae• ••,1onal luk 1D 8haacha1.  a11Ter5  aa4 an arraqeaen\ waa  193~.  tor lelh·•17 lo \he  DlttlC111H•• lla4 ari ••• ill th• 4911••1'7 of Ihle  •4• la 1ebruJ7 1935 for poetpoalq \he 4el1Terlee  accor41ac to Iha tollowtac eche411le:  6  ($1,090,000 at 5--50 cent,)  llarch  5,000.000 oucea  (t2.609,000 al 53-)/1  £prll 1935  ),000,000 oaac••  ($1,650,000 ., 55 .,..,.)  2,000,000  oma.c••  oeata)  liq  19)5  1935  1 lpecltlc authort1allo•• tor Ille pvcha•• of e11Ter la Loa4oa la wblch th• price h tv.ote4 1• pence per ouce .925 flu P•• Uw optlea to lhe ,.._eral laHne Jiau ,o charge ,he cod lo the l'u4' • •l•rllac \alaaoe •' tho leak of ~laD4 or to the Special J.ccouat of the lecreta17 al the h4eral leHn• lllak of In Tork. fh.e fll•• 4o aot indicate how pqlNJll waa •4• la 2 Jroa h'brQ&J7 11 lo Jue 10, vhea \he aterli~ \al&Dc•• were llqul4ate4 ~~.561 •• releaae4 \o Ille tr..aurer (Jleaoran4a to Jlr. l>letrlch fl"OII l'Neral b••n• Jank ot •ev Tork, Jlarcb 1~2) fh• rat•• aN aot ctnll la lb• fll•• \u\ the Aollar equlnlent a\ 4.175 wora out al tJ,63~,6~. 3 !hh ·tt laferre4 fro■ lh• au\atanUal reclue\lon• ta 1\erllac \&lance• at 1h11 U•• aol othervlH expla.1u4, \u\ 11 aot 1NaM4 oa llrecl nl4eaoe. ~ !be had' 1 1ll•er· hol41ap lncreaNd • $1,6oo,OOO ln Ibo week of •rch Ii _b11t H• pvch&Ha la Lon4oa lbroap 4eaipatecl ageal1 la \hoH wMka " " oal.7 $)100 ,000. 5 See pap Ol~ tor Ille ..,aro of 41ffic111H••· 6 1!rueac\1oa• - lllnr - O.atral laak of Cldaa1 tlle, eapeclall.7 letter of frea11ll'f \he recteral luk of._ ton of hltna17 l), 19)5.  ••cl:&•••·  th•"  to Federal Reserve Bank of St. Louis  •••n•  VMer \~la UTanpao'  ,ii.  C•lral ~ of Cblna wa• ctTea tu oplloa of aakiac  4•11••17 la Loa4oa, allbJecl lo a re4ucUon of J/16 of 1- la lh• price.  IJ'  ~  Jl, 7,252,000 oaoea of lhe lolal ba4 been 4el1••r•4 u4 lh• 1-1.ance n• 1 at 111 fvlber po•tpoae4. !'he Cealral JlaAk of Cblaa •l•cte4 lo tell nr ln  Lollllon aaklng it• flrat 4ellTerle• early ln Narch and tt1 1ecoad dell••rl••  earl.7 ln 11.q.  2  In these nr1oua wa,a th• aterling balsnc•• of the J'ulld were Nd.GCed. fro•  $30,122 ,000 lo $22,150.000 in \he tvo weeks followin,. the «old clause 4ec1•1on .3 ).  lale ~ gold to the laDk of J'raACe: On March  March  6 \ha !rea1UJ7 au,hor11ed Iha  6.  led.enl leHne Jiau of • ..,  Tork to transfer 326,846 ounces of gold hel4 uder earaark at Ul• Ink of lacland.  to the Jeu ot lraace ud lo ••11 thia eold \o the lenk of 1ruce at 101.16,919 . 014 4 per flne kilo . !hit of Jue\ ner $11,000,000 in pld \o th• Juk of Jraaoe  •al•  recluced the gc,14 hol4ln«• of the hD4 to $8,186,000. 5 !he franc procee41 were la:ae41a\eq 1014.  '  On March 6th• lQDd 41spoae4 of 7oe.165.~10,000 at 6.68-1/2...  1 llr1\  to Sept 10, 1935 and la\er tor the flllal 2,000,000o\UMMa lo •oTUber 1935. 7q,ooo ouace• were 4•ll••red la Juq. •hanaacttou - lllTer - Central  Ink of China• ti le.  H••  2 Ihle le laf•n-•4 troa the re4ucUo•• lJl e\el'llac -.lane•• a\ thoH whloll an o\h•rwi•• uaccoule4 tor ln the oi,erauac noord1. !hara 11 ao 41rec\ etate■ent ln the fil•• ahowlnc ,he exact 4el1Tez7 elate• or \bal J)a7Mlll wa•  -4e l1l aterlla«.  3  •••kl.7 bal&Ace  1hHl1. fll• opera Hae recor4• h41oa\e tba\ lh• re4GCUon waa acc0Zl)!i1hed approzlaatel.y •• follow,: $2,110,000 Sal• of 1\erli11« tor dollar• )10,000 Sale of a\arllng for frano• of eterllnc \o fNa1UJ7 aD4 to te11pa,et ~.)00,000 acenta fol' the purcha•• of 1ll••r P.,..a, tor 11lnr boap\ froa o..,ra1 Jaak et Clllaa 1.000,000  -•l••••  ff .ii§o,ooo -  .lcttal re4ullon •• per '-1.&Doe 1bee\1 . . . . . . . . . . . . ,6112,000 Al w\ler of Jlarch 6. 1935 la -~ru1aotloaa - ~ac u4 hlllac lol.4 - O.aeral• flle. 5 WNklJ' balance ahee\ - llaroll 25. fbe 1-.luoe lhee\1 of larch 10 aa4 17 an aiHiDC fro■ \he fll.e1. Federal Reserve Bank of St. Louis  •••kq  70  l11aOU•• la \he true aarat utll a tn1h oriel• la heach attalra called for Hllfte4 aapport of l!Mt fnac bepaniq  ~  11.  nt1 orlal• pro4ue4 •• ou of  111 etteol• a elroac aaral for 1lerllac wllieh a1al11e4 lb• 111114 la ,1apo1lac  ot Ua r-1•1nc a\erll-c balance•  rw.4'•  Dtapoa&l of \he  II.  an4  pl4 etlll earaun4 at \he luk of hcland.  l\erllnc Jal&ac•• u4  laraark ·• , the ldk of ~land:  ,u lale ot Ool4 llel4 T1D4er  Ila.rob 25-Ju•  3, 1935.  25 the hn4 4te-poeecl of of Ua r-1•1D« tu~~ furtbEr 1llvEr ~i.U·ch&•&a,Ii b~\ it d14 aot  Behen llal-ch 1' aa4 March a\erlin« brl~~ceP, prcktlj  acala beco~e  ~  A  seller ot •terl11l€ tor 4ollar1 until •pr11 4.  Slerllnc ln \he  ..amrhil• b~! fa.llt- .r. beloY the aT•r~• priee at vhlch the Jlwid'• balance, b.a4 'been. acquired.  Al\hou_:b lh 1terlin.g .... carr1~ OD. lh• balance  ~ril 1 lh• hat eol4  ~.12-3/4 on April ll,  £271,500 ln lw York et 1)r1oe• ru«iJIC froa ~.14-1/2 lo  n4ac1nc 1'• a\erllnc hol41ap \o $19,133,000.  ,o 17 11 ••• 4all7 ln lh• aarket •• a ••ller of ... 11 pr1c•• which ro•• gradWll.17 lo  4.15-J/~.  dOWltl  1roa April S  of 1\erllng .,  'bo.t afler dispoainc of  hal41~• ln \hh vq a«ain wUbdrew fro• \he aarke\. aad•  ah••'., ~.172 Oil  $4,700.000 of lt•  In \he Han.while 1' ba4  olll7 o•• -11 purcbaae ot ellTer ln London at 2S-l/24 tor wblcb ti ba4 paid  la 1\erling and been reisbur•ed by \he freaaurer in dollar,. but oa .&prll 25 U reaua•d Ill••• purchaH• Oil a aubdanUal ecale.  17  Nq  9 U  ba4 aathorbe4  1'1 a,;enl• lo parch&.. ~.250,000 ouc•• at prlc•• rangiDC troa )54 \o )2-)/14  per oaaoe, ,o be obarp4 ellh•r lo Ua elerUac acooa\ with \he leak of b«lan4 or  u,  ap•clal accow  .a, lh• 1e4eral le1en• Ink of lev Tork.  Aa a re1u1'  n  -':fdt.,... •beach Pruoa - ~tac all4 hlllaa - Gaaraal7 !'nal Co., Chan hUonal l.iak, Inlac !ru, Oo. u4 laUollal 0117 Juk• fll••• 1oa. 165,~10,000 al 6.61-1/2 le $11.057,'51. !'lie oaq other true tran1acUoa of lu 1u4 at lhh U•• •• a parchaae u4 ale of lea. 5()0,000 •• Jlarch .. oa whloh \he hJMl -4• a aall profil. JHoae allTer • • rel•H4 \o Ille ~r•evn- oa Jlarob 11' (a\oal '235,000) llat froa Ille 4a\a aftilaltl• I 1MITe \Na _,1. \o aa •aot ot lh•H ■ lllor 1llTer lraaeao\lou. Federal Reserve Bank of St. Louis  cl••  ,1a,-.,  71 •1-,.eecl et lhe elerllac etla.1nlul et a\eul tl •900,000. \a17 \ftp\ fna Ille •x1oaa hea•UJ7 ~  la &441 Uea tile hcn-  2,571,021 euo•• et •ll••r .999 fl•• ••  7 al 3)-9/1'1 per euce I• N 4ellnre4 lo lbe Jut ef  -.laa4.  fte eeet  ••Ml• a 4e\ll to \he e,erlla« accoa\ et Ille had al \be luk ef hclaa4 u4 •ll••r waa ehlppe4 lo • • Terk ea llq  0a-.,. 10 alerllac r••• !'he atnac\h  thereafter.  et  9.  1  le ~.IS-1/2 aa4 oeal1au4 aterUac al lhla  ••r'7 fln fer••••  '1•• wa, 4aa  It.a•  la part I• ,he aaral  reactiell I• a ra4le a44n11 of lecreta17 Jlerpnlbao. en liq 1) la which be eal4 Iba\ \he U.1te4 S\at•• ••1ll4 Ml be aa ebatacl• lo ezcbanp atabllisatioa, aD4 la part ,o Illa •••••'  et tu4a  crlUcal aUu.Uea 1• ~raaoe.  lo Len4oa reaul\111& frn lb• lacnaaiagq  C.aaequealq lhe l'u4 reu\er•4 the  ■arket  u  a Mller et elerllac, all4 oeaae4 I• releaM Ha aterllac 1-lanc•• for \be pv-  cha•• et ellYer.  U ~1ne4, ll...wr, a ~ r et allnr ill l.oa4oa, \u\ laI  elncle4 Ue ap1ala I• u.n tia. ceat charp4 I• lb.• l•cr•l&JT'• Special .leceal  la ,ell.are al lhe ~e4eral ••••"• Ink et • .,, Terk.  2  the J'UD4 waa thu la Ille  IM aw llae \llal U waa a ••ll•r ef Ue acc--1.ated liq  ■ lerllac  beJa•oe•.  hoa  10 ,. 20 11 . . . ••111-c •l•rliac ul~ la ~P._,,~• ., ral•• nlch  al-411.T I•  -.91-5/1. 3 In  tlala _,. U 41epeN4  NH  ~ M-1/2 ■llllHe of U• ~ ·  Mlalac balaae••• ~ u4 Ihle, ,._.Iller wUh pa.raeata l• alerliac fer fvlher  4el1Yerlea et ellnr la Le..tea .  '7 lbe C.a\ral  a Utile enr d,oo,000 . . liq 20.  '  Jluk ef  Chl•5 lefl U vilb •al.7  1M ~ lbea c . .M4 \e  ••11  elerllac 1-1  leek a4Taatap of lhe 1lnac 1lerl1111 aara, lo Hll 111 r-1al11C pl4 at Ille 1 "fraaueH•••--h;rlac u4 s.111■- 0.14 u4 lllnr--ltlftr--e--llenoe• fll• 2 ., J - 17 ll laa4 1-utll a tvtllar 2 1 6oojooo euoea al fna 7~-57 oeal• le 72.10  ceala per eace (lpeo!tt.c .lalllert1a11..a  ~tact.. Ua  <•- '•  lelal pvclaaH• 1lao• tbe ea4 ef Ille ~1, eoar• '• •'-•' 11 111111•• llr. Die\rleh fr• Ille h4eral leaern luk et._ Terk.,_llaroh 19112..a. •'-'•• llaal 10,)26,000 •--• •r• la J.elllon tna ~\n&JT Ml le J... lu.  •-ell'  •aett•.  l file •1pea\ _. 1...., rat• eMaiul _.Ille._., lar 10-20 wre tt.17-1/2 •• ~ 15 aa4 -.,1-5/1 •• -.., 11. - lpeclflo Aa\horhall•••  5 '" .-n. \'- r ,~ . i Federal Reserve Bank of St. Louis  6tu  •f.., 20 . . _  weekq '-'o• alwel alerltac u14 al  72  0a..,. 25  Ill• '1-eanJT laeln.c\e4  Ille 7e4eral ••••rn ~ o f . . . , York to  Hll •• llq 27, 32,000 tlH ouo•• of pl4 la LoD4oa fro■ \he ~ • • llol4lac• 1 al tu._ et laclaa4 al $,IJ.93, u4 to laol4 Ule 1lerl1ac prooeNe wllh th•  haraa'7 hut  ~ pell41nc the reoelp\  of Ihle alerllll.(.  of the 4ollar precee4a of Ill• Ml•  !be 4ollar1 were lo M oi-e4Ue4 ,o \be leor•laJ"7' • aecoa\  al the 1e4eral leHne lank of  aew  Tork•• \he7 became aTalla'ble.  2  • • executed on lla7 27 at $34.9s. liq  fhll or4er  .  At \hie price 225,600 •ucea ver• aol4 117  31, l•aTlac oal.7 6,SOO ouac•• al lhe laak of ~laAd·. Oa Jae J Ihle • •  eol4 at  $34.933 an4 la the aau 4q  a Pa.JIN•\ of  600,000 la  alerllac ••• llde  lo the lanker• fruat Co •• Lon4oa tor elb·•r purchas-4 for \he Yu4 ill Salpa,  -  Iad.o- Ohiaa. an4 the J-ud. ••• left with oal.J' a  no■iaal  aaoun\ of aterUac.  1 I.alter of J1a7 25 la •traaeac\ioa•. Jv.,1ac aJMl Selll11g Gol4 aD4 lll••r - lol4 lalea - lurul7 fraa\ Co.• file. 2 file ezee11\toa sot• and the epac1f1c au\horlsa,1on la \he file• 4o aol aa lo price. 3 tu pl4 aol4 al lhl ■ U• • • \he balance of gold acquired b7 \he 1u4 la llq 19J~. U ••• carriecl oa \he laooka of th• Pu4 at $35 per ouc•. \11t th• 001\ that woQJ.4 b&Te hell lacurr•4 it all gold 10 acqu1r•4 ba4 ••a ulppe4 lo •av York Oil 1e'bna.J7 1, 1934 ha4 been truaferred lo th• had aa4 plac•4 la aa accoul eat1tle4 for exp•n••• of eb1pp1nc 1.273,972.777 flu of gold LoD4oa. b«lu4, ,o \he U. I. MN7 Oftlce. • flJ,e of laporUac 277.173.621 lo ... Tork Oil Jebn&J7 6, 1935 u4 ehlppiac 7~.739.956 ouce• lo Paris on March 7, 1935, (par, of abtpaea, referred lo oa pap {.r; ) had hen cha.rp4 lo Ihle accou\ leanac a 1-luc• of$202,56o.3~. All ,he real of the 1,273,972.777 o~c•• vaa 41apoae4 of abroa4. la lh• gol4 a11Ter ucbaap 4eacr11,e4 a'bo•• (pace ?-:: ) • u4 1-7 Iha al lhia 1111•, aa4 oa Jae 5 lhl I balance vat \rautern4 to •Prof1 '8 o• \he ul• of cc,14• oath• book• ot \he hlld. LeUer •f Ille tnaaV7 lo th• 1e4eral ....rn laak of • .,, York, Jue 5. 1935.  acr••  •.aoe•  froa  ••••r••  up••"• <••·pap ~! ) aal•• •4•  ~ Leiter of freaev, lo ~e4•ral laHn• Ink of•• Tork, Jue 3, 1935, la 1"fraa..cUoaa - luJ1ac u4 hllia« Ool4 u4 11l••r - laak•r• !rut Co.• fll•. Federal Reserve Bank of St. Louis  73 While \he  ~  vaa thpo•lnc of lh reaa1DlllC gold in London at prl~•• not  only lower lhan that al vh1oh Iha Secreta17 va• rea!7 \o aell \o c.n,rBl  ]lp.n-:C1  1  of eouatr1ee ea th• gold e\..au4 ($35 per ouce plus 1/:.) • \l.t ••ea Nlo._ tu official gold •alu• of the 4ollar ( '35 peP oace), the crllh la lhe h•ach  true wag at its betgh,. aad tb•  ~  1 Pr•H llel..,a of Juaar, 31, 193ll. Federal Reserve Bank of St. Louis  oas• acti•el.7 to lt1 IU!'POrl.  71.+  IU.  M•aace• lo J'orelp Ca\ral Iuka apla■' Gol4 laraarlcect J.broa4. J>viag \hh crllla 1a the heach traac lh• J'aa4 further 4eTelope4 U•  lechalque  '7  aatac a •thod preTloa.alT 4enloped •• part ot the routine ot  in\er-0.n\ral  la.Dk  fhrougbout the •,old •care" lie 1apport of  cooperation.  the forelp ucban«e• had beell e1,her ln the ton ot •t•rllnc and franc• boqti,.ia In York or dollar• aol4 in London aa4 Parla tor U• accout I or b7  the purchaee ot aterllq in orcler lo pq tor gold ud ailnr boQCht ln London. lone of \heae operation•  ca•• lo forelp  Central lluka a 1uppl7 ot 4ollar•  with which thq al•o could. lnt•"•n• ln th• exchanp Mrket. dollars. hovenr. could •••117  1,e  Sg,ch a auppl7 of  proT1ded b7 the 4eTlce ot eara&J'kin« gold  abroad ~inst an adT&Dce ot 4ollar• la ... York or lQ' the purcha•• ot gold abroa4 acalnet laM41ate J>&111•nt 1n 4ollara.  Jetore the •gold ecare• tac111 tie a  of thla eort bad 'been offered to tonip C.a\ral Julee b7 \he 1ederal JleHne lank ot lew York but •• the J'UD4 took onr Ihle central lMulkinc tuacUon the  tranaaction becaa• aon aa4  ■ore  aa la\er-connmeat arran«e••nt.  fhh eTolu-  tloa la clearl.7 ehOlfll la the relaUoa• between the ._Uonal laak ot lelgiaa. the letherlud• BaDk aa4 the Bank of Jraace on the ou hand, and the 7ederal  •••n• lank ot In York aD4 \he Stabillsatlon hn4 oa the other •on■'ber  J..  hand, after  1934. Arranpaent• Jlad• by th• J'e4eral leHn• laDk ot In York and the StabilisatioA  ~  wl,h the •atloaal lank of Belg1u.a and \he  le\herlan4• Jank ln •o•nber 193~ aA4 April 1935.  -.i-17 in •o•aber 1934 Keaen-e llank o~ •ev Tork Federal Reserve Bank of St. Louis  acr••4  an arranp■ent wa• -4• u4er which lh• J'ederal  ,o aake a4nac•• lo lhe •atloul 1au ot BelgiWD  agalaa\ pl4 eanaract la llaelr - • la ln.aMll, f!!J:&111••4 tree for export  WM!er all clrcmnluc••• ... ,o be ehippe4 b7 th• flra\ aTa1labl• ., ....r to 1h11 gol4 wa1 lo 'be 1014 lo the United ltatea  •ev Tork.  price of $35 per ouc•  l••• 1/4. !he  !N&IUJ"7  at Ua lnqia«  4ollar a4Tance of th• J'e4eral leeerTe  JaDk of • .,, Tork: vaa to 'be 11a4• fro■ Iha ■oaen\ of eanaarkinc to Uae 4•11Ter7  of the gold, aD4 talereat • • to 'be cbarp4 at the  •ew Tork Jaak:'1 Uacout  fhla ••• a pveq laler-c.a,ral Juk: arrance■•nt lnto which ~h• Stabllisatloa 1'wl4 414 aol eater. 1 It wa• aa4• oa the laltia-  ra\e (at that 11• l-l/2f,).  •zcbuce•.  U•• of the lelclan leak •1n lh• utereata of lhe 'belca-4ollar ll■it of be •■all,  $25,000.000 vaa ••'• thoach 2  an4  \he aclaal lralleacUolla WN espected to  ill tac\ the arruce..nt ••• ao\ stil1ae4 nen when \he belp va•  deYalua4 on April  • 1935. 3 0a j,prll 10, 1935, colac14eat with the ftrat  4 belca 4@TaluaUoa • lh• lelherlaa4a ••• Torie wUh a  A  11.■ llar  request.  lank approached. th• 1e4eral  Bank: of  U ami whelher th• Iew Tork lank would be  vllliag to h&Te \he ••therlaacla Bank 4rav oa \h• ae\erclall for tbelr aocoma\.  :a... n•  ~1••'  gold eal'llarked in  !be letberlan4• Bank 414 not intend to ll&ke  replar ue of 1h11 factlU7, 'but wllbed \o be ill a poliUon to la aa\erclu in caH of erraUc •xcbuce .,.,... nta.  ■ell  4ollara  It alreaq had an arru«e-  Mll\ of \hh aor\ wUh \he lank of haace which ha4 proTe4 to 'be coaTellient in -•UJIC erra\lc aara\e 1a :rrance.  ••••rT•  ~  !hie requiel\ va• d.1acuaaed  b7  th• lederal  ot ••• Tork with lh• Secre\a17 of \he freaaUJ"7. and the ••therla?Mie  lank was adThed \ha\ \he 'beat M\hod would be for the !reaeur,y to buy the gold ii no refereee ln \he fl l•• to &BT parUclpa\loa b7 the hnd in the eon\eaplatecl lraa1&c,1oa. 2 •'l'rallaac\1olla--llq1a« aad Salllac Ool4 u4 Sll••r--Ool4--!elg1an ••t1onal !aak 1! f'il ,c 3 !here 11 ao refeNnce to arq ,raneacUon.s in \he f11•• but thh ha• not been Teri -tied with \he Federal ••••ne laDk of l•v Tork.  1 !here  4  <Jleck. Federal Reserve Bank of St. Louis  lfb.ea \he ••therlu4a !au waa\e4 4ollan, u4 the tollovinc arrange■ en\ vaa  propoa~. v;p  file hcre\a17 f oraall7 ottere4 lo -,. troa \he ••lherlu4• laDk  to $10,000,000 ill gol4 tor l-•4lat• l>qllelll la 4ollara--th• gol4 to be  •anaarke4 in their Taulta 1n lh• ....  ~  lh• 1e4eral leHrYe Jank of  and 1hipped lo the tJJiUecl State1 Aasq Ottlce la  •w  •ew Tork  York at lb• rilk and ex-  pea1e of th• ••tberland.a !aak on lh• tirat anilabl• ah. . . r.  fh• eol4 ••• to  be cuarutee4 tr•• tor ezpor\ u4er a,q clrcaa1tanc•• and lo be ••ttled. tor on  the baeia of the outta.rn of th• Ua1t•4 Ital•• Aeeq Office al $35 per ounce  l•H 1/4. !he ••therland.1 Jank replied that it would be glad to aake uee of I  \hie taclli\7, underatan41ag 'b7 lb• tlra\ aTallabl• •'•-r. the tir1t aTailahl e  It approached the  Dutch 1\e. . . r in re«u].ar ••nice wi\h th• UaUe4 Stat••·  Dutch GoTenment \o obtain ,be aeceH&l7 paran\ee ud oa April  nnanc•, obaerYia« that U •%1>•cte4 h IIOTe■enta  a.a• tu taclll \7  in th• ezchaap• aboTe gol4 export poiat .  17 coafiraed  ollly ln caH of erraUc  Such aoTeaenh had occurred  1n lhe traac-p114er rate earlier la lhe ac,alh u4 \he lelurland.1 Bau policy  of  ••lllnc  fraac1  u  Iha\  u ..  ll.a4 proftd. aaUafaeto17 to lhe■. 1  gol4 should le free for ezport aa4er all clrcaaatanc•••  \he  Secre\a17  ca••  to t hese  take \he place of the aore iatoraal IJPe ot iater-C.a\ral Jalllc cooperation exemplified b7 lb• earlier hderal •• .." • ._-Walioaal 1aak of  •lgia■  underatan41ng :  la ou reepect, howeTer, Illa tlexl\lllt7 of lhe ..rll•r later-Central~ deal-  lnca ••• reta1ae4 for '1• arr!:!l•••t waa wi\hout a 4efia1\e elate of \era1n.d1on l !he releTant correapon4enc• l• la llr. Dietrich'• •&\abllhaUoa--0.ner&l 19.34-5F. tile and in the •!raaucl1oaa--J~iag &al Selllac CJol4 an4 811••r--Gol4-le\herlan4• - led.erlan4•ch• laak9 tile. Federal Reserve Bank of St. Louis  •'an41ac  &114 wae •  facllll7 lhal \he letherlaD41 Bank coul.4 uee a,  up \o ~ .-ut 8J>•c1fle4.  !'hla •H•r wu taken ap ill Septa1-r  'h• ~ ba4 1alenene4 oa a larp  fnac.  •cal•  Oil  &D1"  1935 atler  alatlaJ' lln•• ln au:pport ot \he  A 41tteruce ln polllt of Tl• N\nen th• ••lberlan4• lank and the  AMricaa ·frea1UJ7 •• to \he aatv• ot \he lruaacUon waa \hen 4iaeloae4. Sep\e■ber  4, 1935 lhe J'ederal leaern  llaak of In York n««• ■'ed \hat th• ar-  rangement of April 10 and 11 ahoul4 tentaa,e at lh• end ot Dece■ber  On  J>ece■ber.  2 \he letherland.1 lank a11ce4 for u enen11on of one 7ear.  OD !hh re-  queat vaa refuae4 on JaAaar, 7, 1936. '-'h• J'e4eral baene 1Jank of••• York 011  fro■  laatrucUon1  the freaaur, 1acgeate4 \hat \he •etberlall4a Jule ahou.14  approach the• 'b7 cable when thq ba4 ...4 of 4ollara aa4 aHured th•• that auch  u  a requaat woul4  giftn proapt aac1 coaa14eral• attentloa.  lan4a Bank replied on 1•bn&J7 11,  1936.  that the  MN  fo \hie lhe lether-  a\ that th97 were  free to approach \he J'e4eral leHne Jank of In Tork and that \he !reaaV7  woul.4  ct••  \heir r•q••' proapt coaa14erat• alteatton waa aot of auch uae ~  to th•• for naaoa1 that the7 e\aled • Aa ••  April  17, 1935)  ezplalaecl lo  7011 ••  a,  .  followa:  a prnlou oecaaloa ( •14• oa.r l•U•r of  we oa.17 with to be able \o ••11 4ollara la thia -rket in ca1e  en-at le •••••'• ot \he 4ollar rat• ahoul.4 oecv.  lhia 11 likelJ' lo happen ln a Har fula.n.  al.mat lo happen 1u6deal.7.  •• 4o not now whether  kt lf U ahou.14 happen, U 11  If oa 1uch aa occaaloa we C&JlllOt act at oac•  kt ha•• fire\ to approach 7ou in order to aake aa  cu operate, preeloua U• will 'be loat. a-4 at the  arraqe■ea\  be■\  uder which ve  ov la\erTenUoa will  ban a aucb Daller effect.  •we ehould, tberefore, 'be cr•atq o\11p4 lf 7ou would 1cindl7 one• aore  ~ •• Federal Reserve Bank of St. Louis  7our aUenUon to \he •Uer reooaa14•r vhe\her U would aot be  . , ...  anaace  poaalbla lo  '-forebaa4 for the Aea1re4 faclll\7 1-lac Tal.14 for a  la oaaa Ille i,.rlo4 of a 79&r 1• coaa14are4 rather loa« for  oanaia _perlo4.  the pvpoH, we aholll4 al10 be o-atatul when 1\ oou.14 be arranc-4 for ue lo o\talD Iha facllll7 tor half a 7eu or nea for lhr•• aoa\ha. on \he 11D.Cler-  atan41ng \hat we could. approach 7ou for renewal towaJ"Cl1 the•• of  _~ , /: ~ _llu-ch 25. ~9)6, ~he leclaral •••rn lank -tr...lll7 lo rapi,-~.i-1 M-: ·'--- .\.~ ~ ·' ·. / •  -  -  . (  I  (  ;  •  ,.  '  •  0  f ••  ~  .._  0  - " '•  .,-  •nue a fin  .•  \  ,  half  ~-u- <.. . -, _ -.:C ,(_,..: , _: .  79ar o_r the 1uart•r. • ,I'  ,u  ,,,.  #'  !  0  ♦  •  \.  of lew York wa1 la11nc,.t \J' \be  -  I  ·  the 4aa1r• of De •ed.erlan41che laDk I. Y., .&aaler4aa, to ••eve  00-1,■ant  on \ha part of lhe tJ. I. !naa11.17 lo pvchaH p14 la lollan4  at a find rate ln or4•r that thq 11117 lab oar• of U7 ooallq9aq which ■ ipt  ari H owing lo aa44en flaclaaUou 1a Ill• 4ollar-pil4er ral• le appre-  ciate4, Ille uceHlt7 for •uch u arraac-eat Aoea no\ appear •• eniou1 •• U  apl)NNd \hal Iha free ac,TeMat of pl4 al \he pl4 ezport point  ■1ghl  ._ later-  napte4 'b7 Iha 1aab11117 or heaitatloa n lb• part of \he co... rclal 1aaDka lo aaaae the rlak l••ol•ecl.  II • • aleo 4oubtful whether 1te...r facl11tle1 or laavance  oonrap ••• a..-.1labl• al U•• aa4 la aaouh aeceH&17 lo lake care of a large  were awarruted and aor■al  MDUr.  a1q  •c••UJ7 gold ahipMnt1  Therefore th•  lato enraor411Mll7  1f 7ou woul4 aHv•  fr•••aJT 4oea ut  arranp■enta  \he■  ha•• been taken  care of 1D th•  ooaalder it expec!iea\ to enter  of thi1 u\ure a\ the preaenl till•.  \hat whll• tb• !r•••UJ7 4allna lo eoopera\e whea•••r  fea1ibl•. the pn1ea\ 4eclalon 11 ba1•4 oa a aalval relllelaace lo eater lato Federal Reserve Bank of St. Louis  an arran«•aent of \hie aa\va lllll••• coll4lllon, •z1a\ which preTeat coamrc1al 'baake fro■ haA4.lizag tbeH lruaacUona la a nor■al R7. • •70114 Ihle l•il1Ull7 clar1f1caUoa of Tl••• no further acUon wa ■ taken  reapecl lo the renewal of the anangaeah of jpril 1935 uUl the end  w1 th  of~  1936 when ihe pll4er waa n17 weak  in the 1nllch elecUona of April  tollowinc. the Popular hoat •lc\017  26 ud Nq J.  UnUl Ihle the 0Rl7 eub-  atanUal ~ld \ranaacUon1 of the 7ma4 bad been ill tlll'J)Ort of Iha tree during the earlier cr1•1• ot Kq aa4 June B.  1935.  Crilh in the hench hue, )lq-Jw  1935.  1  f Ne; , . . ~ .  !he atrencth of e\erllnc which ba4 pera1Ue4 the ha4 \o cloae out ita open poeition in aterlla« a\ profi\abl• rat•• betwea  1935  May  13 and Ma1' 20,  had coincided vlth pronounced. wakneH ill the hellCh franc and other con-  !he a«ltation of Nr. h,naa4 for cleTaluaUon ot the  Unental gold currenci••· franc  wa1  GoTermaent  gaiaiq gromad ln 1raac•, Ule bw!«et 4lft1cu1Uea of the heach re■alned.  the week of Ma,  uao1Te4, and \he Bank of lraace •• loaing eold.  11-17 th• Parle !/t ra\e ln  ~  York raqed troa  6.5s  Du.r1nc lo 6.59-1/4  and tba tr•c waa al•o weak la aterllq.  lhM\er \heae clrca1taac•• \be lecnlary ••• prepa.re4 \o ue \he ltabilisaUon ha4 one• aor• la aupport of lhe true.  •••  ■ade  On liq 17 lhe following arrangement  vUh ,he laDk of 1ranc• b7 the federal  •• thcal ~••' tor \be !r•••Dl'7•  b7 lelephou to purcha••  ap  Jle ■ e"•  !ank of Iew Tork acUng  !he 1e4eral •eaen• Bank of lew York agreed  \o $5,000.000 1n gold to be earaarked a\ th• Bank  of ha.ace in the name of the J'ederal lleaene lank of •ew York and guaranteed free  for export under all clrcuaatance,.  arranc ..enh  !hi• paraa\ee ••• inclu4ecl in all ,he  of \hl• kiJMl, bul on \hia occaalon \he fr•••V7 414 not a1k speci-  flcall.7 tor a gaaran\ee fro• the 1rench Federal Reserve Bank of St. Louis  GoTu·n■ ent  1n ad41 Uoa to \he guarantee  80  of t h e ~ of l'raace. for trance  1lp  1  !be leak of ~raace vu alhorl1ecl to ••11 c1ollar•  to Ille spectfte4 aaou\ of •5.000,000 al 6.51 or better .  the dollar• nre eold aa4  tu  .u  fraac• wen rece1Te4 'bT \he lank of hance, lh•  Bea of haace vaa aGlhorhe4 to earaark \he gold equiTalent tor the J'Neral  lleMne lluk of •ev Tork.  ftb atalhortsatlon ••• po4 for all  ••• repeated clail.7 uUl Nq 2).  4a7  Jlq lS ud  Allhoap lhe true ••• h••TT pre11ure  lhroupout \Ila period ao actual lranaactloae were carried. out l1Dller &llthorhaUoaa.  ✓  !he Bank of lru.c• vaa loai11g gold heaTlq, u4 lb• lr1Uah • ! -  ,.  23  ~  ln ·L oD4o~ aA4 on  Jxch•nl"I JqualbaUon J..ceount ••• acUTel.7 aupporUac • Mq  .  the lank of hanc• ral1•4 111 41acout rat• froa 2-1/2'{, to YI,.  Vith  thia aupport the fraac-4ollar rat• 414 no\ fall hlow pl4 ez:por\ point an4 the lillit ot  6.51 flze4 la lhe authori1aUOD1 ~ "aot vlac AMrloan official aup-  port lato lh• aarnt uUl 11 ha4 tou ao.' !hie wu la haraoq wUh \he !reaaUJ7'• aUUa4• \hat otftcia.1 AMrlcaa aapport ahoul.4 aot 'be glTell •• lone •• \he ec,14 atu4ar4 •chute• ••• fucUoalac aoraall.7.  !he•• arranpaent, 4lttere4 la fora lhoacb ao\ ~  lh• la\eneaUoa la a,:appor\  or,._truce  la Jaaaar,  4  la practical eff•d, fro•  1935. laateacl of l11tenenin«  utla\eralq la •h• auke\ \hroach Ua agenl1 \he h1l4 DOW en\ere4 la\o a cooperatl••  an-anc...a\  with th• leak of ~ c e amer which the actul 4etall• of the  eschanc-i ia\eneatioawere left al lbe 4lacretlon of tha\ Jaak n~J•c\ to ,1on •• lo rah aa4 ,o,a1 aaouat.  !here ••••  ■oreoTer,  li■ita-  an el•ant of riak  preaea, at ,hh tille which ha4 ao\ been part of th• earlier arran«e■ent. In Tork ,o ,he Bau of 1'ranc• ot 1 !he cable of th• 1e4eral leaerTe lank of llq 17 aak1a« \hi1 propoaal concla4ed. •• tollova: •we lhoul.4 be grateta.l \o 70v. ,o cont1ra lo u our 11114•r•lall4ing \ each •araara4 gol4 ahall N free for e%p0r, arq clrcua.taac•••. !hil cable la aot 1• ,he t11.. but ••• fv.rnhhe4 by th• h4eral haem luk of In York la a M110 prepared. for Jlr. Dietrich l:a .&prll 1~. 2 !here ta no rafereace ta \he tll•• lo --, aoa■ altaUoa or cooperaUoa betveen lhe lrltlah aD4 jaericu ~ • al thia llae. 3 Check Jfhe\ \he aohal eo14 ezporl polal lo 1ft York • • al lhh IIOlleat lower than &• 58- J /la.. !ILla aq ba•e ' - • lh• ca• owt.Jtc lo Ille IT•ach ahlppizac atrUce 11..•_~IU!_~! 0 ~ tile !Na■V7 la ooaflra.4 117 \he laler correapondenr- : IJ ":fih •Nl9rA.alal■ ~ taoted abon. Federal Reserve Bank of St. Louis  •w  't~ :~. . ~  0  81 Jaau&r7 Ihle wae  19)5  IM•• •• ao t••Uon of u  AOW a  l•daea\ 4nalu.Uoa of \he true 'IN\  4letiaot po1dbllll7. enn a pro1-\llU7.  Should tile lak of  hue• 4M■ 1\ aeceaea17 the atdhorlsaUona ot llaroh 18-23 to ••11 4ollara la the  •ew York urat after \he Parh •rkal ba4 cloN4 tor lh• 4.,- the trance  purcha1•4 voul4Dot •  pa14 la\o \be laK of 1raace a\11 Ill• aornlnc  and the gol4 equl•aleal lo H  creclUecl lo th• J'e4eral laHrn leak of  •• fiecal a«ea\ would be the gold equ1nle11\ ot \he followiac 4q.  •ew Tork  lhoa.14 \he  he11cb OoTermae11t 4eTalu• th• fraac onn1p, \he S\ablli1allon J'UDd would be aubJec\ lo a lo•-•  ei■llar  to that which \he Ink of 1ranc• Uaelf and other  central banka hold1n« gol4 ln Loll4on ba4 euata1ae4 when ~lan4 let, the &014  etA11dard 1D Sept••b•r 19)1. 111 order to par4 ap.lna\ \hi• rllk \he Secre\&r7 on 11&7  24 '•l•uaphe4  to \he Gonrnor of th• hcleral IHeJ"ft Bank of ••v Tork•• follows:  •ooTDIOJl. \ebalt 7ou are to  Jetor• 7ou ezecute a1q or4er, to purcha•• franc, ln our  ha•• an uderataadln« with th• Jank of ha.nee.  coatiraed b7  cable, Iba\ a.a, franca ao purchaaed will be 1mae41atel7 conTerted into gold u4 eanarked \o lNa abippe4 lo the J-4eral leeern lank of  first aTailable - ' • - r .  •.w Tork on  the  lboul4 ti. !aAk of hance 4eaire to haTe the francs  parcha1•4 in thie •rket after th• ara\s haTe closed 111 rruce ao tha\ franc•  caanot be proaptl7 4epod\e4 aad coll'ftr\e4 lato ec,14 mat11 th• tollowinc aol'"lliu, \he ~'It ot h&Ace will ue4 lo aak• 11a  'Nfor• \he laak of haAce clo•••.  -oula to be  acr•ecl  &rran.feMDte  to obta1a th• 4ollara from  Ve are w1111ac lo 4epoaU  4ollara in  ~on to their aceoal ln IM '94eral ••••rn Ba.Dk of lew  York againat ~14 earaarke4 ••  •~«et'e4 aboTe u4 \he7  can lutruct the federal  •••n• !ank of •ev Tork \o Mke allch 41apo1Uloa of \heH 4ollara •• th•7 4edre .  •· llorgen\hau. Jr.• Federal Reserve Bank of St. Louis  82  Ia -oontora.1,7 with lhe•• lAelruc\lon• \he Jecleral ••••ne lank of Iev Tork a1 tiacal apnl allered. the ton 1n which .a.erican a11i1\aace wa1 offered to the Bank ot haace.  II renewecl 1,1 authorit7 lo ,he Jau ot ri-uce ,o ••11 •,._  4-  I  $5.000.000 tor franc, a\ 6.5S or 1-,ter la a cable 1ent oa March 24 tr ·the tollow1n« coll41tlona:  •on  that it 7ou 1ell 4ollara acalaa\ 1h11 aulhor1sat1on 7ou will a4T&Doe ua \he franc eqid Ya.lea, •alue Jlq  25  u4 coa·Hr\ a11Ch true ■ into eol4 to be  eanaarked b7 7ou la ov - e oa MQ' 25 paranteed free tor export to ua  b7 firat aTailable 41rect 1\eper !VO  that •• 100n a• we recel Te cable a4T1ce fro• 7ou •• to the aaount of dol-  lar• aold b7 7ou and gold. earmarked for our account v• will giTe  7011  II cred.i\ on our booka for auch 4ollara Talu• Nq 25. 'Will 7ew. kindly •••  It alao offered. oa the aue d.q to purchaae up to $5,000.000 in gold earmarked  at the Bau of 1'r&Aoe 1ubJecl lo the uaual garantee and to be ah1pped to the Un1te4 Statea Aaaq Office la lev Tork b7 the flrat aTallable 41rect 1teamer aa4 \o be Httled for vi th the !nanr7 oa \he baa1a of \he final ou\turn of the  Ua1ted State• A19a7 Office at $35 per oace leH at the expen1e and risk of the 1'aD.k of haace.  1/4 le11 cuto•l'7  charge•  l-..41at•l7 upon receipt of  a4Tic• that the gold had bHn earu.ra4 ,he Jederal leHn• JaDk of lew Tork would credit the Bank of J-raaoe with 4ollare which 11 vae fr•• to 41apoee ot la ay "!l 1, deeire4. 1 !hie arranc-ent pro•l4e4 lhe "Jank ot 7ruce with 1  are ci'HD in a le\\er fro■ th• 1ederal l•H"• lank ot Jew Tork to the !rea•UJ7 ot J1a7 2" 1• \he •tJ-aaaacUon1--laJ'in« an4 Sellin« Oold and 111Ter--Ool4--(p) lank of 1raace 1 flle. 'l'heH three Federal Reserve Bank of St. Louis  •uace•  4ollara -la a4T&Boe of 11• aclaal NqulJ"fll•t• an4 anllable tor lh• pm-cbaa• of franea al &BT rate without wa1tinc for 1, to fall lo or below  6.5s.  1, • •  1•-dlatel7 \Aken a4T&atace of an4 OD the •-e cla7 \he S\ablllsatioa Jund pvehaHd $5,000,000 of gold  fro■  the Buk of hance under  u,  term•.  lhe otter••• renewed and a Heon4 $5,000,000 in gol4 bought.  On  J11a7 2~  !he altaaUon in  :France continued to deteriorate al\hou«h the lank of Prance contiDaed to ra1•• 1 t, 4hcount rate. which reached 6~ oa Ma7 21. in a deaperate effort to ••eve  e■ergenq  !he ge•ermDent ot Plandin vat enga.~6.  power• from th• Chuber with wbicb to  gonrn the country and aGl'J)orl the franc, and pre Hur• OD \he franc continued to  1ner••••.  !heretore on NaT 27 th• lederal l•te"• !a.Dk ot •ev Tork ottered to  purchase up to $25,000,000 in gold on Ma7 2S oa lbe aaae ter■ e •• pre•1oual7 but Secretarr Morgenthau reqa.a\e4 \bat the BaJllc ot !'ranee ahould be ad.Thed tha\ thh offer ahould be coDaidered only a, a reaen• offer to be uaed 1D caae the normal operaliona of the eomerctal banka were not aufficient to aee\ the demand tor dollara.  $7 ,5()0,000 in «old were boupt under thh authorhaUoa on Ka7 27  further $17,5()0,000 on Nq 28. OD a tar aor• T1goroua acale.  and a  A\ thla tiae the !reaaUJ7 ••• con11der1~ action A draft oable \o be eent b7 \he lederal ReHne  kn of Wev Tork to th• Jank of haac• n• prepere4 ln the freaaur,- to the effect \ha\ the Seereta17 would parcba.••  11p  \o $200,000,000 ln gold troa the !ank of  rruce MrJUrked in thelr ••ulh oa lla1'  31  ••uch  p14 lo be cuaran\eed •• hereto-  fore bJ' 7ou ••well•• bT ,he freaav7 free tor ezporl ander uq clremaataacea .  u4 \o be ah1pped a\ our opUon to the Unlte4 Stat•• .baq Office 1n lew Tor~ or to LoD4on.•  If ahipaent to••• Tork were eluted. .. ulnent ••• to be on th•  t•n• of pr••ioua trauact1oaa but lf ahlpaeDt to Load.on were elected  aettle■ ent  wae lo be a\ $35 per ounce leH Mia\ charpa leaa 1/4 aa4 leu expenHa ot trana- Federal Reserve Bank of St. Louis  g4 •blpaent lo ••• tort. 1 !hie MHag• ••• aot ••nt kl ottered lo puroha1• up to $150,000,000  111  011  gol4 oa lb• l•n• of the forep1~  draft cable and th11 otter $33,775,000 ln ,ol4 wa1  On  th1 ■  Nq .31 ,1ae '1Na1U17  bou«h' b7 the 1Wl4.  4ay the h•~ch or1a1• reached 1,1 belch\ tor lb• Chuber retuaed to  nnt tell.  A uw &O'Hrmtent Wider Bou1HOD wa1 tonNd. wUh Oalllaux •• 11nance  Miniater, and the cr11l1 appeared tor \be ,1 .. bela« to be under control tor the aoTed abo•• gold eXport point tor the uzt three 4ay1.  BoveTer, the  Bow.uon goTernaent on Jane 4 waa unable ,o o'bla1n ,he eaergenq pover1 which  11 in lvn demanded and lt ••• no, until June  7 \ha\ a new goTernment Wider  Pierre LaTal wa.a torMd and «t•en \he power, which all pr•c•41n.a: «oTerrments had 4-.anded.  During thl1 period of eriela the !reaaury renewed it, authori r a-  tlon to the 13ank of Jrane• \o eell gold to the Pun4 tor th• balance of the $150,000,000, nuel7, $116,225,000.  2  Br Jwie 17 all the $6s,773,ooo in gold purchaHd 1rench cr11l1 bad been Char,  i  i ■ported  by the Jund during the  and •old lo the Trea1urer.  A1 1nd1ca\ed on  for lhrH •••k• in July \he1u.nd wae al.molt Yholl7 a 4ollar tund once  aore wt,h o••r '170.000.000 in balano•• ½n the !rea1urer and "\he Secre\ar, ·  Special aecouat, aa4 •26,000 , 000 in Oo•eruent 1eco.r1t1••· lar auet vaa $4,000,000 la lilTer.  II• onl7 ROn-dol -  '!be 1Ulld lheretore wa• in ,._excellent  ei\UA.t1on to a11i1t \he lecre\a17 ln \he Tlgoroue renewal of ail••r purcha••• which took place at th11 \l&e . 1 In \he t11•• ,hie draft 11 •• a ■o41f1cat1on of \he apecific authori1at1on to puroha ■e $17.500,000 in ~14 •• noted ln the ten. It 4o•• not appear \o  have been HD\. 2 The releTant cable correapondence 11 ln the •!ranal'c\lon1--lu.7l~ and. Sell i n~ Gold and Sll••r--Gold--(p) lank of 1rance• tile. Federal Reserve Bank of St. Louis  ,  A.  l111111aJ7 et franucUoa1:  Jleceahr  'J  193~ue 1935.  When tbe 11lnr hrcllaM .let wul late etteel •• , _  et allTer la •ev Tork ••• a\oul  ~ cau per ea.aee.  1Ja4er  19. 1931J Ille prlc•  tu  allaulu of  h••VJ ~lac lt r••• cra4aall7 le Jul ner 51' ...,. la •••••r  al 1h11 leTel lt va1 11ablllse4 ter lhe aezl fev Mal~a. 1  1934  u4  II waa al Ihle  lenl \bat lhe fov S'abillsaHoa hll4 operaUou la allTer alreaq •••cribed (1) Ille pvchaM of 10,000,000 •uoe• la Ill• Lo114ea aara\  were carried. out: betveen Deceaber  53.os  centa lo  17, 1934  54.75  aa4 JaaQ&J7 2,  ceah  per eaca;  1935 •• a tellar  (2) the  \&ala rancla« trea  pvcha" of J,0,000,000 •uce•  fro• the Central le.Dk ot Chiaa, au\Hqaaa'17 4•li•er•4 la I.oa4oa. at Jul  oTer  54 centa per  eace; (J) the pv.rchaa• et Mlte4 town 014 all••r plaalr••  in Saigon, In4o-Ch1Da; and (4) \be pvcha1• ef 7,171,000 ea.ace• b. Load.oa ea a aterlinc ba•i• du.ring the f1rat pld acare w1\h1a the aarrow r&Age of to  24-5/16  24-13/164 per ouce .925 f1ae. 2 1.  !'he SpeculaU••  Joo■  ln Silnr:  U\er Jebl'Q&J'7 18 the price iq a,ecaiatl'te ■oTeHnt.  fJl  llarch-Aprll 1935.  11l•er 'began lo rl•• in an accelerat-  Br th• end of 1ebrQ&17 U reached 56-1/2 cent•. and  al that point a epecuhUT•  ■oTe■ent  'began.  Thie ta 4Hcr1l>M bT Nr. Q. G.  Jolulaen a• follova: •the prlc• roae 5 ce•I• la llarch aad ea j.pr112611 reached 81 cell\a. the recora poet-4epreu loll prlc•. .la a ne'Cll. t at thl • rile ill \he world ailnr price. the price paid b7 \he h•••U!'7 le 4o••Uc producer• (614-1/2 cenh) hcaa• eut of line, u4 ea AJ)rll 10 a prea1-  4ent1al procl-tioa lacreaee4 \he doaeatlc price I• 71.1 cea\1. When 'h• worl4 price ca~t ap apla •• April 2~. etic price wa• ralHCl further lo 77.57 cea\a. c l The aTeragoe 4a1q price la••• Terk fro■ WoT•Nr 1934 \o 1•'bruar7 1935 waa a1 follova: Federal Reserve Bank of St. Louis  ,u , ...  1934  1935  .5~3 .544  loT. .ber Deee■ber  Ju11a17  r.1n-aa17  (SurTq of Cvreat ,,,  ,  ; . I . - ,. . .- . · ~ -  J "'}  t ·,. )  / .  -~  1_; •  .....  ,~ ' i I •  - - - , - - - ~ - - . . ~ - ~ · - ,-~·-~---  •• ~ - · ·  •J~~ - - . . . . . . . . . . . . ..  la\erpret-4. bf \ha •ll••r croup•• la41caUec Iha\ \he hea11117 pvchaH1 wr• lllpro•lac 'badcall.7 the peaiUoa ot allTer lhroQChout \he worl4, but the prlo• .......,. \hereafl•r coaolulTeq P~•••4 th• pecallar uture •f the fl-•••1117'• peaUloa aa4 \!le arUflctalUJ' et the lacNaH4 allTH' price. !be !na1U17'• ~eltiea ha• 'been peculiar 'becaua• U Ila• \Ma 1uba\aatlall7 Iba •al.7 blJl'•r on Iha world (Lendon) ll&J'bt, ucepl tn leaperaJ7 period.• of inten•• speculation. !'he pric• ha• hen arUflcW ltecauN U ha1 pnerall)' bffa the bl4 price ef the frea•UJ7 u4 aet a wrl4 price at all. Con1equnU7, onr a perie4, th• !rea•lll"7 able to ua the world price --,,Mac U 4o ■ lrea, .. l•ac a• U la wlllin« lo \ak• up \he entire otforlmc •• lh• aarat al \bat price.  baa•••  •Vheu lho freaa1D7 aleppe4 b111'1JIC ea .l.prll 26 'beca1He Ille •P•cula\tr• were am,illlng lo ••11 la fZJ>ectalloa of tvther price ri•••• the urke\ began lo fall oft.•  !he a\erlu« acqulrecl  'b)'  \he hn4 4v1ac \he pld •car• and Nleate4  aubHquentl.7 h tho !reaaU?7 ter th• pvchaH et ellTor ln I.oa4oa vaa tor the aoat part cUapoHd et befoN th• price ri .. became pronounced, aad durin« \he period of rap1417 rteinc a11Tor pricH the pvcha••• of the hnd nre later-  a1ttent and on a -11 acale, aa ahown b7 Table  3 .  ,., fable ? Specific Authorisa,lona to IUJ lllTer lJ LoD4on: Jebr\1&J"7 19-j,prll 25,1935.  Date  I. Prlc•  (peDCO per •••• 925 flu)  7ebn&J7 Karch  April  19 27 27 g  600,000 350,000 275,000 ltoo,000  25  1,300,000  7  25  25-11/16 25-11/16 27-3/1 2S-1/2  35  !he !reua.r,- 414 aot ooapletel)' w1\hdraw frea lh• arket oa jpril 26, but  •cal•  had••  j I  \hroyh \he 1D41ca\e4 'bz: !able -i . 1 ·!'he 'l'rea1urz an4 Jlonetarz: Pelicz 1933-1931, B11Jari UnlTeraU7 Pnu, 1939, p.lSJ . 2 •'fruucUon• - BaTing and S.lllnc Oel4 &114 1~ - lilTer •uonal Bank - Bannre !ruat Oo. - •at1eaal CllJ' laak: 8 tilea. .  continued to aupport it on a aaall Federal Reserve Bank of St. Louis  Cha••  87  q lpeoiflo a\llorlsaUou '° h.r lllt9r la l.olMloa: 1935 !alale  grll 26-Juu 17,  Ouce,  April 29 lla7 2 I  9  21 Jue  250,000 1,000,000 1.~.000 250,000 300,000  4 6 6  ~  • Price  Prlce  (peace per 01 •• 925 flu) (cea\1 per ••·  34-11/16 )2-)/1  )2-J/16 )2-1/2  71'.57  1,000,000 100,000  12.10  72 .110  72. Ila  250,000 250,000 780,000  14 17  .999 tlu )  72.91 72 .36  9,~os~ ODI  !hie table ahowa that wheD lh• 1un4 laa4 411poae4 ot llllaetanUall7 all Ua  aterlinc balance, •ze9PI an uount ••4•4 lo 'r-7 for ailTer purchaae4 in la1gon2 it ceaaed to 1ut!'1lct it1 -«9nt1 to bq 111Ter on a aterllnc ba111 aa4 chanced  to a dollar baaia. 3  ».  Jul.7-Decnber 1935, an4 Iha  Peginc the Sterllq Price of 811Ter  AccuaulalioA of Silnr bT th•  rwad.  !be aubatotial lilnr pa.rcha1H of the had ln \be tire\ half ot  were regularl.7 lapor\ecl and aol4 to the !rea1UJ7.  41• of Jlll.7 414 lt hol4 auch onr $6  ■1111ona  1935  .lt ao Illa• prior \o the  ■ icl-  in ailnr an4 in the firat part  ot Jul.T the cr••l•r part of Ua hol41nc of $4,JS2 ,000 va• in traa1U troa Ia4o-  Chlna.  In the al44le of Jvl.7 lhia pollc=7 waa chaJace4.  the •ll•u- aarke\ on a larp acale, llol41ac \ he  ,,,  65  !be h•••UJ7 eatered  •ew Tork price al  aligh\l.7 ner  cenh per omac• •• ahown in !able ) • 111Ter pvcltaHa becaae \he ■ala,  ai.oat the 101• buin.eH of the rod which accaav.l.atecl large bol41aca in 1h J.  ovn hand.a ( Chart ,_L. ) in a4d1 Uon •4e abrlly aTailable lo the  fna•urz:  1 •fran1actlon1 - 'BaTing and Selling Oold aa4 lllnr - lllnr - Chae• latioD&l Bank - Banker a ~uat Co. and laUonal CU7 Juk• fll.•• .  2 See Pa«• !", L . 3 !here 11 iao,hin.«~ the file lo la41cate wbe\her IMH allTer purchaHa were ll&de to bltead.7 fll aarket durlnc Ua 4ecllu or lo 1appori 1 terl1n• -.. al nr Federal Reserve Bank of St. Louis  gg T £ ( .(..(.  s-  £nnce et Jla11T Price• et lll••r la  !fl' Terk "7  J1Uf-Deouber 19~5 ( oea\• per ••. •999 fl  llealhe:  fte had waa nplarl.7 ln \he  ter pvcha1e1 ader Iba Ill•ez· PvchaH £et •  aark:et lob~ aterllng tor ,11e purchaH et 11lnr la Lea4on fna D.ceaber 5.  la.17 I  ,e  l>viac 1h11 perl-4 1\ pvcha•ed fer Ua eva ac~ut abeu\ 170.000 .000  OWlCe ■ aD4 aad• ■lerlinc  28.000,000 eace1 Nre.  2  aTa1lable lo \be !reaau.ry tor lh• purcha•• et a1-ut a4 ill lept•ber the ha4 Uaelf' hel4 abeu\ 126.000,000  ew:ac•• et e1l•er. PrellaiJl&J"J OperaUeaa:  1. On  JW-7 9 and  10,  1935 \ha  lal.7 s-10. 1935. 1wa4 reeatere4  3 u4 begpt abeu\  Um• liac• Mq 20 \e \he  ,u  1\erliq aarkel fer lh• tlra\  at fna 4.96 le  ~.91.  u4 eel4 11  '1-•••UJ'7 ter the purcbaae et all•er UM!er \he lilnr Pvcba•• £ct,  aa4  •• lal.7 9 1\ beQCht 350,000 eaac•• at a11Ter lhr•ach lt• aceat1 a\ 67.21 ee1a\1 per •ace. Peaine a\  2.  )O-J/164: Jal.7 16 la Mpal 10, 19)5.  1Na Jal.7 16 t• Aagul 10 \la. 1u4 \e-.b\ 1l1Ter lhr•ach  ac•t• et  the  ~••ral le1•n•  -.U et •v Terk4 al  rua  \u  4ealpa\e4  flze4 prloe.  1., a  •••nc•  fer ,hh pert-4 1 1\erlly rate et 4.96-1/~ wh1oh vaa appnnaa\ey lhe 1 Sur-yq et Cm-re1at Bllaiuaa. 2 O.apiled fr•• lpeeific Aa\herl1atl•••• ezoepl fer ellnr pvcbaHa fr• llU.1' 16 lallk ef I• Sept. 9 whlch an lakea fre■ a •••HA4• et lbe ~ed.•ral aa\herisaUona apeolflc • r f terk ie Mr. Dietrich, j.prll 19162 . Jf.J eapllaU••• l••• fer \h1• perled. \baa \he aolaal fl~•• •• '11• a\at_n, ln were  •••n•  ••v  •••  the text 11 prebabq a allpl ud.ereat1•1•.  3 "Tran1ac,1ena - ~1DC and Selliac ~•nip lxchaJlce - llerllac - .iatherisa\ion,~ 4 !he ChaH laUeul laak, \be lunra hut Ce., !he G•re.a\7 tru, Co. and the lational Cit7 laak. Federal Reserve Bank of St. Louis  89 Ihle la lhe eqaiTalea\ et 67.3.3 oeala per euce. 1 2  alaeat a 4&117 1"1T•r , u4 acqaln4 enr $JO  ■1111ea. 3  Ihle prlc• \he ha4 wa•  j.\  lt5,  e11110•• al a ce,t et eTer  la uac:11Uac lheH pvch&.. , Iba hcleral •••n• luk ef Wev  Jerk vaa C1Tu lb• epUea et ollarc1ac Ille l•cre\ar,'a -,.clal accea\ 1n 4•1lara er 11• aceeut aa tlacal apal vl\h \be C.aMquatl.7 the ha4 wa• in lb•  ■amt  laak et laclaJMl la a,erllac.  fer alerllac a• well a• allTer whll•  Ua 4el1pale4 acenh were ia4epea4ea\l7 la \he 111Ter la LeD4ea .  ■arket  fer aterllac I• pq fer  We a\erliq \al.a.:••. heweTer, acc•ulate4 in the ham• et  \he J-ma4 al Ihle llae.~  3. AbHrpUea et KeaTT Otferlap fru th• • • '  aa4 !raaaiUea \e a  •ew  llerllq Price.  !he efferlac• et 111Ter, eepeciallT fre■ Ch111a5 becaae lacnaliacl.7 h. .T7 4v1ag \he perle4 when  ,u  Lea4ea price •a• bald at 30-3/164,  the te\al pvchaH1 a\ \bat prlc• \elq  ■-4• fre■  ffH'  a thlr4 et  .UCUt 7 le .UCUt 10.  0a  .UCUI 12 \he hB4 bepn le le\ \he 1\erllnc price fall 1lightl.7 but en .UCUt U eace  Mn  pege4 U at  tev 4qe ••r• •• telleva:  294 per euce. !he pvchaH1 et th•  15  rua4 en the••  6  0ue••  Dellar Cea\  6,300,000  $ IJ,21'5,000  11,15(),000 21,000,000  10.096.000  ~  l.13«Ut 12  ~~ 15  ~ 1  Joo 1000  ii.3, 750,000  !otal  7,  .l1"  t25,275,ooo  1 let calculated.. but taken fr•• a apeclflc au\herlaaUon of Aacu•t 7. Oa \bal dq the hDd wa• ~lag 1terl1ag at ~.96-1/~. fte rUC- et \be hat'• 8'erllq pu:rchaaea tr.. Jul.7 16 le 10 • • ~-95-5/S le ~.97. et ahlpaeat le Iev Terk waa approxillahq ceala. (fill la) 2 •• purehaHa were -4• Aacua\ 3-5. r 3 C.apiled fre■ apecific aa\herisatlo•• which ahew "5,575,000 ••c•• at a 4ellar cut et $30, n,,947. fhla u4er••U•\ea \he ac\llal. ...uh becaue Yer • • ften del ••r•d la ezcea• e e - • 1 oea race er. • e era  •••n•  e  •  •r .  4 Veek17 balance ahee\1. 5 JaaH G. Parh - '8er1C&ll •u1arz Pellc;r 19)2-1, p. 6 C.apiled tre■ Speeltlc .l1l\hffisaU••• I lllTer. Federal Reserve Bank of St. Louis  • (oheolc frn 'beUer eource)  frea1unr fer Ille pvcba•• et allnr 1M lllnr PvchaH .&el •• Aq,u\ 12,  13  aJl4  14. 1 Uader Ihle oeaceatrale4 e11ppert •l•rlt.c " " te ~-91-1/~ ... ••  1e11. .. -prtee et rilTer  •ttcb' 1a Lelli•• ... te-,,nrur •t.8117 at eMn "  aena  pea ••e-2~  ~er \he re,, et A11C'fU\ •l•rllac wu •t•-47 a, abe•I ~.91 aJll4 lh• price et  ■ il••r  b7 the hn4 va,  wa•  pegged at  294, •• tha, lhe 4ellar price et the  kept wUhin the nap  apprenaa\•17 Miataine4 u.Ul  Le••• \eqh\  et 65 le 64.9() ceata per •uc• which •••  Dece■ber  5.  fh• h-4 414 ut pvcb.a•• a44U1eaal  at.erling fer the !r•••UJ7 in Aqua\ but ceattau4 to ab1erb large,, et ailTer t.alciq fer •ZU1Ple 11,650,000 eac•• ($7,700,000) ea  4. SOO, 000 •uc•• ( $3 •120. 000) en ••r purcba.. • 4ecl1ned. but. tba  9 ~illC  ~  M4erat• ..ount.a at gp te  etferlaca 4la1nhh•4 lat• la  lated.t■ed.erat• ~.  .lupa, 20  .3,iat.  19  &114  !evaria \he •D4 et Aue- t,  th•••  va• la \ha aarket. apia tn■ Sept•ber ~ le  29-3/164 per  Aqut  euce.  A1 th• preHve ef •ll••r  u.4 •arl.7 1n Sept.•'b•r lh• had.  al•• accmm-  •l•rliac balaac• which ea Sept.. .\er 9 uaeutecl te $3,529,000.  !he ha4 1• lept•Nr  Dviac th• parted fra  e11-  4  1935.  J.J.7 15 I• lept•'ber 9 the hll4 pvchaae4 111Ter  threQCh 4ee1pate4 __..,. u tell•a:5  ••c••  1 Specific Aa\herisatl••• - l\erllac. At r•ach17 I et ailnr per~ eterling '1th pr••14e4 fer a44Uleaal pvchan• ef J,S00,000 •ace• law•••· 2 GMs. 1111• • • ,aet .... -ealOtia•.t. 3 lpecific .&atherisa\leu - lll••r ~ Veelcl7 balaace ■beet.a 5 rtcv•• •applied 1', \he ~••ral ••""• .,_ ef • - Jerk la a •--r•.a- h Jlr. Dietrich la April 19112. Federal Reserve Bank of St. Louis  91 llarkel Ia WhichPu-cbaae4  hllar Cea,  Oao•• . 999 ftae  La••·  IJ3,6",910.95  $21,620,555.67  92,5~.135.51  61, 1166 ,352. 75  llamlar et PQ"Mat  Pal4 '• 4ealpate4 agent, tre■ i-..•a a/c with lank et laglaD4  £5,770,927-1-1  Dellara pa14 te 4aalpated age1al1.  ••1-7  136,199.7~.1'6  90,016.908 .112  216.117104  114,747.43  Pa14 te 4a11cna1•4 acent  £37,000-0-0  fre■  had'•  a/c with lank et ~ud.  136,ltl6,633.50 Of \ha 136,000,000 euca•  •99· 2l1 •655 ·15 et lil·Hr lh•• 'beuch\ 'bT the hn4 anl7 abeut  16,000,000 eUACa1 bad been Hl4 te \he freaaver u4 en Sep\e■ber 9  u,  et lil•er reached lhelr peak (Chart 1- ) ef abe11\ 120,000,000 eucaa. abeut  90,000,000  eucaa were hel4 ill. L•lld••·  l  hel4lnp Of  lhia  ~, thia UM th• principal a1Hh  ef t h e ~ were•• tellew1:  (000 ..1tte4) Dellar Aaae\e Accent with \he freaaver Special acceu\, 1e4eral Jerk laak et  •ew  Harliac  lll•er  96,931  h ■ ene  3,129  n.915  neraat,ar all••r purcha••• ceal1aue4 .. a aaaller aoal•, ._, \be allnr lapor\ed  hn4 ha4 paTN a •alu.bla acaaq la the haa4• ef the S.cnl&17 aet •al.7 la 4eal1  wilh the feral Weekl.7 balallc• ahaa\a. Federal Reserve Bank of St. Louis  92 atlTez· pvobaHa a'brN4 ba\ alH ta tactlUaUac \I» erderl.7 \ruder et the ailTer Uaelf lo \he UaUecl Slat••· £210.000 ~ , aterllac at  J••'  Oa s.p1 ..'ber 10 \be ha4 'beqbt abev.t  li.94  enr  fz-••V7 tor \ho pvcha•• ~ allTer.  ht Mlataiucl aac1  Oftll  lllCN&H4  u4 nlaued a\erliac  U th• 4lepeH4  a56,000  et all 1'•  h  \he  ape\ aterling  u, l•ac peeUlea '7 purchaalac £ ...  c--r1, tor 4elh•21 •• Och\er 10 , 11  ~u......  u4 14.  0a  sep,..\er  '•-chi a fll.rlb•r ~q5,ooo a\erllac ter 4ol1T•W•• Oc\o\or 14  U ud 20  u 23  aJl4 •• lep\•b•r  le 25 neatere4 Iha 1l1Ter aarket la Lea4ea \e ~ ~.250.000 euc••• acq1lir1q par\ et \be l\orlinc \o -pq tor lh1 • la \he ape\ llal"ket u4 ala• purchaaing aa adcl1Uoaal C5,000 fer 4el1T•rJ' h  0a lep\e■hr  lhe freaaver.  26 U naued.  11• purcha••• et a\orllq ter Oetober 14 4ol1T•1'7 am b7 Octe\er 10 bad added a  tv\her  te ite oea\racla falliq 4u •• \hat 4ah.  During Sept . .'ber  the r\1114 wa, apparentl7 put\iac it1elf ln a pe1itien te •••i•t ln car17iac out a an 4etlal\1T• pegiJIC of the prlc•  ut carreatl7 req'11N4. fro■  1  et ellTer  '7  !he all••r beagbt after  pnT141ac l\1elf wi\h 1\erlia.g Septe■'ber  10 waa acquired at  29-J/16 I• 29-15/164 per ounce u4 ea Octa\er 11 Iha Stabllisaliea 1lUl4  began l o ~ 111Ter Nplarl.7 at lh• lalter ti.pre . 5. Peg 'at 29-15/164 October 10-Deceaber 5, 1935. he■  Octa'ber 10 \a  Dece■'ber  5, 1935 e\erliac wa1 1lead.7 wl\hln a ranee et  4. 91-1/2 h 4. 94 wUh a cra411all.7 rhlac \ea4eaq \ftar4• lb• •• of lh• period . !etveen oc,eber 10 and 25 \he rlUl4 \eaght G •l~llea eterllac tor rel••••'• \ he !rea1urer to purchaa• 111Ter in Lell4ea aa4 a fvlher -11 ...., •• 'fhia waa 1utf1cie1l\ h l !hit 1• 1Dferre4 ••  ••Te■be r  e11abl• th• !reaaver to pvoh&H abell\ 8,000.000 euno•• there la uthiac la the tile• ,e 11141ea\e \he r••••a fer the accllllUlatien et 1\erlin« coA\racl• talllag tu•• Ocleber 14, 1935. Federal Reserve Bank of St. Louis  20.  93 ot all••r al tbe peged price.  !hereafter troa Oclo'Mr )0 lo Deoa\er 6 \he  lo the freaaurer autflcien\ alerllnc lo J>a7 tor a apecltlc aaahr ot oucea of 11l••r.  !he•• au\horiaaUoDa proT14e4 la all tor Ille pvchaH 'b7 the heaao.rer  ot 12,270,000 of  ■ilnr  OUCH.  1  At  lh• .... ,,._ \be hJMl - · acai• a ..11.T purchaHr  lhroach \he 4elipated aceah of th• ~e4•ral ...."• laJlk ot In York  al the pegged price.  letveell October 10 aa4 Deca\er  5  1, NQPt approztaahl,7  2  29,275,000 ouac•• la thla wq.  !hie u,,~atenenttoa in lh• 1llTer aad aterllnc -.rot 'broa«hl \he Stabilisation hnd'• purcha••• ot allTer lo onr 170,000,000 ounc•• 1lnc• the aterllng  price ot allnr waa tlrat pegged la 3ul.T 1935, aa4 lta pvchaaea of alerlia« tor releaH to the !rea1urer to an uout aufflcient lo ln1,- about  At no tiae, how•••r, after to accmaulate la  &IQ"  Sep\e■ber  aubatanUal  oaac••·  9 414 the had. allow l\1 alerling balance,  a■ oual.  !b• a1lnr preTlou1l7 accaulated and  uwl.7 'bought in London waa craduall7 ilipor\94 and. aold to the !reaaurer and on Dec..ber 9 the  1und'• total holdlqa w•r• reduced to 43,447,000  hol41a«• were re4.uced to 26,000.000 · ouncea.  and lta LoDd.on  !h~ae were all l■por\ecl b7 Dece■ber 23  but at the end. ot the 7ear the '1mci'• 1ilnr waa once aore increaaed b7 aubatan\lal purcha••• in Cbiaa.3  ,  c.  fb.e Difflcul Uea of Cblaa u4 the ha4 1 • ~ar kllerll PurchaH1.  !he bulk of th• allnr purchaa•• li, ,he s,abllisa\ion YUD4 were la aupport of the 1llnr aarket in LoD4on \ut •• laa1 been iao\ecl a aal>er of transacUona 1 Coap1le4 fro■ lpecitlc hthorlsaliona - lhrllq. f1CQN• ahoula perbapa be checbd fro■ tu accoatlnc record••• \he7 lmloubtedl.7 con\ala ao■e error . probabl.7 being an udere1tl•t•. 2 Specific £uthorl1atlon1 - 8l1Ter. s... co•••t •• abo•• aote. 3 Weekly balance 1heet1. Federal Reserve Bank of St. Louis  !he••  were uaclertakea 4lrecl wllb \he hr ••'·  -!be flral of \beH • • the pvchaH  la lon■ber 1931' ot 10,000,000 oaae.. tro■ \he Oea\ral la.Ilk ot ChiDa at about  _r-y.  -« cenla per ouce.  Ihle wraa tollowe4 la Jla7 b7 Iba pa.rch&H ot 4,663,174  ov.acea of 014 claoaetlacl Ia4o-Clliaeae plaaln• !hie traaeacUon w1 laUlale4  .925 ttu  la Saleon, In4o-Chiaa ,  ,u 4e Parb el 4•• Pqa Jae acUAC pre-  '7 Iba . .  naabl.7 u agent for lhe heach lalo-Chlae .. eonnaeat la lalpa who ••ba1Ue4 the otter lo Hll lo Ibo luk•r• frul Co~ of  •ew Tork .  !hie pvchaH wa•  tor 4elln17 of Iha pla1trea on \oarcl \he Merlcaa ale... r Ool4en  Draco•  which  wae acheclulecl to aa11 oa Jae 3 tor Saa h-aaclaco, u4 , •• ha1 been aoted abon , •a• paid troa tbe ha!' 1 l\erlla« \alanc•• la Loaloa oa Jue J.  In the ••an-  vhlle the Central luk of Chiaa wa• ezperleactac UttlculHe• ln 4el1Ter1q the 10.000,000 omu,ea pvcba1e4 b7 lhe hat aD4 also la akin« 4el1Teriea oa  1 25,000,000 (1) ouce1 purcbaae4 41nc\ )T \be heae1117.  0a Jue  J, 1935 the  Central laak of China wrote \o the C!laeelau a1ldac tor u eztenaion of deliYerie1 both on the Stab1111atioa 1uacl pveba1ea and. \be other !reaaUJ7 purchaaee ln  which the rea1oa1 tor Iha 4elq la ahlpaeat were .., forth.  !he  ri••  ln the  aterling prlc• of allnr la Loa4oa froa abo~I 24-1/24 lo 32,-1/24 and eYea higher aa4e it 41ft1cult for lhe C.atral lazalc of Chi.. to obtala e11Yer in Shan«ha1 for 4ellT•J'7 againd \he earll•r eoalract•.  lloreonr U had cauae4 a shortage of  caah 111 lbuchai and a ••rioue looal eN4ll 1UuaUon.  !he Central lallk of China  colll4 ao\, therefore, export a11Ter fr• lba11«llal al Ihle 11••· ncge1te4 lo the  Cha•• llaDk in a eabl• of JlaT 2~ lhal  » had.  1n tact  Ille ailTer ■lcht be 4elinret  to the ChaH lank 111 Sbaybal but not ezporte4. fbh letter va• lraaaa1Ued to 1 !here are oal.7 iDdirec\ reference, to \hi• purchaa• la lhe file• and thia ahoul4 be checked fro olur eou:rce, . Federal Reserve Bank of St. Louis  lh• !na•V7 u4 . , the Nqua, ot llr. Lochhea4 \he CbaH laak ca'ble4  '° u.  lbengba\. \reach oa lal.7 22 tlaal lb• U.lte4 Slat•• !raa•UJ7 had. a4er coa114aratlon a plan lo accept Ille 11114•ll•ere4 ellnr 1n Sbaqbal ill aoa\h.17 10,a of 500,000 ouacee pron4e4 Iha\ Ille Cbaae laUoDal luk wou14 eta'8 Iha, Ihle • •  It lu  aate.  Cha•• luJc la lhe•ghat. ooaa14ered lh• arrange..nt •at• Uva, to  ad.Tl•• lh• Central luk of Cblu of the plaa all4 lo l1M11lire whether each u arraap•at wou.14 lea4 to ezpNHlou et aore frlu417 teel1q coacenlnc th•  aerlcan a11Ter procru oath• part ot Chiu•• ottlcial1 la \heir public atate••nla.  Cable• were rec•l•e4 fro• \M Ceatral Jank of ChlD& 9'aUnc that a repl7  to \hh propoaal au\ N ••lqe4 hcaua• th• J'la.ance •talater  ~~  !hla plan"appe&NIII lo han '-•• carried out an4 oa Sept•ber  out of town.  wa■  30, 1935, par\ of  the arrear• oa \be all••r \oqht 41r•ctlT '7 \he !reaa\U7 (2 ■illlon oucea) waa  4•11•erecl la Loaloa u4  tu  2  ■illloa  oucea eUll ouh\andin« under the S\abill-  •aUon hnd. pvcha•• were exlen4ed further to loTeaber 30. 1935. 1  In the Mamrhile \he Stab111sa\ion Paa4 had pvchaaed on Aa«1:11t 22, 1935, 2 2s6,ss7 ounc•• la lo■bq through the laUoaal CU7 lank at 24-3/lkl. !hie a11Ter vaa in a tona of 'bar• DOWD aa •broken hill •elter1• an4 ••• ahipped directly to the tJa1 h4 Stat•• on Iha Aaerican ate&Mr Pred4ent Adaa•.  tor 1a 1terling fro■ the In loTnber  1935  had.'•  !he co•\ vaa paid  account with the lank ot bgland. 3  Cblaa a'bu4ou4 the lilnr ala~ri and. \be heaeury Lo  taaagurah4 a uv poliq of allTer pvcbaN1 whicb _. 4eacrlbe4 b7 Jlr. O. G.  Johneon u followa: l •!raaeacUona - Sil••r - Central lank of Cht.aa•~ 2  s••  page9  lee)%•  l~ i:  ·s:D~  3 !here 11 no\h1ag ill \he tile• lo 1n41cate wbJ' OJUJ' lhh 11~1• pvchaH ot pU wa1 ad• in lo•be7 4ur1Ja« ,he perio4 wh•• ,he 1\erllag prlo• of 111Ter wa1 being acU••l11upportect 1n London at a aterUq •to.lTalent of about Federal Reserve Bank of St. Louis  65  cents.  96 IIVh•r•a• preTloual.7 11 ba4 alaoe\ ezclu■ inl.7 collflae4 l\a forelp opera\lona to \he Lon4on aarket, ahor\17 af\er \he 4epartve of China froa lbe dl••r daa4ar4 U laaac,arate4 a pollq of cUrecl purchaH1 of •il••r elHwhere. An-aa«••nh were -4• wher•'b7 the ••tlr• all••r proc!uc\ion of llezlco, about 76,000,000 ouae•• in 1,35. ••• to 'be acquired. by the ~Na•ur7 cllrectl7 at th• cvren\ •ev Iork price, aa4 alailar direct pm-cha.. , wr• ananc-4 vUh China.• fb.eH 41rect pvcha••• froa Cblaa wen arr&IICff Nlwen So••••r 14 and. 22  frea1ur7 aubllitte4 a b14 tor 25  ■tllloa  oac•• of 1llnr t.o.\. AMrlcan ateaHr  in Sbancbal aot later \hall 1ebruaJ7 11, 1936 al 65.17 cent, per ounce .999 fine !he C.atral lank of China accepted, e\atl~ that  to the Central Bank ot Chiaa.  it wa1 a.ll%ioua to aak• the ahipaent1 •• aoon •• po11lble \ut ••• unable to deliTer all the ailTer in fine bare .  .A ao■what  lower otter was then made b7 the Trea1ury  (64.0J) for bars of le11er flaeneea and the heu11r7 1ttpulate4 t1-t the be b7 Aaerlcan 1hip lo San J'ranciaco and not Tia Sus or lew York.  ■uat hr■•  were accepted and on  on the ....  ter■ a.  loTe■ber  ■Ulion  !heae  oecea were pu.rebaH•-  Co11Hquntl7 \he Central lank of Cbina undertook to 1h1p  52 alllioa ouc•• lncludin« \he 7ear.  22 another 25  ah1p■ent  laat 1utall..nt on the parcha•• of \be previou1  !he a11Ter ••• ude aTa1lable to the agent• ot th• !rea1UJ7 ln the Taulh  ot \he 014 Jank ot China buildiq in lhan«hal aD4 \he Chiu1e M1n1ater of ~lD&Jtce ezpreHed th• wlah to leaTe lh•  U.■ e  of 1hlpMn\ enUrel.7 ln the band• of the  tP-  !be !J-eaaUJ7, hovenr, 1ulate4 \brough  u,  agenh upon the original 2 leraa of ahipaeal and. ,he allnr ••• actull.7 atdpped ia JanUJ7 1936.  !r••Ul7·  On,. balance •h••' of lhe hD4  l>ece■ber  31. 1935 \otal allnr hel4 waa  ~6.652,000 repreaentiy lh• ••I Nault ot the••  Chi•••• pv.rcha.••• aD4 lh• aale  1 G.G. Johnaon. Op. cit. · pace 184. fhl• ao\a\loa 11 laHrt•4 1a order lo proT14• th• n•c••••l7 ■ iniau■ bactcroun4 \u\ ahoul4 'be replace4 b7 41Nct frea•lll7 aourcea which are 110\ a•ailabl• ln \be tll••. 2 !he detail• of this purchaa• of \be 50 ■1111011 ouce1 of 1llTer la •oTe■ber ahould be checked. G.G. Johnaon atat•• Iba\ Ille arranc-Mnt ••• a 90-487 option to purcha■ e and that $10 ■lllioaa la col4 •• ear■arkad for lh• C.atral lank of Ch111l;. in rebrU&JT •• part pqaen\ tor \be ail Ter. I fla4 ao reference ■ \o \hh in the Stabilisation Jund file an4 the Int ahoa.14 M carefull.J' checked. Federal Reserve Bank of St. Louis  J /  \o \he !n&SUJ7 of ailTer 111por,ed  52  ■illlon  tro■  London.  omu,e, ot •ll•er were la tranai\  tro■  Oil JaaaarT 13 \he ••Ure  Ctuu.  81nc• a larp porUon  of the Chia•H eilTer (1'0.000.000 ouc.. ) had to 'be HD\ to \ha lel)T Plaat of the Aaerican Retlnla« and Sultlnc Coapa117 tor refining \he  cradaal 41apoeal ot  thi1 eilTer b7 the Jund to the !rea1UJ7 look a couiderable \lM. atll  Au«u•t 31, 1936 that it wa1 coapletel7  f.  , · , ·:- :  A.  !ranaactioaa of \he had:  4181)01•4 of.  II vaa aot  1  1936.  Minor S1l••r !ranaac\lona.  !he 111Ter purchae•• ot the 1uDd at the leTel of  65  cent, per oace o.... •4  on Dec. .ber 5, 19352 and. ahorU~ \hereatler \he frea1V7 wUbdNw U1 elZp!:>orl fro■ \he I.on4on a11Ter aarket. !hh Mrket •tor lhe first U• ainc• 1914, waa  forced \o euapend operaUona when no other ba.yera appeared and the bqe 20 a1ll1on oUDce1 vaa offered..  la  lllll  ot  B7 Deceaber 20 the price had collapaed to 51.75  ••v Tork ud 48.29 ln London.••• ftle  aharp 4ecl1ne in the price ot lilnr  49. 75  waa haltecl '7 \he trea1U17 on Dec••r 24 at u\11 \he 111441• of Joa&r7 wbea 1,  V&I  ■OTH  OD  per ounce vh•r• U ••• pegged  5 ceah IION~3  Vbe11 \hh r•a4Ju\Ma\ 111 \he l.oD4oa price of •1l••r 4owmrard.1 had brou«ht  it" lo about 45 oenh per ouce a11Ter aarket la LoD4oa.  \he lta'bllisaUoa hD4 rHa\ere4 ■oaentaril.7 the  Je\v.en laaaar, 6 and 17, 19)6, U bough\ 1,250.000  ouc•• in I.oa4on al price• gradual17 clecU.Alac troa  45.72  cenh to 44.42 cent1,  a, a coa\ ot Ju.a\ o••r $6oo,OOO. fhi• dlTer waa paue4 on to the fna•urer.4 1 Veekl.7 balaace •h••t• (He Chart3 ) •  2 Specific Au\horisa\1oa1. 3 (). (). Johnaon. Op. oU. Pace• 184-185 4 lpecit1c AQ\horisatloa1 aD4 we•klJ balance Federal Reserve Bank of St. Louis  eh••'•·  98 fh• hn4 414 ao\ lhereat\er aake pvch&Ha ta J.oaton a.atll after the frlparUte  Acn•••nl.  0. Oclo1-r 19, 1936 H apt.a \ecaae a ~ r for a\out a week 4vlmc  which th a«•n\a were laatnacled. lo pa.rchau  43.47 cenh \o ~.07 cea\1 per ouce. !'Illa the •n4 of J'ul.7, 1937.  l  11p  \o  2,1'5s,ooo  alh•r ••  ft.ereaf\er \he part lclpaUoa of \he ha4 la the eucu-  future lllTer coatrac\1 aa4 l \ reappeared in \he  J'a.17 to \be •114 of Aaguat 1937.  aD4 \he fir1\ fn daT• of •  LoD4on.  1938  1\  •n York •rat •• a pvcba1er  I  Dvia« \he laUer par\ of 1937  waa once aor• a ...11 1cale bQT•r of ailnr ln  I  ln addi.~ton \he 1GD4 began \o  C&JTJ  ou\ alaor tra41q \ranaacUona ill  \he 11lnr 11arke\ in LolMloa begt..anlac •oTe■ber 6, 1936. or debit, n1ul\l11«  tar •• •rat 4•al-  !he 1ua4 wa1 an occadoul pa.rchaHr all4 Mller of SePWud/  1np were coacenae4.  fro■  fro■  lt.el4 '7 Iba 1u4 utll  1 lon of \he fr•••V7' 1 11lnr pollc7 wa1 on a aaall eeal• ••  of ailTer  oanc•• a\  fro■  th•••  ne  1hrl1nc credU1  aaall opera\10111 were regularl.7 liqul4a\ed and  a.-  the balance ln ._. ailTer tra41q account m  an  opened at \hat  U ■e  -..-t ne••r  reached aubataatlal proportion• . .bide fro• th• 11,o.14allon of it• a1l••r holdlD«9 the \lon• of the 1a.ncl in  ■-Jor  a11Ter traaaac-  1936 were the ue of 111Ter a• collateral for •zchaac•  a\abill•atlon arrangeaen\1 aad.e with Jlexioo all4 China. J.  !'he Jlezicall  .tcr•••t.  On l&nwa!'7 7. 1936 \he hcre\&J7 ot lh• fre&aV7 _w ro\e lo lu 1e4•ral le••"• :Bank of lew York enclo1lnc .• ton of le\\er approTe4 b7 hla lo )e ••n\ to the Banco 4e Jlexlco b7 the ~ed•ral leHn• •• tlloal ageal.  !be lecN\aJ7  1\a\ed that the \raneact1ona \o be carried o•t Gnder \he \era, of ,h11 let\er b7 the 1e4eral lleae"e Jank of In York were to N pnnaed 'b7 the gezaeral f11cal acenq letter of 1 Veekq balance aheet,. Federal Reserve Bank of St. Louis  Sep\e■ber/l9~lac  4eall-«• in fon1p exchange tor  99 accout of the ltablllsaUoa 1ml4.  fte  aire ...  a, wUh Nexlco waa for aa a4•anc•  of $5 aillloa acataat Ille pvcha•• 'IQ- lh• ltablllsa\loa ~ of aaouat of llexlcaa pe1oa which lb• ._co cl• ••nco  acr•e4  equlTaleal  lo repvchaa• oa the  4eaan4 of the UDUe4 Hal•• !reaaU7 al All7 11• at lbe rate al which \he7 ba4  'been acqu1H4.  !be eucuUoa of thh a.17•••••1 • • CMJ"Ulee4  bJ- the 4epoa1 t  on the pan of th• Buco•• llezico of a1lftr oollaleral. Slac•  tu  teraa of 1h11  acr••Ha\  were aloag Uua which aened a• a ■odel  for aubeequat exchaJlr• 1\ablllsa,1oa agreneata which ••re execulecl b7 the ~~  .  Stablllaatloa lmMl. ' • ten of Ihle letter,.la f1lll .... a, followa:  •n. S.creta17 of the freuV7 of tbe uau.a Stat•• ba1, •• a resul, of hl1 recent conTeraa\lona ia Waahia«\lon with th• Secre\&J7 of the llencu !reaeU17, authorised ue. •• ftacal agent of \he Uaited. Stat••• \o en\er 1alo \he followlnc arruce■ent with 7ou.. oa \ebalf of the lepublic of •xtco. for \he purpo•• of auppl7iag ,he bpu\llc of •xleo with 4ollar excha.Jl«e, fro■ 11•• to tlae, •• _,. \e required: 1 ••• , a, fhcal acea, of lh• Ual\e4 .,., •• • "111 PVOU.H fro■ 7ou, fro■ 11• lo Ila• •• nquste4 by 7ou. •xt.can pesoa, the peaoa ao purcha1ed lo 'be creel.lied. lo u fhcal acen\ of the UaUed. Hate,) oa 70v book• la a apecial accoa\ lo N opened la lhe .... of \he •re4eral h1ene lank o f • • Tork aa rtacal ~•• of Ille Ualte4 Ital••·• Ialereel a\ \be rat• of 3~ p e r - • la lo 1>e credl\•4 on auch accoual. Upoa reeelp\ '7 u of ad.Tic• '7' \elegram that thh accowal Ila• \een cre41 lecl wUh a alahd aaoat in Mexican pe101, ve  <••  aball la Iva cn41 t T•u oa ov l>ooka la a apeclal account to be opeu4 1• the .... of •Jaaco 4• Jlex1co •• ~heal Apa\ of the ••public of ■edco• la an aaoual la U.S. 4ollara equal. al th• lhea pr••a111DC ra\e of exchange 1• lev Tork for lelegraphic \ran1f•r• oa llexico, h \he ..,ut in peao1 ~o credited to ua oa 7our booka. 2.  \otal aaoaat of peaoa pvehaee4 1'7 •• froa TOU aA4 alanclln« to our credU on TOV lM>ok• a• atoNea14. ezcl11elTe of lahreat, ahall not at ~ 11•• exceecl la '1:1111 aarecat• th• equlnlent of U. s. $5.000,000, coapu\e4 at th• acl-1 ln.,1ac rat• for 1uch peeoa.  ~  J. You acre•  \hat PT or all peaoa pvchaae4 • u fro■ 7ou, \ogetber · with latereat thereon a• aforeaalcl, aa4 a\u41ac al uq tl■• \o our cre411 on TOV boon aa aforeaa14, ahall 1>e repvdlaucl (la U. I.  4ollara) 'bf  TOU fro■  ua at a,q ll•, aa4 fro■ 11• \o Ila•. upon our  requ1t. at the e&M rat• or rat•• of •~chaJlce at which 1uch peao1 w•r• purchaHd froa 7011 'bT u. Federal Reserve Bank of St. Louis  -vv  i..  ••cvU7 tor tu pertorauc• '1- 7ou ot 7ov acre••nl \o npvcbaa• peaoa •• atoreea14, 7ou aulhorl•• aa4 req11Ael Jecleral haerTe leak of le,.- York an4 l'e4•ral hHne ~ ot laa h-aAchco to••' aa14• fro■ ti■• lo It■• an4 lo pled.p ,o h4eral ••••n• Jank of••• York•• fiacal ac•DI of lh• u.1, .. l\ale1, ao lll1ICh of the a11nr aov held for 701r aceoal u4er ear.ark b7 J-e4eral leHn• ~ ot York u4 lecleral -. ..rn ~ ot lu haactaco (aaoanUq to approxi11atel7 11,000,000 oaaoea) u th• ,ollar equiTalea\ of peaoa purchaae4 u4 \hen at&Jld.lac lo ov oNCllt on 70v \ooka •• afore1ald bear• lo u .•. $5,000,000; ... ln 'h• •T•DI of 70v tallare lo NpurcbaH each peao1 •• urelaa\oTe proTl4ecl, 70u •o fvlh•r authorise u1 •• ple4pe atoreaa14, lo ••11 ao aoh of 111.Ch allTer ao h•l4 UIMler pleclce, at &fl7 11•, al th• ao-oalled ottlclal price for allnr •• then quoted br NeHra. llaAdJ A laraaD. •--York,•• York, u4 h appl7 the proc••4• thenot 1• auch unner, •• ■-1' \e aece11&r7 to 1&Te ua, •• fl1cal a«enl of lhe Uaile4 Stat••• and th• lhl1\e4 Sta\e1, haral••• tro■ &117 1011 b7 reaaon ot a:zq failure to repurcbaae aa14 peao, •• here la proT14ed.; aD4 7ou lo ber•l>T authorise and requat 1ederal ReHrTe Bank of San haaciaco lo lloaor azq reqa.,, aa4• by ua to hold or 4•11••r for oar accout, •• tlacal apa\ of the Um.led State,. and•• pl•d.cee aforesaid, aQ or all of lh• all••r aow hel4 tor 7our accouat under earaark 'b7 aal4 J-ederal •e••n• laak of Ian £a  ••w  hanchco. and a«r•e4 that oar o\llgatlon. •• fl1cal •~en\ of the United Stat••• to purcha1e uq -■out of pe101 purauat here\o ab.all be condltloaal and dependent upon 70v •1atala1ng with ua an4/or the ~ederal leaene leak of San l'raaciaco. u aaomat of 11.l•er auttlcient to 1ecur•. •• hereinaboTe in paracraph 4 pro•14•4. 70v obllga,1on to repurcbaa• 1uch pe101.  5. It 11 und•ra\ood  6. It la under,tood that  7ou will take auch further action•• 11&7 be reaaonabl7 requaated b7 ua to effectaate th• an4 lDten\ of thia arrance•at.  7.  pm-po•••  1h11 arra-ce•n\ ahall continue la effect utll ~ebruaJ"7 l, 1936, aa4 tro■ aoD\h lo aoath lhereatter except tbat we.•• tlacal a«ent of the UllUe4 11\atea, 11a7 oa or 'before \be fifteeDlh 4&7 ot.., ••lh a4•1H 7ou \hat ov otter lo pvcha■ e pe101 a.ader Ihle arran«e■-nt, la 10 tar •• U ha• aot \eea aceepte4, la lo be 41acoaUau4 al the end of that IIOJl\h. 1  !hll a«re...n\ diffeN4 fro• a loaa '7 Ille ~r...VT lo the Juco· •• Na.cloo in •••eral iaponut reepect 1.  .l  lou of a aiallar •cnaa\ woul.4 ••• ,he  effect in aupporUn« the •xtcan peao la the • - ?erk aaral ltGI u4•r Ille Federal Reserve Bank of St. Louis  aa■e  J.UJ.  ten, of ,hta  acr••uD,  lu laaoo ••  ••noo •• a ooaallaa.lac obllp.Uon  to repa:j the d.ollar1 U ba4 reoelTN apoa ,......  I\ laa4 aol oal.7 lo M pre-  pared lo auppl7 clollare al a flu4 •lar1'7 dale 1":il lla4 a\ all U••  aanace  the exchang•• aa lo N  10  lo  la a poalUoa lo •app~v lhe•• 4ollar• uder pe11-  alt7 of lo1lng the 11lnr whlch U ha4 pledpd. •• oollaleral. !he bulk of the $5 llillton cn4U waa a4ftlloed. lo lhe '.lanoo cl• Jlezioo la Jaau&r7 and the pe101 were repurchaH4 a.n4er the lera1 of \he  and Jue 1936.  acJ'H■ en\  111 N.q  Th• follovtnc lable 1hov1 lh• lranaac\lou under \he a«n•••nt: 1  •ew  Purchaaed by the 1ederal •••n• JaDk of Tork•• 711cal Af!a\ ot ,be Ual\ed s,ate1  -Date  llencan  P••••  U.S. Dollar•  Juuary 10, 1936 Janaa17 22. 1936  4,031,000  695,000  total  4,726,000  17,000,000  hpurchaHd b7 the Banco 4• Manco  u.  ••xtcan Pe101  1aF 26, 1936  June 9, 1936 total  9,105,755.lK>  I. Dollar• 2.726,000  7,194,244. 6o  2,000.000  17,000,000.00 fbe oar171nc oa\ of \Illa  acr•••nt  in accordaace wUh it• orlcinal intent  appears to ban been aoaewbal uespec\ecl ill \be !rea1UJ7 Deparbent tor oa  laau&r'T 22 llr. Coolidce in a  ■uoraa4aa  lo Iba horelar7 co... nted on lbe  acr••-  ••nt •• ~ollova: •1 feel that we baTe ■ad• u ao-•-nt and \bat lh• lnn1\■ent la car•tull.7 protec\ecl and \hat we cov.l~_qll afford ,o •197 put uUl ,he •11Ter poliq- ■-eh tls"tlul aeaaUM we pl J~. I aaUcipate ln ,he final wind a:p •• will get the a11Ter ud llenoo w111,,, the 4ollar1. I thlllk azq 4nan4 ln lhe uar f1lture would be reHnted b7 ,he■ and ,hat w haTe ao "Hr'T po4 reaeon tor ohancin« our ■ lDCl1  ..1114:rn •h•  10 IOOD. 1  ,u  fro■ the 1e4eral ReaerTe ~ ot •n York to Secre\a17 of \he !rea1urr in •rranaaciions - Jaring an4 Selllag 7onlp •xch•~ - laaco cl• llexico• file.  1 Letter Federal Reserve Bank of St. Louis  102  fhia aeaoru4a la4lcate• lhal lhe fNa1U7 • • ooa•l4er1ac wu\har \o leraiaa\e the qree•al thorilT after Ha laaap.ralloa. coAcernlnc it arcH,  I. fvtber ,uaUoa  -17, whether lhe h4eral b e e n . . _ of Sew York  the ripl ader Ille agreeMal lo penll lhe aale of U7 ~  11 a4er the  of a 4ef&Qlt  '7  tu  Met  1llnr llall 1-T  !be oplaloa wu hel4 l»y llr. Opper lul la lbe abaeace  Ille laaco 4e llezieo auch u.lH wen aol penlHllale 11114er a  atrlct ooaatncUoa of Iba acre-al.  lhoul.4  tu  luoo  u  llenco &114 th•  !reaaUJ7 acree to 111Ch aale ao lep.1 o'bJectloa1 wolll4 ariH except tbat la that  eTeat the •oual of  tu ..Ta&Ce  aeove4  "7 Ille allnr  woal.4 ban  to be reclgoe4 .  !he pe101 pvchaae4 '7 Ille JlaD4 wen carrle4 oa lie Mluce 1heet •• u /."' ~..(,·-'4-  ...., lnr.t ao oeaMr ealrlea were aet 11P lo abov the 1llnr 1lel4 •• colla\eral . !hla vaa record.eel•• a aotaUoa altachecl lo \he WMkl.7 'balaace ahHt uder the  heecllng •sUTer Collateral Accout•.  Of tile $5,000,000 la 1llnr held 1a thla  accout ou-halt wa1 1n San J'raaclaco u4 \he otur balf 1a the lapae4 la Jue 19)6 aa4 waa r-i,laoe4  arranp•at la C.  laa'Q&r'7  •ew York.  117 a ••ewbal alallar  1931.  fhe llrat Ch1ae1•  .&er-•'.  Oa Jlq 25, 1936 th• SecNl&JT coacl114e4 u acre-at 14eaUcal la all iaportant reapecta •1th the Kencaa acn-Mal for \be pvchaH of Chiu .. 7ll&Jl  again■\ dollar• Hcure4 °tJ7 ail••r collaleral. 1 Ille acreaeat wae coacla4e4 a1 a Nault of coamm1cat1ou an4 con••r•atlou wllh repnaen\al1na of the Sational  <JoyermaeA\ of lh• lepu'bl1c of China.  !he arraa«••I• wb.ioh the S.cre,&17  authorised the Ye4eral •••ene Bank of••• York to aake ¥1\h \!Mt C.atral lank  of Chlaa proT14ecl for the purchaH ot ap lo t20 ■i lllon of Cblu•• ,uan and 1 !he ten of the agre911ea\ an4 \he coTerii.g l•U•r are foua4 ln \he •o.neral Ytacal jgente an4 Depoaltarlea - O.aeral• file. Federal Reserve Bank of St. Louis  103 Ille col~l•ral proT14e4  Ir  \Jae C.a\ral lank waa lo Mar hCh a proponloa lo  50 ailltoa oacea •• lhe aao11al lo $20,000,000.  ~ 4ollar• ue4 la lhe pvcha•• of 711&11 'bore  ~ \era, of Ille firat paracraph ot lh• Jeexlcan acrenenl " "  repeated alaoat nr\atla la lh• lel\er to th• Central leak ot Ch1D& except that lhe 4ollara proT14e4 '7 lhe had  WN  lo N cre4lted. lo the C.11\ral Bank ot  Chiu la a epeclal aocou\ aa4 aol •• thcal ageat, a• ln the Jlexican a.gree1Nnl.  A requir••nt • • a44ed that th• 7U-ll cred.Ue4 lo the 1e4eral leHJ"Te laDk of  In Tort •• thcal aceat aa lalereal alloul.4 be repurchaH4 at the aaae rate ot •xcban«• al which the 7lWl earalac the latere8' ha4 Men bout;ht.  !he dlTer  pleclced •• collateral • • aol to be Mt aald.e •• in the •xlcan a«r••-nt tro■ lil••r alread.7 held under eanaart )7 the 1e4eral hHJ"Te lank of ••• Tork but  va• to M held. 'b7 the C.atral luk of Chiaa la 4epoa1'ar1ea 111 lev Tork or San 1rancilco 4eaignate4  1'7 the  !na1UJ7 for the accouat of the 1•4•ral •••"• Jank  of lew York •• f1 acal a«ent and/or lo be plaoe4 oa board a Uni te4 Stat•• tteaaer la Sbanpa1. couiped. to the lederal •Hen• lank of hw Tork at depodtarl••• \he  the cletaila ot the ahlppiJlC clocuaenta and the la1vuc• were proT14•d in  a«r•••nt. As la the Nexlcan  acr••••nt in the •••nl ot failure oa lh• parl of th•  Cenlral lank of Ch1D& to repurch&H lhe 71laJl 1aclG41a« la\ereal, lhe 1e4eral •• .." • Bank va• \o be aateguard.e4 la \aklac ner \he oolla\eral froa arr lou •• a reaul\ of 1uch failure.  Mexican  a«ree■enta  lfh• oaq 4lttereace N\weea lb• ChiMH aa4  la thh respect•• \ha, lh• C.atral llllak of Chiu ahould  arrange to haTe the collateral couertecl iato a1lnr bar• which wn del1Tet7 in Iew Tork. Federal Reserve Bank of St. Louis  ~  .A purchaH of 71lall •  or  goo4  lbe ~e4•ral leH"9 ~ k of •ev York  ~ •• fiacal apnl wu aubJ•ct ,o,,taltlll.Ma\ )¥ Ila• Oeal?al  »au ot  Cluaa of  1\1 tm4ertakiqa la repr4 lo \he pled.ce of oollaleral. fhh acre•Mn\ ••• \o tenllaat• oa Decea\er 15. 1,36 aa4 if a reuwal  wa•  d- ■ ired  notice ••• requ1re4 to r . .ch lh• re4eral lleHrTe lank of Sew Tork  thir\J cla7• Nfor• \bat date. !hi ■  firat Cblu•• a«re••nt ••• aol acllnlJ aT&11•4 of aa4 lh• olll.7 ea\rl••  connechd with 1t appearlq on th• balaac•  ah••• of \he 1u4 are a  uall Uabl-  ll \J to th• Central Bank of China which appear, flra\ al $131.000 on th• balallce ahNt of .lucuat 3 and which r ...ined. froa hpteaber 11' lo October 19 at •312,000.  D.  !he tight of th• hD4 \o lell lll••r htv.r•• under the Load.on .l«r••••nt.  One other qu•tion concerning allnr aro•• prior to th• fr1pert1t• ~••!hi ■  .. nt.  wa• th• question of whether IUlder the •1l••r acr•••ent of  1933 the United States !reaa1U7  wa1  entitled lo ••11 •ll••r future,.  Oa Jwu 5,  1936 Kr. Oliphant prepared a ••aoranda to th• Secret&r7 la vhlch he ·referred to hla ■e■or&IMlua of llaT  7. 1934  concenln« th• power of the Stabilisation runcl to  4eal 1n 111Ter u4er lecUon 10 of th• Gold •••rn Act. pa11  2  Kr. Oliphant 414 not  oa lh• ,u,llon of wuther the 1\lD4 ooul.4 ••11 apot all••r under th• Load.on  the total of lh• aaoa\ held upoa \he effectl•• 4ah of the the aaout acr••d to be pvchaae4 •. LoD4oa  acree■ent  acr•••at  added. lo  •• 414. h..,.nr. c1 n hh opialoa ,i.t th•  414 not coateaplat• AJ11r reetrletloa apoa the eal• of all••r  contract• for tutu• del1Te17. \aelac hh Tl•  apo~ \he c,-t~"'<. ...  lepl ooacep\ \bat  DO  aale actaal.17 take• place utll \ttla \o \he 9'llptloa eol4 paaaea. A fat~• 1 !hare 1• nothln« in the fil•• \o 11141cete \he ~ n of Ulla aaall llabllit7. 2 he papa -L ~- - :·-· . Federal Reserve Bank of St. Louis  ~r  1  ~v.;  ooalrac\ • • ao, a aal•  Oa •ona'ber 16.  all••r u4er lhe preoe4ule ••kl>llab.•4 '7 \he coarla. 1  et  1936, t2,05(),000 of •llnr aol4 torwar4 appear• oa llae '-luce  ahMI ot ,he ha4.  a.c1aa1ac la JamaarJ \he ha4 \oqb, tonrar4 ailnr aa4 b7  7ebru.J7 I ha4 0011ple\el7 COftrN lllle allorl podlloa whtoh waa OOIIJ)leleq 11,lli-  YI.  Gold u4 llerllac frauaotloaa u4  -t  ~-  Colllli'••I• IOT•\er 19)5 -  1936.  laUVN Ofter lo Pvcba•• Ool4 troa lbe luk of lraaoe: •onaber 1935.  l)Qrlac lh• perio4 froa lul:f to Decea\er  porUac a\erllac lhroQCh  u,  large hol41ac ot allnr,  eol4  8'111 - · prepared to  NUW  11•• •• la lh• liq-Jue Un  lepl•ber  1935 wbea  Ille had waa acU ••~ aup-  ellnr pvchuea la l.oa4on u4 va• aecmmlaUac a 414 aol reappear aaoac  u,  1935  u, auets.  It ••••rtuleu  aaaldaac• lo Ille Jut ot rra.ce along lh• ....  crlela.  la Oclo'ber lh• . .CNlaJ7 aw4 hl• lucu-  Aalidaal, llr. fhoapaon, lo ••114 11lfonaaUoa to Jlr. Locbhea4 of lhe llab111-  ••t1oa ruad.  fro■  Part• coacernia« lhe gold car171a« capac117 of \he l1D11e4 Stal••  Linea la couectlon vt\h a lran1aclloa which the lecre\&17 ••• coateaplatiq al 2  an4 oa •o••ber  \bat U.•  15  \he !rea1UJ7 offered lo purchaa• ap to  t25  ■illlon  troa the lluk of huoe acataat aa equlftleat 4ollar uount of gold lo be ear■arb4  in their ftlllh •ar-,~,,-lt~.-."'-lpe.-.w-i•~•--•Mt•, 111.Ch pl4 \o be paraateecl fr•• for  •sport ancler  ui, clreaa ■ taac••·  !hie offer wa1 reUWM 4&117  • - ti• k  fro■  YU,._. of 117 tu lank ot 1raao• .  •on■'ber 16 to 23J but ••• aot taaa .. ~~  bJ' •ble  At ,he  lnaqurahd a ..,, fon of 1alen-eaUoa 111 •111>port of 1\erllac which  becaa• a Nplar illpor,aa\ fea,v• of lie laler ala\lllaatloa o])eratlou.  lfhl.1 ..aorandua la la •tran1acUon•--1'1Tia« a.114. Sclllag--0.aeral• 21.euer of llr. !hoapaon lo Mr. X.cbhead wr1 U•• tr. \be Betel Um-tee la Parle  On Octol,er 15, 1935. 3•rruaactloaa--lkqiag Sellin« Oold all4 lllnr--0014--laak of lrance• file . Federal Reserve Bank of St. Louis  106  I. - ll&D41ag Otter lo PurclaaH lol4 la l.oad.oa al the Lonua-lew York lhlpplac Parll7. Oil lo·H■ber  19, 1935  the 1e4eral leeene Jiau  ot .._ York wa• laa,rucled.  lo inquire •• flacal apnl for the fna111.J7 •• lo whelher lhe leak of lql&A4 would be willlac lo acl for U la Ille pa.rcha" of ap lo 700,000 flu oace1 of  pl4 ln Lon4oia at aol o••r $34.77 per ouce, azclwllec lwobrap, aad to earaark auch gol4 for the 1e4eral le1ene!ank.  Upoa the CM11PleUoa of 1uch purchaHa  the Sacre\&%7 wul4 lu\nc\ \he hural •••n• Bau of • • York to credit \he .  Bau of bglaD4 la 4ollare.  !be luk of :lqlu4 replS.4 1-7 cable \bat U waa un-  $34.77 ,,..  likel7 Iba\ it coul.4 o'btalll gold., lhh price. for Iha oul\Vll .,  onl.7 effecU•• vhea. •• had. 'been \he ca" la Iha pnce4lac weak. gold vaa ottered. la the Lond.oa aarke\ and ao 'b141 wen !he luk of  parU7.  2-1/24 to  34  -.a«l&D4  ■ad•  for 11 at o••r the law Tork  poiate4 ou\ \bat oa llq 20 the eold.  onr lew York ehlppiac parU7 ••uin.lanl to a price  ■hipping  8pre■ iua•  of  ounce, but 1tate4 Iba\ lt woal.4 be pa4 to act vhaaner \he aarket  •••  $J4.S2 per  ■ade  1\ po1-  e1ble.1 !he !rea•UJ7'• otter lo pvchaH ap to 700,000 ouac•• at exactl7 Iaw Tork shipping parity on LoJl4on2  wa• ao\ wltb4ravn, ho••••r. but waa kept open atea~  uUl Jan11&r7 11, 1936) !hh atan41ac offer to ~ «old  va1  aot a a\ab111•a-  ,1on operation in the ••n•• that l\ brought Iha 111114 lato th• a\erlia« aarkei  at UT particular le•el of the eterl1q-4ollar ezcbaqe ra\e. IIOMDt  \he ahippiag point could be reached  At a,q cl ~•n  b7 a fall ln \ha Loa4oa price ot  gold. aterling-dollar rate reaatniy uachaaJ!d, or 117 a 4ecllu in Iha •'•rling1 "!ranaaction•--~ia.g aD4 SelliDC Gold Sil••r--Gol4--Great hltain--Bank ot Xngland. • ti le 2 Ct note on page I 1D.41caUnc that the prlce ot $34. 77 par ouac• did DOt allow . for in\ereat. Conflra whether this 414 aot aclaall7 uke the 'l'reaaury' • 1tand-r- ~. offer higher than that wblch coa.14 be ofterecl • prl•at• arblttacear•. Cb•ck ' whether there an laplicaUoaa to be 4ravn fro■ ,hh. 3 Cables of lo~••ber 23, 27, JO; Deonber 7.1~. 21, 21, 1935i u4 Juua17 4, 1936 Federal Reserve Bank of St. Louis  b  107  4ollar rate (appreclatloa ot the 4ollar la eterllac) th• Loa4oa prlc• et eol4 NaalD.1~ 1111chan«ed., or  117  aoae ooa'blaaU011 ·or 'h• ho. ( Th• eUJld.tac otter,  how.Yer . prnenled the appearaace al aa:, 1111• ot u 'bUrace protu opporl111l1U•• tor ablpaea, ot &Old.  aau■uall.7  fro■  Loll4oa  large plcl ar-  '° •n Torie]  and 1 \ lheretore coatri butecl lo a IIOJ"e or4erl7 • • - a t ot pl4 to the Uni \eel  Stat•• when ,he ahlppiac poiat was reached.  Ia 1h11 ••AN 11 wu ln haraoa_r  •Uh the TNaaUJ7'• general pollq of illlenening vben the •aoraal• functioning of the exchanc•• ••• for &D7 rea1oa 111pa1Nd. 1 ht 1, va• aot aa operation which would atablli·H \he clollar-a\erllnc ral• becaa.H the London price ot gold. waa tundallental:17 'bated on ,he general aoYeaenl of aterlia« ln  lei'II ■  of all the  gold currenc1•• iacla41nc lh• dollar which va• kept within cold point• in relation lo o\bH• gold 1tandard. curreac1••  adopted ln Janua17 1931.  b7' the operaUon of  the aouta27 17ate111  fhe co-on aoYe..n, of a\erllng ln hrma of the gold  currenci•• •i~ht be ''H'f7 wide vi \bout 'bringing \he hnd into the 1terl1n« u.r-  ut  u.n4er tt, standing offer expreaaed in \en• of a dollar price of gold.  alerl1nc-4ollar rate••  41 ■ \lzict  ---I\  troa \he London-Jew York gol4 ahlpplnc parit7  which a1cht be aa1oc1a\e4 wUh &Jl1" ci••n rate. beoaa• a erUerioa of 1a\enent1oa b7 the h.n4 la th• Loadoa nllio1l auk•\.  •tween •o••\er 27 and  6 'Q',1,du-=e (  Dace■'Mr 6. 1935, 37 .171 ouo•• ot plcl were pvcha1•cl u4er Ihle ataa41ng offer  c;,>,/cif  at a coat of $1.316,000 aJl4 ~la pl4 • • bel4 b7 the hll4 ad.•r -.nark at the  ~-+-4'>'1  knk ~ bglan4 nUl laaaarr  of 14oa 7-l/2d. 3 !'hh See pagea  ~  wa1  Hl4 la LoDloa at \he price  •al• oo1Acl4e4 vUh \m n-ea\17 ot ,be ha4 Urec\lT  into the aterllng aarke\.  l  26. 1936, wbea U  ,.  ..  . ,- -  2 Th••• a\ah■en\a are no\ ba■e4 oa •\•rial in ,he filH bu\ are ud• ill order \o d11\in«Ui1h abarpl7 th• purpo••• of the \ranaac\lon, which were later paa1ed \hroagh \Ile A. and I. accou\1 of the had at lh• llllnk of hclaad.. 3 1 !ra.naactlona - •· luk of bglud - Loa4oa• tll•. there 1a aolh1ng in the file to indicate why thia gold•• 1014 1a Lon4on. Federal Reserve Bank of St. Louis  108  C.  Cna\lon aa4 Lltll14alloa of a lhort 7orvar4 Poallloa la llerllag:  9, 1936 the ha4 -4 elo•ecl  On l&Aa&r7  b&lance of  ~776-1-7.  011,  u.  eaall ••lalaa4lac derllac  It1 alerllac pvchaN1, ef which Ihle • - wa1 \he ~ , .  oarrlecl ou\ in ooanection wilh Iha 1ll••r operalloa1 la  lu  la1\ halt of  1935  ha4 hen -4• at a lnel of about 1'.93 hi b7 lbe ea4 ef Juu.r, lhe rate • •  approachlac $5.000aal th• Stablllaalloa ~ Npll lo ••11 .,.r11-. forward, lhu lead.lac to check lhe appreciation of llerltac. ~  OU  ••lh  Ihle alao put the  la a po1Uloa lo la\en••• later lo 111J)port 1lerllac withoal \akiq a loag  poeiUoa •• U ba4 had to 4o 4v1ac th• tint pl4 acare. 1 lelw•• Jaaaa17 24 u4 1ebRAJ7 27 11 ha4 forward, all 'but  1014  aoo,ooo  lD lev Tork the derllag •tv.1Taleat ef $1~.~3,000  ot which • • fer •114 of  \llllc ot 1h11 a\erliq vae 1014 at  Jul oTer  1•bnar7 4elln17. !he  $5.oo. 2  leclulac oa  hbnar7 14  the had bepa \o pvcha.. epol aa4 •114 of lhe aoath aterlla« both ln Sew York and Lon4.on at froa  ~-97-3/~  lo  the end of the aoalh aold a fvlber  ---------------  ~-99-3/~  lo conr \hie po1ition &ad at  a,~30,000 torwari for \he •a4 of March,  leaTla« Ua ut ahon torwar4 po1Ulon on Karch 2 at tl,157 .ooo.3 Uoa va1 taua at allp\17 lower ratee,  a..91-21/32  lo  ~-99, u4  the  !hh poei-  hD4  'bepn to conr la aaall lo\a for the•• of \ha aoa\h 4el1T•J7 &Ad. 1n epot  on Jlarch fro■  7. It  4.91-1/2  lo  oloeed. lh• Karch poal \ion al ral•• vlllch crachaall.7 4ecl1Mcl  4.95-3/4.  Thia operaUoa waa repeale4 a\ \he•• of A.prll  aA4 a a\111 eaaller forvari poaUion wae carried. forward io tla• •ad. of  ($1,305,000)  a\  4.93-1/2.  •\ween lla7  5 aa4 7  JlaT  \he whole et \he lla1' po1itloa  waa clo••4 o1ll bJ' lh• purchaa• of 9'erliag tor 4el1n17 liq 29 al eoM-  er ra\••• 4. -11 16 \o ~- 7-1 16, bu\ Ille whole erallon vaa !here 1a aothlDC in \he tll•• to illdicat• \he reaaoa vb7 th• 1u.n4 went abort of a\erlia« at thi• 11•. 2 lpeclflc ~\borlsa\ion1 -« aD4 SelllDC l\erlla«.  vhat hi  3 lbl4. Federal Reserve Bank of St. Louis  ~  31o  1  109 !ta. anrap ral• realised. tor ih tol"llaN ehrllac  Iha :Jud.  ao14 ro•• fro■ 5.000I for the ~•\ru.aJ7 po1ltlon to 5.227 for lh• x.,, poelltoa. 1 !he ae\ effect of theH operaUone waa lo check Uw r1•• la 1lerl1Dc vhea U reached the high polat ot o••r $5.00 u4 \hen lo accbHqantq 4eellM4.  U 1appori u  \he rate  ID l~h reapaet llii operaUon reH■bled. \he flrat 4eal-  lDp of the ~ in heach fraac•  2  1-1 1-oaue ef  bl.7 not a aa,Jor factor in the •rat. On Mq g th•  briac  u,  II04eral•  et••  U ••• proba-  3  hn4 retired coaplel•l.7 froa the aterllnc  ■arlcet  u\11  Septe■ber 26, the~ followinc the announceaent of lh• frlpartit• Acre••at 4 but eou gold tranaadion, conUnued. to be carried. out and preparaUon1 were  aade tor a aaJor ahlf\ 111 the center of Iha 7un4' • 1nlen8' froa Parla to I.on4on.  Gold !ra.nsacUona froa the 1rench SlecUon1 of .iprll-Mq 1936 lo lhe  l>.  !r1part11• Acr••Hnt. The J'rench elec\10111 of April 26 lo  May  J, 1936  were won  hoal parU••. and the new go•eruent of Leon Ila took power  b7 the Oil  Popular  Juae 2.  At  the 11■• of lh• elecUona forward fr&Jlca (check 4ate) fell to a 41acouat of 2~ an4 a uw  per1o4 of lnlena• uxiet7 concernii.« th• future of th• true becan. 1.  Purcha••· of Qol4 ln l.on4on ., lh• • .,, Tork 8h1pplnc Pari \7.  On Karch  30 Ill•  fr•••VJ' bad reuved. lta otter to  bu;, up to 700,000  oUDC•• of gold ill LoD4oa at $34.77 per o ~ &114 ,h1a vae replarl.7 kep, open aUl ~ 16 when the aaoat wa• re4ace4 ,o 500,000 oaac••·  open u\11  Augu\  otter••• kept  S when ,he aaoat • • acata rectucecl \o 350,000 omuM1 an4 waa  1 Weekl.7 balance 1heeta.  2 s.. ,.. ,. . -,, '--f ( <;-c_. ) !hh ii laterrec but ha1 aot ltHn loob4 1a,o  4 •~iD« aDd. Selliag Sterllq--Speclflc .lll\hor1sa\1oa,•. fh• weekq balance aheeta tor thie per1o4 1how oaq aoral 1\erll~ balance,. Federal Reserve Bank of St. Louis  •1n\alu4 al lbat flpre uUl lepl••r  26. 1  Danae lb.• perlo4 of tbe ~•ell elecllou otter 1-oaae effecUn for th• flral  '1••  Dece■\er  elac•  19, 1,35, wt th Ill• elerllq-4ollar rat• at about  C::S-- \he had 1-caM a«al• a ~ r of pl4 la Loa4oa. I  !able  I- eubatullal  lMI.I laterallleal  Aa la41cate4  '7  parcha••• of pl4 ftre -4• 11114•r th1•  414 aol eupplaat lhia aspect of \he llablllsalloa  laad'•  operatloaa la London.  ,.,1. 6 Ool4 loucb\ '7 lu lub1111aUoa ha4 la LoD4on $Jil. 77 per ouce fro■ 911.1 21 to Oeto\er 22, 193' 2  Oucea  !!!! April 28-Jlq 1  $1.~67,000 Jt/, 7 !100.000 3 i . .,_r 6,669,000 3 4 . .,.., 3 , 914,000 > 'I · -, '--  112,221 20.1~  -., 25  Jue 19 .lapst 4 October 2  Dollar•  191.127  112.613  6  !he pl4 thu 'boapl  21,992  1 •008. 000 } I./ . 7  7  uowallnc lo $13,751,000 wu aol lllpor\e4 but waa held  uder ear11ark al Ille Jule of Kaclan4. 3  IalUaU••· Aa  WN  a coaaeqaeace of lb• ~ach •l•cllou 'both ~14era and Svie• franc•  ••1'7 ·••7 earl.7 la.., 193,.  Jh&loh fu41 Mpa ,o - · · lo Load.oil u4 ••,, . .  ,. r < \ ~-r ·- • (. ,  t ork an4 gol4 to 'be thlpped  fro■  1\.1 •  .  """ \  ••., TePlr lo •11.aill.  0a \hi 1 •cca•loll th•  treasury 414 aot wail for Dlllch lnllia\ln la uklq arra.aceua11 for aa:pport-  tac  \he gu114er in l'ew Tork bu\ oa liq  26 laalnole4 Ille h4•ral ...." •  Bank  of Iew Tork lo cable to the ••therlaa4a laak llaal, vUh \he Tin lo aiding 1D 1 !he aucc••al•• cable• pYiJIC lhaN aulhorlsaUoaa are la •TranaacUon■--Blv'i~ an4 Selling 9ol4 aa4 lll~•r--Ool4--0real Brltala--laak of ~1.an4• file .  •!raaeacUou--Go14--B. luk of Jaclu4 - Loatoa• tile. 3 Veekq baluc• •h"' •. ~ Co••rclal and 11Dallc1al Chroaicl•. 2 Federal Reserve Bank of St. Louis  111  Ill• PN'!8Allon of erra\lo eZCMnc-t fl•olullo••·  lu leon\aJ7  •f Ille hea•VT  waa wllUac lo arraace for Ille ••therlau.1 leak to 4raw •• tu ~ehral •••n•  In Tork•• flacal ~•'••or hfor• , _ 211p lo •10,000.000 a,ralaat  lamc of  aa •ctul•al•n, •out of eol4 earaarat la Aa1ler._ a\  $3"-77  per ouoe, each  pl.4 to 'be paran\ee4 tree for ezpor\ 11114er uq olrc11Hlaaoe1.  laak  Wal  aake4 lo e1p1f7 1,.  acr••-·' lW •bl• o• noelpl  would. aake Ill• 4ollar1 1-41al•lT &TaUable.  Iha Selherlu4•  of whleh lb  !na1vy  !Ile fna1V7 a4Ylled lb• 1e4eral  leHne Jank ot lew Torie \bat 1h11 lranaaaUon woul.4 N earrled  011\  for \he  Slabill1ation J-and. ~  liq 28 \he guilder dropped 1l1pU.7 below lheoreUcal gol4 export point  fro• Allaterdall to••• Tork bul \he le\berlaJl4• . _ , \hoggh U accep\ed lh• leniae of \he•l&JT' • otter, cable4 \hat U would ao\ need th• tacilUh• 1n lh• uz\ few 4q1 aJad au:ed tor an uteDtioa "70114 .Jau 2.  An ezten1ton  va1 grante4, 'bu\ oRl.7 lo Jane 6 and thll • • follond 'b7 •••kl.7 reDewal1 of the !'rea1UJ7'1 otter uUl Jul.7 11, 193€.  ~, thll 11• ,he •tnerlud1 Bu.k \h&Aked  the lederal l•••rn Jank tor•~••• renftal• 'IMlt a\a\ed \hal lf 11  wa• l11po111ble  to renew lhelr acre...1a\ tor leacer periou lu7 woal4 drop \he ar~•••n\ Yith the 1lllder1ua41nc \hat \beJ' •l~t a1k for a reawal  'r cable at  ~  ,1...  !o  thia the !rea•VT a«re•i u4 ·,h• arn.a«aenl 1apae4 u\U Saturda7, Septnber 26,  19)6, the 48T Bolland abu4ou4 the eol4 11uclar4 la oonHqaeaoe ot ,he lrenoh detlaUoa.  A n••wal wa1 then arranged fro• hp\•ber 2! to October 3 and two  tv\her ve•kl.7 r•••val• followe4.  0a •••\er 24 lhe whole arr~..•t ••• •11:p•r-  aed.ecl 'b7 new unier1tandiap iacldent lo the Dv.\cll adhereace to \he !ripartlt• A.gree. .al. Federal Reserve Bank of St. Louis  Wo ue  wa•  aclaal.17 ude of \he taclU Ue1 b7 lhe •etherlands Bank .  ).  PnparaUoaa fer lhe lale d lol4 lo hc]aac1~  l w 19)6.  1  Va4er lh• IIOM\&17 pol1q la effeo, •laee Jaaaarr 193~ Ille U.1\e4 l\at H  hea11117 bad aloo4 naq ,o Hll pl4 al $35 plu 1/-.,, lo \he oealral \au:• of coutrlea oa \he pl4 atamar4. hoal parU•• in hue• la Jue the adhereac• of  Vpoa Ille u11111p\loa of power 1w lh• Pepalar of the ~~•clpa]. fouda\iona of \1111 poli cy,  OM  ha.ace ·, o a flD4 pla elaa4ar4 at a lollar-fraae nl• aa\la-  tacto17 lo the U.l ted. Stal•• appeaN4 lo be llarealeu4.  0a Jae I  tu  Secretary  aand and obta1ae4 froa the Pre114ent adhorl\7 lo ••11 gol4 through lh• ltabillsaUoll land to all or aa;r torelp pYeraent1 or c•atial 'baab 1a •llCh qoa•U tl•• • a\ each 11•• and wi\h reapecl lo 1uch goYermen\1 a• he  ■ipl  4en  ■011  2  a4Yantyeoua to \he public _i_a_t_er_•-•-'-·------------------1 !he etat ... n\ ,hat th• chup1 in W. ■ou\ar7 pol1CJ' la41cate4 in thh NcUon hre ■&4• ln preparation tor of gol4 lo lnclaa4 wa• baaed oa 1\ate■en\1 -4• 1'7 Nr. Dietrich orall.7 in NAT 1~ u4 JIOt on uy written ert4ence in t he ac\11&1 record. !he aew authorU7 oltlalu4 'b7 Iba•laJ7 fro■ the freaiclent waa lo Hll gold to all central lauka aa4 eot to the Juk ot bgl&Dd in parUcv.lar. 2 Cop1•• of \he letter la which \he Prea14eat approYe4 th• sale of gold to all or arr toreip goTeruenta or cen,ral bank• &l)J)earlnc la lh• fll•• all are d.ate4 Sep\nber 27, 1936, aJl4 \ear \he aotatloa •jpproTed., 1ranklln D. looHTelt, 1ep1..1-er 27, 19361 , 7el \hi1 lelter la clearl7 referred \o bf \he Secre\&r7 •• haYiDC been approYe4 on Jae S. !hi1 it apparea\ fro■ \he wordi~ of the flral parqraph ot ,he lecret&r7'1 letter lo \he ,r.,14eat of lept ..ber 27 r•q_aetUJIC aalhor1 \7 \o lhe S\abllbaUoa ha4 for \he pvchaae of gol4 fro■ all torelp pY•r-ah or ceatral Mllk1. ,he \en of which la giYen 'below , p . \ 2.. \ I Jlaye ao\ \eea able \o n1oln \h11 confllc\ et 4a\••• aa4 therefor• qu.ote the lel\er apprond 11T lh• PNa14eal coaceralac the •le of pl4 a• U appear, in  •al••  a.a•  ,u  tllea:  •1ep1n\er 27, 1936 ., 4ear llr. Preei4eal: 0a 1 . .oa:rr )1, 1934, wi\h 70v approYal, I h1ucl alat ...ata auouciac· lhal I would, u\11 fvlher aoUce, ~ laporled pl4 al t35 .. Ollllce (leH ou-quarhr of ou percent) aa4 aell gold for uport lo fore1p eeatral 1-anka ud•r certain clre1211daace1 al $35 aa oac• (plu ou-,aarhr of oM ,,er eeat ). Section lO(a) of \he Gol4 le1ene Ac\ of 1934 proT14••• in effect. that I MT , with 7our approYal, 41rectl.7 or through •~ch ageacle• •• I U-7 4••1gute, ·4eal in gold and for•i~ exchan«e bJ lhe ue et lh• llabillsa\lon had eatabl1ahed by that nctioa . I t 1• p0111ble that \her•~ N 411lvba1u,e1 ta the foreign exeban«e ll8 rket a 1uch t b.8. t \he public 1a,en1t will require \he 1ale of ,old throu«ti t he Stabilisat ion J'uD4 lo all or aa, foreip ~ r...n\1, fore1p central bank• Federal Reserve Bank of St. Louis  113 0a Jue  S \he lecrela17 alto wrote lo llrie 1e4eral l&ak et In York  authorisinc U to acquire  11p  to t,1,000,000 of p14 fNII pl4 to \e r•c•l••4  froa the •ev York .uaq Otflce troa altroa4 1-lveea Jue I aa4 Jue 16.  file  •••c1fic ahipaenta lo be acquired. la ,h11 wq woul.4 lte lll41ca\ecl lb.roach th• 1ecleral h••n• Buk 117 lelephoDe bf llr. I.ocbhea4 ef llae fta'blllsalloa ha4 otflc• and pqaen\ vaa to be •4• at the uaal prloe of $35 per oace leH 1/4 1•11 aint cbarp1, the 1ederal haen• lo pq to Iba coa■ ipor  t,1'. 9125 per  ounce and lo the Aaaq Office to be credited aa a alacellaaeou receipt of the !r••V7  .0875  per omace.  !he A1aq Office wa1 lallncte4 lo aak• aTallable to  the 1e4eral ll•••n• llank, .baq Ottlce 'bare of •• uarl.7 aa pouible equ1Talent  aaoaat of pl4 111porhd aa4 ••• to hold 11l1• eol4 la a special accout 1ubJect lo lh• orcler of the hcleral lleH"• Jan]c lpecial Accowat).  of••• Tork aa tlacal apnt  (Secret&r7'•  In order to facilitate thl1 lruaactlon the AaUT office va1  lutracted lo val•• 1ta bar charge a, the aiDt cbarpa therefor• conriac 01117  ••ltiag  au  fbeae  retllllq 001,1. 1  arruc••••'• ••re ■-4•  la coataplaUon of a ••l• of gold to lhe laak  et ~lan4 which bad ••n accUIIU.&Uac llsallon 1WMl tu• gold COll1JlC iD troa a\roed.  la hv  llJ)OJl  York.  .,_ hartq the Stabi-  arrlTal, thia gol4 ... pre-  nnte4 troa appearly uoy lbe auet, of th• !reanrz a, aa a441'toa lo \he or the leak tor Ialeraalional S.l\l••n\1 al lbe price et $35 per fl•• \ro7 oaace (plu one-qQ&J"ter of ou per ceat). It 70a appron, u\11 farther aoUee fro■ 7ou, ot auch aal•• at euch \lMe an4 la tll&Jl\ltl•• aa4 wi\h reei,ect aaoh goTerueDh or bank• aa ,he S.cre\a17 of tbe frea•11J'7 aoal a4Tantaceou lo lh• public iatereat, I ahall appreciate lt it 70• Ylll 1ipif7 •uch appronl bJ aigutve ot lhe ao,ation al the toot of 1h11 letter. Jaithfal.17 70va, /a/ le1U7 Jlorpalha•. Jr., .ApproTe4: hoNlaJ7. Pranklla D. loo••••lt !he Vhlle Boue  h  4••••  Septn1-r 27, 1936. 1 !here 11 ao le\\er of Jue s. 1936 la the fll• 4ea11q wl\h torelp aealral 1-aka. 1 The le\tera lo the ~•4eral laak u4 lo lh• MNT Office lnatr\1C\iona are la Ir. Dielrlch'• •Qol4 1 file. Federal Reserve Bank of St. Louis  •••n•  •al•• of gold to «innc th••• Federal Reserve Bank of St. Louis  CEA.RT III  ■oula17  pld •tock.  the Jank of ~ - c l  Oouequntl.7, ehoul4 1' aub1eqaenll.7 lte 411poee4 ot to  bJ'  the StabllisaUoD hn4 \he ,ruaacUOll would not be  N-  flectecl in a reducUon in lhe gold. a\oolc and ,he operaHon• of lhe Pu.DI! would. be •creened  tro■ ,he publle. 1  Under \hla  $48,604,000  arrance■ent  \he Slablllsalion 1'11114 acquired. b7 June 22  ln gold az:id thh ••• 1ncreaee4 lo  $50,299,000 b7 Jol.7 lJ. 2  !oge\ber  vUh ,he gold acquired in \be London aarket al $Ji.. 77 1h11 brou,ht the total go ld held b7 th• 1und \o $59,138,000 on Jul.7 13)  Oil Sepl•ber  lo thoae ot June S were aent \o \he 7e4eral ReaerTe lank ot Aaaq Office a~horising \he acq•lalUon  15 leUera aimilar  •ew Tork and  to \ he  b7 ,1ie ha4 of a tur\her $51,000,000  ln gold from gold to be receiTed froa abroad at the .U-.J Otf1 ce between Septem\er 15 and October  Jl. 4  When Iha hlpertil• ~e ...n\ went ln\o effect on  Oc\ober 12. 1936, $29,619,000 had 'been acquired wader lhh authorisation.  Thia.  together wl lb tur\her purahaH1 in the London aarket at $34. 77 (!able /, ) , ,otal 5 lmupl lhe/gol4 llel4 'bJ' Iha 1un4 \o $93,681,000 on that clq. (Chart III).  !be opera,1Dc Noorda of th•  ~  4o Ao\ la41cate the aoarce of the gold  aoqllired troa ~e , ~ v e r al 1h11 tlN but bolh lhe Juna and Septeaber arrang6. .nh vere ude at a  IIOIMDt  when a b.eav 4ra1n of gold  fro■  rrance to the United  Stat•••• in progreaa aa iadica\ecl b7 \he follovinc \able:  l  !he a\atemenh in thh paracraph are aot baHcl apon aa,er1al in the files but upon intor•Uon g1'Nn oralq 'b7 Mr. Die\rich ln ~ 1~2. 2 fheH are the aounta held tor \he rund b7 thl .UaQ' Office ahovn in the veelcl7 balance aheeh of tile aboTe dalea. !he PUDd held ao .»14 June I. !he buance wet of Jul.7 6 ia aot in \he til••· 3 Weekl.7 balance eheet.  4 Kr. Dletrt~•• •0o14• tile. 5 Weekly balance ahee\a. Federal Reserve Bank of St. Louis  116 ~able  lo14 l11J>Or\a la\o Ille V.I.: !frll-lep\ .1936 (fooo •UW)  total Iapor,a la\o ~ril llq  Iapol'\1  rr..oe  21,055 169,152  1,514 1:,:,.157  15,)79 67,\93  17,ISO  277,775  Jue  Jlll7 .bpi\  202,91)  27  171,121'  Sep\•Nr  fro■  lbe Uaite4 l\alea  file ooalupla\e4 lranater of a av.h\aatlal  136,671  pan td Ihle  pl4 ,o  ••• aol carried out, bat \be \reach la lh• ericlaal pollq of  area,  19.34  lrllaln  uder which  the Jank of bglaD4 waa exc1114e4 fr• lhe pvcllaa• ef pl4 la Iba Unile4 Stat•• becaue• hglu4  wa1  not on the pl4 e\aa4ar4 waa raUfle4  arrange••h ugoUa\e4 uder \he 'lrt.parU\•  Acr--'·  '7 th• -  praeUeal  [ .-roa October 13 oavard•  th• lrltiah aD4 American Slab1111a\loD hal1 were ao loapr obliged lo exert \heir lllfl•ac• oa the •hrllnc-4ollar rah largel7 Federal Reserve Bank of St. Louis  '7 wq of Parle.  3  Pa.'f IT  the a,abllisation 1'a4 V11h1a ,he haaevork ot  ,u  Aaerlcan  Jloaeta17 17•'• •• llodified li, the !ripartlt• AcNeaeat• of 1936 I.  ~  .UtenaUn• Predated to Great lrUain and \he UaUe4 hah• 'b7 ,he  CulaiAaUon ot the Chronic 1rach 1iaaaclal Cr1111: II. I II .  IT.  !he leadJutHnt ot the Gold lloc CuTeaolea:  a t - 1936.  lept•\er 1936  !be fr1parU le .tcreeaent - DeclaraUone ot Priaolpl• u4 Intent. fh• frtparU\e ~ - - , - Coll41Uo•• for Par'1c1pa\1o• u4 lork1DC  .Acr•••nt,. A.  Jor111UaUon ot \he Principle ot laolproclt7 la lol4 Deallap,  I.  Hepa fa.ken to Kab lhh Prlaclple KtteoUTe on the aerican Side. 1.  ApproTal 'bJ' the PN1ldant of \he Uae of the Stabil1•at1on Pad  to the •ev Acr•e•nh. 2.  Grant of a\herlt7 to the 1ed.eral leHn• lank ot •ew York to Deal ln Gol4 ln Kucutlon ot lh• •ev .lgreaent1.  C.  Coapl1aaee v1'b the Con41Uoa, tor Parllclpation by Great Britain and lruce.  D.  Compliance vlth the Condition, tor Partlclpatlon bJ' Belgiam, Switser-  land and Bolland. i.  T. to Incllld.• Sweden Aaoq Iha ParUclpatin« Countrl••·  The Probl• of Becipl"Oci\7 ot Gold De-aliap the !rlperlite .&«r••••nt. A. Federal Reserve Bank of St. Louis  ~•tiona Baiaed b7 \ha 7ederal C.tral Ba.aka CoAcenin«  parU\e .lcr....nt.  ••••n• lank of Wew Tork aAd. 'bT ~orelgn  !r•••UJ7'• lol4  ~ \ l o n e Jefore the !ri-  - 2 -  I.  llo41t1caUou la the l7at•• ot Ool4 hplat loll llllro4ace4 'b7 \he  - !ripartll• Acre_n,. C.  QM9'1o•• Ooacerniq -.r.arad Gol4 lallecl 'b7 1onlp 0.alral Janka After Iha !ripartlle Acre•-1.  J>.  Acre...n, "7 \be hea•U7 le the hM fruafer ef lanaracl Qol4 \elveen MellNra ef the !rlp&HU• 'crfflleal u4 laTieloa of Ltou••  ff-lS-1. ••  hrlher QuaUou lahe4  '7 lbe 1e,urlu41 Jule  hlaU.q lo lhe  Operation of \he frlpartll• Acre ....,. 1.  Proposal lo IDClllde Dollar £8 . . h . .14 tor l\a\lll1a'1oa Pa.rpoae1 ill th• Scope of th• friparU , • .tcr-a,.  2.  !he Per1o4 tor Which Gol4 hl4 uder  -.nan  wo11.14 haain 1N•  for ~xporl. ). Federal Reserve Bank of St. Louis  Coneraion of Ool4 leld. uder kraark '7 7ore1p S\abilisaUon '1m4• ln the hut of BeTocaUon of the frlpartlt• Agree•nt.  117  I.  !ha-AllanaU••• Preaat.4 to Great hUain aJld. the V.Ue4 lla\aa "'7 Ille CalalaaUoa ot lhe Cbroaic heach ftaaaclal Crtala:  • ' - 1936.  !be ealir• 1-111 •• which \he •zcbenl'I 1la)ill1alioa opera\lou of Orea\ lr1'a1Jl a114 lh• VaUe4 "•'-• ha4  )ND  ooa4ute4 •lac• , . ~  193~ ... \hNat-  aae4 bT Iha reuwal ot lhe l'raach tlaaJac1al ortah la Jue 19)6.  lhoal.4 lh•  uv lnach eo••rmaent 4ec14e \bal 11 eoal.4 ao loqer 1 4efeu. the traao• al \he old gold Yalu, or concla4e  ,u, 11 • • ul la \ha lalerelta of lraace lo oon-  linu \o clo ao, U alght chooH ou ot 1DT01Y1DC  Nflnl  allena\ln pollol••• allot lhea  aerlou probl•• for Orea\ lrUala u4 IIM 111lUe4 ..., ••. . 1, alp\  a4opl a ncl• of excbaap ooa\rol: U lllpl alllpq allow \he  or caJT7 ou\ a cleYalaaUon •  true lo 4epnc1a\a  alla\eral aolloa u4 na the rtat of nlalla\017  acUoa llir IDcland u4 .-.rtoa &D4 olher ooalrte1: or 11 atghl reach aa ao-e••zil  with lngland aJM1 ~rloa IIDder whloh lb.e trw coal4 be a\abll1••4 at a new le••l "1\h lhelr ooa..a\ u4 oooperalloa.  chan«e coatrol or alapl.7 would  oea1ecl  a.  hue• puHcl n•r lo a nclH of e:z-  lo letem lh• franc. \he lrltl1h authori\laa  ha•• been faced wUh fov alhrnaU•••= 1.  to a4h•r• to their pol107 ot aol purchaaiac U7 ournnolea Iha\ could  not fre•l.7 be coDYer\ad iato pl4 - lhua lranatarrlac lhalr alabllisation opara\1ona wholl7 lo  ,u, ,ha Oo.114er aD4 Iha  lw1•• franc .  fhia course waa tor MDT reaaou lapraoUca\l•.  2.  ,o  ct•• up conUauou  3. to accept  iataneallon in tile ezchenp aara\a.  \he riaka laTolYed ln  tra41ac la o,ur ovnacl••• clollar•  ln parUcular. wilhov.\ the ri&bl lo o•anrt \he" elh•r cvreac1••  la\o gol4. Federal Reserve Bank of St. Louis  4.  lo arrl•• a\ aa  acr•  vUh ,be tJaUe4 Hat•• fNa11117 vh•r•bJ  - th• lrUlah aa.thoriU•• ooQl.4 eoanrt , aoqlllr•• la Iha  COUl°H  or 1tab1111atlon operatloae lalo pl4. 'l'he UnUe4 Ital•• va, likwl•• ooatroale4 wUh a ••rl•• et allenaU•••· It alght adapt U• pollq lo a aabalaaUal enualoa of Ille nct.M of excbenge 1 co11.trol abroa4 , or  ,o a NCiM of  ooapelUlw excbeqe 4epreolalloa; 2 i i llicht  alteapt to coatl•• 1,, ezehance a1a,1ll1alloa operalloaa lo lb• alMr pld ovrenclH, bu\ \hh vaa iv• lo N lutteoll•• ... hprac\loable;3 U a1g11, accept \he riak1 of atabllila\1011. operaUou lD. ovnacl•• aol oonen_lbl• 1.Jlto eol4  at all, or conerilble. •• la \he oaM et aterllq, blo golcl at price• \hat vould Mrel7 reflect fla.ctaalloaa la the 4ollar •xchuce vhlch lb• AMrlcan author! Ue1  ■ 1ght  not be able lo coalrol: or U alp\ reach Nae acreeaent vUh  Great !ri,ain which vou.14  c1••  \he t1a11e4 Ital•• a real participation in oon-  \rolling not onl7 the rela\lon, \e\waea \be Load.on price of 1014 and \ha a\erlingdollar rate, but aor• fundaMn\all7 \ha alerllac-4ollar ra\e ltaalf. • lranch 4eYaluallon wllh \he co••••I &D4 oooperalloa of &Del Great !ritaln va• from the Aaarlcan point of  new  tu  Uallecl Slat••  clearl.T preferable lo the  o\her poaaible cour••• of action open to hance, ba.t l\ becaae ••14eni ln th• eum:mer or 1936 that 1ome aort of aclo-Allerlcan aterl1ng rate waa a prerequial\e to Ihle.  acre••nt  Aa aJMl  concenlng lhe 4ollar-  ef araa l•ac\h 4eal1nc \e\weu  ,ha,  1 !he 11p1f1canc• of \hia 1e •au•-'-' b7 Ille tacl hr■alll' i• not ••c• referred to in all the opera\in« ncor41 of \he ltab111sa\1oa hn.4. 2 Once depr1Te4 of \he fv.lcna of effecU•• flze4 eol4 j>rlcea la the o,14 bloc COUJ1triea the Ualtecl S\a\ea .... •1sae,u,al"17 111-eqllipped lo lake parl lD each a coapeti tion. 3 Stabilisation of aaJor curreacl•• \hroap alaor aara\a 4o•• aot ooa• v1,h1n the ran«9 of logical or effec\1Ye aou\&17 pollc,. Federal Reserve Bank of St. Louis  fact tha\ the ealral exch&Bce 11a~111sa,1oa probl• - ,._, ot lb• elerllac-  4ollar rate - eheal.4 N aUaoad Uncll7 ra\her l!laa la41redq throuch Parle , vae olearq la41oale4. !he aoC11111llaUoa ef p14  117 Iha llablllaalloa  • • urrte4 ••I la oouectioa wl\h plaaa Hr\ of Aaclo-M1ar1oaa 1:11Mler1,&1M1lac.  1  ha4 \eciuillC ill 1...  1936  alrea47 11114•r ooaal4eral1oa ter ._.  the•• were •'11N4 tviac Ille arduu  aeptlatloaa of lept•ber. a\ the ooaeluloa of llhlch haan rkelft4 that a lnaoh 4eftluaUoa woul4 not N • ' by nlallal•J7 ac\loa u  a1111r&Rce  lbe pan of  Greal lribla u4 lhe Oaited. Stal••• aa4 Iba\ ~Nach eftona lo npport the franc  a\ a  MW  leTel ln a tree exchaJlce aarket wow.14 ..., with ooopera\loa la LoD4on  and •ev Tork.  II.  2  !he ha4Jul. .at ef Qol4 lloc o.rreaolea, hpl•1-r  1936.  WUh 1h11 aa,vance lbe hench Oownaeal oa lep\aber 2>,, 1936 (check) 4eclare4  u,  la\eaUoa of 4eTalunc lh• fraao, u4 •  tl-4 lh• llalh of Ull• 4nalaa11oa .,  N\WNll  lh• Lav of October 1,  25.19 u4 34.35~  1936  of th• old eol4  par117 aa4 a11thortse4 Ilse orealloa et• h e ~ ltablllsatloa 1llnd lo coatrol the exchange "laUoaa ot Ul• true \o olber carreacl•• vUhin th•H 11.&1 ta.  It  alM authorised lh• Beak of hance \o NTalu Ua gol4 alock at th• gpper et theH llllUa, ~ ■1ll1craa• of pl4 per franc.  B7 a coanntlon. between the !au  of JTuce and. lhe N1aht17 of rillallce '11• hchanp hnd n..-1tablhhed and 10 ailllarcb ot th• uarq 17 ■illlard1 of 4ff&laaUoa protl\ ••• tranaternd 1 At a conference a\ \he Tr•••1ll7 tA Deoabar 1936 \he Secre\&r7 e\a\ed \ha\ th•  ••'h•  !'ripart1,e .tgreunt waa uader cone14eratloa for before it wa1 conawn•ted. 1 Inac\1Te Oold 1 tile. 2 aecc,UaUo•• are ao\ reterrecl lo la lhe operatlac tll••, &114 4o aot ooa• vi\hla \he 1cope of a taclaal accna\ ot lbl hm'• operalloaa. ftl• preced1a« paracraph• an aol oa h ... V7 reoorcl ■, lnll haTe ••• 1a••rle4 to a alnilla ot llecqrGu4 tor \Ile f•claal accout. !he7 aho1lld be contlraed. correc,ed or perhap1 oa1\\e4.  fh••• Federal Reserve Bank of St. Louis  ••ed.  120  to it.  The Fund was owned by the Governoent and manP-~ed for it by the Bank of  F:-a.nce .-  At the sa~e ti~e the Swiss franc was also devalued.  The limits within  which t;1e go ~d value of t~e should be confined were fixed b~r law at from 26 to 34-1/4~ of t~e former ~old vel~e, ar~roxim~tely the limits set for the F:-e:1ch franc, ruid t}~e gcvernment instructed the Swiss National :B&nk tn hold t:-1e frl:lnc for the tbe beinr At about  ~0%  of the former gold va.lue.  On s~rte~ber 2E (chec~) the Net~erlands Ban~ was relieved of the duty of rtdee :-:: ir.p it~ notes in ~old, enc the guilder was allowed to derreciate eb :: nt  2C;{ in d~llAr:3.  It wp,s not devalued, but ~erely maint~ined ~-t t!li~ ner. l~vel.  .An .::x,.,har.:-:e Stat:li1ati ·:>n Fund wa.s established which  '11::!3  entrJ~t:C. ,vith the "i!a j •:, r  resr-onsit:.lity of executir:'! the foreie.-n e7.:chan.~e rolky of t:ie ~overnqent an d  /  III.  The Trir~rtite A~~ee~ent - Dec1~r~tion of Fri~cirle ~ne I~tent.  more so1id foundetinr.~ fnr t!1e stability of i:"ltE:~n~tion:3.l ec:-n':l:1~,:- re~!:;ticns" &::: sti:,tir.F.' th~t the tr.ree ~overni'1 ent$ intended ••to cont1"1'JP. tou;e e.T'rronriate  ava.!lntl.€ resources so as to avoid as f ,g r as nossible any dist 11!"bAnce of '4:,... e  bssis of inter!"~·:.+::"l":il exch~n,c'3 rc~,,!tin£' fro:-?": the rror.cs~d re&~.justme!'l~. ''  Traces of t ~e t a rd bar~~in!ng rrecc1inr these decler~tions ~re fou~~ ir. thA in-  clusion in th-= American and ~AH!~h sta.temP-nts of the -r,rovi~o that " G•)vern:ner.t :nust of CO'lrse, in its rolicy ~-:--"=ird~ internation3.l relcti •:>ns, ta}~P Federal Reserve Bank of St. Louis  :~~~  121  tlll.l •~eouat 'h• reqlllr•••t• of iateru.l proeperlt7•. aJl4 1• the laclueloa la the !ritieh etal••nl of a reattlnaat1oa of the GoTer11Nat•• pvpo•• •to ••o14 to \he ataoe\ ezteat the creation of aJtT 4latv'baace lateraatloD&l exchaAcei/  'b7 lrllllh  lJ•  the •Tata of  aoae\a17 aclioa.•  !he ten of the hcf•t&r7'• •'•'•••' of lepta'Nr 25 auouciq the aew und•ratand1nc which bee&M kaown. aa lhe frlparUle Acre-al, waa aa tollowa: •B, authorit7 ot \he Pree14eat, lbe lecrela17 of ,he !reaaUJ7 Mk•• the tollowiza« atat•••nl:  1. !he OoYeruent ot the Ualtecl Stat••• after coa1ultation with the Br1Uah GoYeruent and \he hench QonrJUNa\, Jol•• wi\h \ha la attlraing a coamon de!ir• to toater tho•• condiliona which u.tegu,arcl peace and will beat contribute to th• reatoratioa ot order la la\en:aatioaal econo■ic relation, an4 to purau a polic7 which will tend to proaote prosperl \7 in the world and to illpro•e the atandard. ot 11Yin« of peoplea. 2. !he GoYerD11ent ot the U.1\e4 State• au\, ,t cour••• in ita policT toward• international ■outary relations take into full accowat the requirements of internal pro1perit7, a• correapondin« coaeiderationa will be taken into account by the GoTenmenta of Prance and Great !ritain; it weleo■e, this opportun1t7 to reaffirm u, purpoH to eonUnu the polle,- vhieh U has pur1ued in the eour1e ot recent 7ear1, one conatant obJect of which 11 to aaintain the greateet poe1ibl• equ1llbr1u in the a7ate■ of international excha.n~ and to a•o1d lo the Qt ■o1t extent the creation of &117 diaturbance of that 17atem b7 Aaerican aonetar1 action . !he Oonrment ot the United State, abaree with the Oo••nuaen\1 of lrance and Great !ritain the con•1ct1on that the continuation of thi• two-fold polic7 will the general purpoae which all the OoYernment, aho1ll.4 pursu.  ••n•  3. The Preach Oo•ermaent inform• the United State, GoYernent that, \bat the usired 1tablllt7 of the principal currenc1e, cannot be  inaved on a aol14 'ba1i1 ezcept after the re-e1\abli1h■ ent of a la1ti~ equilibrlu between the Yariou ecoaoaic 171tea1, 1t ha• 4ee1de4 with thi1 obJect to propoae to 1,1 Parliaaeat the readJust■en\ of 1\e cv.rreaq. The Go•ernment ot the Uni\ed Stat••••• alao \he lri\iah OoYernaent, baa ••lco■ed. thi1 deeiaion in the hope that 1\ will eatabliah ■ore aolld fou4a\1on, tor \he atability of international ecoao■ic rel8tion1. fhe Uaite4 State• OoTermaent, a• alao the Br1tiah aDd lreach Qoyeruaenta, 4•elarea lta laten\ion to continua to uae appropriate a•allabl• reaourcea 10 aa to a•o14 aa far•• poe1ible aJQ' 411turbance of the ba1i• of interutional exc~• reaultinc froa the propoaed readJuat ■ent. It will arrange for 1uch coa1ul\atioa tor thi1 pQJ"J)oae a1 ■ay pro•e neceaaary with \be o\her \vo GoYerm1ent1 am their authorised. a~nciea. Federal Reserve Bank of St. Louis  1'-. !he OoTarDMnl of ,he Ual\ecl Stat•• l• aoreo••r 08DY1ace4, •• are al.10 -the OoYenmenh of lr&Ace all4 Orea I lrUaia, ,hat the 1ucceu of the pol107 ••' ter\h abo•• ia liakecl with \he 4eYeloi:aent of la\eraatioaal trade. In par\icular l\ at\a.cMa \he crealeat laportance lo action being taken withof quo\aa and exchanp out d•l.&7 \o relax procr•••l•ely ,he preaent control• v1th a new to \heir abol111on.  •7•1•  5. !he GffermNnt of \he UaUed l\alea, in COIIHll vUh lbe OoYeJ"llllenta of lrance and Oreat Britain, 4••1Na and 1n1tea the coopera,1oa of \he other nation• to realise the policy laid 4own ln the preaent 4eclaratlon. It lruata that no coun\1"7 will aUeapt to obtain an WlH&aoDable coap•U tin excban~ adTant~e and \her•bf huper the affor\ lo realor• aore alabl• ecoao■ ic relation• which it h the aim of the thrff Oonrnaenh to pro■ote. • 1 On the following 4q ·.. · , . . adhered. to the pr1ac1plea et the !rlparU le A«r••••nt in a note  fro■  State to the Tr•••W7  the Belgian bbaaa7 lran..1\ted b7 the lecreta.17 of  Depart ■ent,  in which \M hl.c1an OoYeraaenl azprea1e4 ita  willingneaa to •take part•• often•• it MT be nece1aaJ7 er ueful in the conaultation• which aa, be called, ei\her between \he 1atereate4 goYernaent1 or between the competent lnatitutioaa•. and a\ated that it ba4 decided •to  1D no vq the  ■onetary  a half and which  ha ■  policy which U had carried ov.t during \he  la ■ t  ■ odit7  7ear and  bad the effect of aa1uria.« the coaplete atab111ty of the  !el.clan franc in \he international excha~ aarket. aToiding arrr diatlll"banee in  \hat ■arlte,.• 2 On loYe■'ber 21,  1936, lh•  Swia ■  and Dlltch (Joyernaenh &Dllouaced. \heir accept-  ance of \he priacipl•• of the !ripartite Jcr••••nt la 14ent1cal nol•• which were lruui Ued by the Stah lo ,he !rea•UJT.  fh• ten of lheH noha  elated thllt the two goTerament• ha4 •oopl•ano• of \he 4eclarat1oaa b7 which the OoTernaent ■  of ha.nee, ONat lr1ta1n  and  th• Un.llecl Sta\•• baYe •••n flt to  c .·.·  expreH their tntenUona vi lb regard to their aoneta17 pellq and adhere& to the  general prl . _. : etated 1 'l'reaaury Preas Belea••• 2 'l'rea1ury Pr••• Releaae, ) 1'rea1UJ7 Pn1• !eleaa•• Federal Reserve Bank of St. Louis  la their Tr1parU \e 4.ecla:raUon of Septe■be:r 25, 1936. Sep\ ..ber 26. 1936. of loTe■Nr 24. 1936.  Sept-■ber 25 ...3  12.3  fh••• •tateuate were leclaraUone ot lalea\ AIMl. wre aa4e effeoUn bJ' a Hr1•• ot bilateral acr•n•ata la October •o•aNr which ••bbltahecl a uv international gold ••Ule•n\ qet .. which lacla4e4 aot olll.7 the poud, lhe  hench franc and the dollar, lnlt alao \he •lea, lhe lw1H franc and the guilder.  Until the•• a«r••~enta were conclu4ecl the acope ef official Aller1can and Brlli•h exchange atabilbation open.Uona •• oolldaoled prlor to Sep\..ber 25 w.a actWl.117 reetricted.  fho~ the Secretary had obtaiud ,he appronl of the Preeident on  June 8 for the aal• of gold to all central bank• throu«h the Stabilisation ru.nd , the of:f'iciall7 annoW1ced ~ld pollq of lhe !rea1W7 vaa a\111 that of Janwu7 31 , Under thia poliey the !ree1lll7' wae ready lo nll gold for export onl7 to  1934.  central banka of countriea on the gold 1tandard when the exchs.~e rat•• of their raepectiTe currenci•• reached gold e%porl point.  Under thia polic7 the United  Stat•• !rea•UJ7 could not, after the french, Swi11 and Dutch deTala.ationa. aell gold t o ~ of th••• countrl•• or to the Unl\ed Eingdom, for neither Great BrUaln nor Holland were on the gold ltandard and there were  DO  tixed ~ld  parU1ea wUh hue• or Sviharland !roa llhich gold export poiah could be cal-  culated.  !he lr1'1ah ~zch•~• KqualhaUon .t.ceoWlt would no\ b~ foreign ex-  change that could aot be conTer\ed into eold at a fixed price an4 was tbu.a temporarily exclQded !roa lhe oontiaeatal a1 well •• the AINrlcan aarkeh.  It waa  for a few weeks aetuall7 doraant. IT.  !he !rlparUh Agreaenl - Con41Uon• for ParUo1patloa u4 Working Agruaenta.  A.  1orn.laUon ot the Priaciple of leclproc1'7 la Gold Dealt~•·  Th• central principl•• acr-•4 apoa in lhe ..ptlalloa1 preceding the conclu1 !he correctn••• ot thla 1\atement ahou.ld be coDflraed when the exact authority and p. granted b7 the PrHident on June S la checked. See pp. Federal Reserve Bank of St. Louis  124  . ,•  . , . . hlpartlte  d·••••.., ra,e, .  .  .  ..  -  aa4 reelpnell7 ta p14 leall-.  tu Wallel It.tea w.U prlaoiple1  Acr••-, "" .,..i NUU\alloa . . . .ralac · 1  ---  ...-S• .fte Hll41'lw a1-.r ,,,,,.. -.-· 4L--.c. . ~  ,  Hll pll lo elbar •aalrlea la aocoNUCe w11• ._...  fornlalecl la a ..., • •,  WN  -~  :,....... :.---,:..;:.r .  et pollq  2  &pp1'0T. .  ea Sepla'ber 27, .whlch • • llau4 •• Oolohr 12 after IM  arrupaeata ba4 beea woral o•t wUh lhe luk et  'b7 Ille Pnli4eal  -••u.17 leouloal  aaclaa4 u4 tM luk et haaee .  !he tea ot lhi• eta,. . ., •• •• tollon:  •bpp1-uac ,i.e auoaeaea11 -4• '7 llba ea Jaa'G&F'f 31 u4 hltna17 1. 193!J, le lh• effect lhal the !rean17 wo1114 1nlT pl4, aB4 •• Jauar, Jl, 1934, lo lhe aal• ~ p14 fer ezport. \he lecNl&JT of Ille treuU17 •'•'•• lbal (bereatter. aD4 uUl, •• hul7-fov hoar• aoUoe, lhla atat••nt of lateaUoa aq be rnoked or allen4) lhe Ual \eel ''-'•• wt.11 alao Nll p14 for ba•la\e ezpori lo, er eanaark for the acooa, et. lh• ezcbe•r-. -.aa11aatlo• er a\ab111aalloa taa41 of Ibo•• ooutri•• wt&o•• t1Ul4a 11k•l•• are otferln« lo Nll pl4 lo \he tral tec1 " · ' · · • proTl4e4 auch offeruc• of col4 ar• ., •Geh n.lea u4 apoll auch l•ra• and. ooD41UOlll •• \he leONIU7 aq , _ • •, a4Tanlapou lo lh• ptbllc la\ereet. !be leON\ar7 aaoaoea her•Uh, aa4 will hereafter aanoua~ clall.7, the ..... ot \he forelp cou\r1e1 ooapl.7111« w1,b lh• fore,oiq coD4Ulou. All nch ealea of pl4 will 'be IIIMle throllgb lh• reteral 2eaem 1aat of In Tort, a1 f11cal apal d lhe Vallot lla\ea, llpOn the tollowlDC -lanai aD4 eoa41Uoaa whleb the leore\&r7 et Ille hea•V7 •at a4ftBlqeou lo \he pa\llc lalereal: et p14 will be M4• al t35 per flu euce, plu eae-qaar\er per oeal llu411nc eharp, u4 ■alH u4 un&rkiDC will h pnrut '7 the •p1auou bau4 ader the 8o14 haene Ml of 19)~. •3  h••  l&l••  ».  hep• !aka lo llab \Illa Prlaotple WfeoUve •• Ille -.rloaa 114e.  la orur to ~ ' Ille ulaUac &JTUP. .,. u4 proee4vea of IM  tloa 1u4  a.a  1,a,11l■a­  lh• J'. .eral lanne leak et In Ten lo Ille ·MW pellq. aerial•  ao41fl•llou la  •zl•Uac  praolloe  WN  1aln4ue4  'b7 Ille fru11117.  1 Ille .,.rauac reoorta 4o • ' ••la1a Ille lu\a et the acreeaala naobe4 . , De ~lou tnanrl••• u4 \he lat la lllenfon auJeol lo oernollaa. ;. ,-. I INletaJ7.'• leller lo lhe 7e4eral bHrn luk et law Tert, Oo\e\er 11~ _ , , la :~ U o a a - llvlac uil hlliac tel4 aa4 lllnr - lo14 - 1eaera1• Ille. PNH leleaH of OoloNr 13, 19)6. - :.  ) he1il7 Federal Reserve Bank of St. Louis  125  1. 6'}:>proTal b7 the Preaiclant of \he Uae of \he lta,tllsation Yud to Iapl... nt the••• A«re ... n\1. 0a lh• .... 4Q that th• formal etat ... DI of lh•  UV  poUq - · apprt"4  the Secret&17 obtained continaationt,from the Preai4ent of the authorit7 fir1t grante4 on June 8 for ,he ul• of gol4 'b7 the Stabilisation~ to all or U7 foreign gonrnaenta, foNip ceRtral baDlca or the !au tor Inhnational Settle1  ■ent1, and  aleo obtalaed hi• approTal of the pvchaae of cc,14 fro• all or  AltT  foreign go•enmenta, foreign central banka or lh• !a:Ak tor International Settle■ent1 b7  the uae of dollar•, font.en excbenp. or other obl1pUona. currenq-  or 1eeurltl••• !he ten of the Secret&r7'1 letter to the Pre1ident aaklng for thia authorit7 ••• •• followa: "My dear Mr. Preaident: 1 I refer lo rq letter to 7ou coRcerlling the 8\abllisatlon Jund, b7  7our approTal of which, dated JW1e !, 1936, 7ou authorised the aale of gold thro~h the l'llDd to all or &'SIT foreign eonruent, or central bank• in 1uch qua.nt1t1e1, at euch 11•• and with respect to «oTenuaent• a, I aigbt 4••• ■oat adT&Dtageous to the public interee\. Ia rq letter I pointed out that on Ju:o.a.r17 31, 1934, with ,-om-approTal, I announced that I would~ lllporhd gold at $35 (leH one-qaarhr ot one percent) per ounce until further DOtice and 1ell gold for export to foreign central bank• certain cireuaelance, at $35 (plu1 one-quarter of one per cent) per ouce; and that S•ctloa l0(a) of the Act of 1934. e1tabliahiza,; the Stabilisation '1m4, authori1e1 •• 111.bJect to 7our a.pproTal, to deal in gold aD4 forei«n exchan«e by the u.. of that 1und 41rectl7 or thro~ auch acencie1 •• I MT 4e1lgnate. U aow appear• that 111 connection vUh •al•• or the public lntere1t UT require the purcha1e of gold throuch the Stabilization 1uncl, b7 \he 111• of dollara, foreign exchange, or other obl1ption ■• currenc7 or aecur1ti••• from all or arq foreign g0Termnent1, foreip central 'baue or \he !ank tor Intenatioul S.ttlnente. !he aalea aD4 purchaHI referred to are aod 11017 to be aake 'b7 the 1tabllhaUoa or etulhaUon fund.a of foreip goTermnt1. It 7ou approTe, uUl further 1 See p/ ,i 1 tor the text of thi• letter. In all the correepondenc• in lhe til•• ucept \he Secreta17'• letter here quoted, \hi• letter 1• referred \o aa !Mlnnc beea 4ate4 Septeaber 27 and approTecl b7 the Pruldent on lepteaber 27. !'hen 11 no letter in \he tllea concern1oe \he aale of gold which va.1 appron4 bT the Preeident on S. It there were two letter, the text ahould be corrected. Federal Reserve Bank of St. Louis  Gold••••"•  ~11•  troa ,-.  •11dl pvcbana  ■uh llM• u4 la noll ...--  at pl.4 al  .l~lfl ..a "1th reapeol lo •Mil pnnaeala er 1-ua •• the leent-t J ~ : ~ ,_lrM•UJT 4ffaa • • ' a4ftlltapou lo tu pu\llo lat•r••'. I elaall-. ~lal• U U rill alplf7 allCll apprnal '7 alpalve of 11- ~ . tle• ·•I \be toot et \Ilia leller. · hl lhfalq 79va. (alpe4) •rceatlla• Jr . .lppro•e4: hGNlaJT. 11PM - hanklin D. •oaeTelt  T••  ••1117  fhe lhlte ......  lept•hr 27, 19)6.• l  Uter th• leehalcal arraapaeata vlth ....., u4  au  \he MW pollq aaoace4.  at  ~ WN  wlall• upUa\leaa ••n ■1111 la  ceaple\e4  procre••  with Belc1a, lwi\serl.u4 eat aollu4, ... fvlller a\ep • • \aaa lo luve the eaoe\h aa4 nezl'bl• epera\loa of tl:le..,, qata lhreagh Iha l\ab111aa\1oa hn4.  On ln••r  lhe pvcha••  fro■  6  the hcr•larJ' o\\alael lhe apprnal ~ Ill• Pn11,ea\ tor  u4 aal• of pl4 lo \he h•ral hll4 '7  $35  ha4 at a tla\ price of  per oaace.  the tut  et tu  tu  lta\illsaUoa  hcr•IU7'• le\ler oa  th1• alter••••• followa:  •1, 4ear Ir. Pna14a,: Ia oeanocUoa rilh the recl,-oal arraapaeala tor Iba parcha•• u4 aal• of p14 . ,.... Ille VaUe4 Slat•• u4 lh• ezchuce ecta.a11sa11oa er 1ta'blll1aUoa fad• of foreign ooatr1•• ••I -i, pv,_, lo the ata,_a, of Octolter 1), 19)6 u4 l•ll•r• apprne4 '7 7•• oa hpt•ber 27, 1936, ti ~ NC. . Moe1MJ7 tna llae to ltae tor ov •tablllaaUoa Jla4 \o 'bv, pl4 troa or aell eo14 lo Ille h•ral hnd... If To1upprne I propeae lo llake pvcbaM1 u4 a\ ,he flat price of $)5 aa oae• wt tbo•' a441JtC or ••\tracUac the eu-foa.rlh of OM per cea\ cbarp. I aball appreciate ti 1t 7011 rill alplf7 auch approftl 1-7 alpature of the aolaUoa al lb• tool of lhla letter. •a1 tliflllq 7ova, (llpe4) llerpalha• Jr. Appron4: hen'8.J7 of th• tru1V7. hanklla D. looNTe1'  Jr•••  aal••  ••cb  ••IIJT  De lhlteBeue,  -......r 6. 1936.• l 8fnuaollo•• -  2 . . . . . . . .,. 1. Federal Reserve Bank of St. Louis  2  -.1ac  u4 hlllac Gol4 u4 11lnr - lel4 - 0nen1• file. ·,  121  ·0a lepl•••r d  27 tu hontar, alao o\lat.u4 the apprnal  ~  U. PneU..I  a letter lo tu ~••ral haene -.U d ..., Tork aathorisiac IMII to aa-  MU7 11lln p14 1-r• 11814 '7 the heaaU7 fNII Ille U.Uel ltalea/Ottloe fer lbe  pupoN of l&le h accor4uce wll!l the alal•••I  et pellq ooaoenlac nolprocal  p14 4ea11ap with torelp pTenHa\1 u4 onlral . . - . . aplaat a ore41t oa  their hoka la tanr of Ille fr••v•r of the Val\e4 l\a\ea of $35 per ow.ace plu  lf4f,, with Ille a4enlu41JIC Iba\ lf tile pl4 waw aol ao ue4 U wo-14 'be ntvaed lo the fnaaver ln accori.aace wllh lectloa 29 of lhe Pro•laloaal leplatlou 1 leeu4 a4ar Ill• Qol4 beam .lot. fld.1 letter • • au\ lo tu h4eral •••n•  . _ of Wew York•• Octol:ter 12, lop\her wllh a letter eoDflralac Iha\ Ille  lecnla17 1 a pv.l,llc a1a, ...a, of Octo\er 12 approft4 1'T Ille Prea14enl •• lep\eal,er  27 coulUalacl  a ltceue wi\hla Iha ..aa1ac et lhe h4eral ..  •en•~••  llcna•  ••'nal7 5, 1931', u -JIUd.. u4 Iba\ Ille pl4 eo14 pvnaal ,hereto ul.4 i., Ille •ehral •••ne :laak ~••Tork for upon '°• or eanarc  ft-11-1 4ate4 aigh\ N  for \he accoal of, \be behaap -.-1.1.uoa or S1&\llt1alloa h.114 pvclaadq each pl4. 2  llailar le\len were an\ oa SoftllMr 2J wllla ret'ereace lo \he a11p-  pl-n\a17 atat-■at of  \be  S.erelar, of Iha\ 4ale.l  la 1h11 WIT Iba ponn of 1M ~e4eral lank ot ... Tork  lo laol4 aa4  4eal la pl4 the •utarJ' pollq of, .31, 1931J wn 'broqht la\o llanloa, wt\h the  MV  anupaea\1 u4er Ille frlparllle  .  I. a.,lluce "1..  . · 'a.  .apa....a,. .  \he  CoalUtoaa of Partlolpa\loa 'b7 Or•t Jlrl\ala  ~  hue• .  tecblcal arrur-nta aece11arz to p•I blo effect \he aouluz yrN1 1M ,_.. L. \ .. 1.. ~ . 2 9!rauaot1oaa-Jlwiu u4 lelllac lo14 u4 111nr--8ol4--0.ural• file. 0.q of Ill• lecn\a17Ta two letter• la la lllla file, k\ '8th are ncapltllla\e4 la lallen ef UD0Wle4pnt fra lhe ~e4•ral letene lank ef • • York. 3 llr. Dlelrloll'a •1tablllsalloa---ral--Wcrr•ber-l)eceabff 1936• flle. Federal Reserve Bank of St. Louis  t\'  128 ••I• ~eoUated. between \he hUhb, beach and Aaerlcan ~ea earl•• ..r•  wofkal  ,u  '-'"••n the 1ederal hHne Bank of • .,, York •• flacal  -«••' a-4  coanrl lato gold the ltalanc•• ln lta own currenq aceuulated each d.q b7 the olher central  bank•• a  result ot •xab•ng• control operation• undertaken b7 1t  and to releaae froa earaark eutficient gold to aeet oJ»l1gaUon1 incurred 'b7  the foreign central bu.k •• a re1ult of auch operaUona.  !he7 further agreed  to adriH each other dail.7 of &DT tranaacUon1 •• a rHult of which gold vaa  to be eanaarked or releaHd under t ha aoneta17 agreeaent I between the r Hpe cU Te !reaeuriea.  l  Since the lrench 41d aot fix a 4etin1 te new gold Talue of the  franc but allowed fluctuation within cerlain atated 11a1\a and aince there wa1 no fixed official gold price ln Loadon ot U7 aort, both th• Bank of hance and the Bank of ~land underlook to quote ba,-ing and Hlling gold price• to  the 7ederal !eHne !ank ot lew Tork which woul4 hold good for each day tor the  2  eettleaent of control lraD1actlon1. In a cable receiTed oa Oeto'ber 14, the 1On1ebroaJ710, 1937 the 1ederal hHrTe Bank of In Tork cabled to the !ank ot :&n«land and the lank of ha.nee •u««e•Un« u aapllticaUon of thia under•l&D41q to read.: "!he Jank of IDglmd and. 11- Jederel JluerT• Bank of Bew Tork will adn 1e each other 4&117 of U7 tran1acUon1 •• a reault of which «old 1• to be earaarnd or relea1ecl uder \he aoAeta?7 agreement between Great Britain and the UAited Stat••• and aei\her par\7 ahall be o,11«e4 ll.Dder 1uch agre. . .nl lo earaark or re lea•• golcl of which auch notice •hall not han been g1TeD with \wen\7-four houri' notice.• fhla aapliticatlon ••• \he out.rrowth of 41acuaa1ona with the Sw1•• latioaal Bank concern1nc ,he eact laterpretatlon ot th• •twen\7-four bom-a• clauae 1n \he Secreta17 1 a public 1tateeen\1 of October 12 and lonaber 23. !he lank of ~and did not fonall7 accede to thl1 apl1f1C811on which wa ■, bowenr, in accord with the lnfor•l und.er1tand1Dg1 reached vi th and w1 lh thel:r ac\ ul pract le•. See pp-. t4 . \ 4 '-2 !he operaUq fil•• do not g!Te the ,en of th• aoneta1"7 a&ree■enta reached between the !rea,url••• nor do \he7 g1Te the full detail ■ of the arrangaenta  'h••  worked out i..tween the !a.Dk of Jn«land. the lank of rranc• and the lederal Relank of In Tork. In particular \he ab1ence from the files of a»7 details oeaoen.1nc lhe arr&nge11ent1 vUh the lank of 1ranc• leaTea a pp. !he 1tataent la tu ten ii baaed Oil a ■noran4• of Sept . .be:r 29. 1939 in ltr. Dietrich'• 81ol4 - 19Js-9• file which .,., •• tha\ u was aUp1llated iD th• fri~U• ~ ~ • • ' • Iha\ both bclalld and franc• would. quote dail7 b~in« and Hlllq prloea ot pld. In practice the "1D4' • gold \ran1acU on, vi th the lluk of hance . u alMM,a bj the tpecltie autllorisat1ona, ••r• uarl.7 all on a dollar bad•. !be hnch arranpaents, \herefore, reaeabled aor• cloael7 thoae with the letherl.a11de  •n•  lank than \hoee with \be Bank of IDglaJMl. Federal Reserve Bank of St. Louis  129  lank~ ~land contlnaed lh1• GDder•landillc ••  follow■:  •• •hall adT1.•• 7ou 4a117 of lh• London gold price, a\ which prloe eball be prepared lo bQT froa or 1ell ,o 70u gold to ••Ula u:r ooalrol traaaacUon• in aterliq ,ou aq 11.Dderlake up lo 7our olo•• of 1"ulu11 on that day. 11■ 1larl7 we 1hall a4The 7ou of &D7 tranaaolloaa a• a re•ult of which we either earu.rk or releaH gold wUh 700. al 7oo.r po.bl11bed prlcea.•l  N  All theH arran«9aenh were aad• aubJect ,o aodlticaUon or caDcellat ion  b7 either party on twent7-fov hour,• aoUce. In order to aToid  &117  confuaion \ha\ •1cht later arlH, apeclal gold and  eurrenc7 aceounh were opened b7 \he three central  -G -,~ '.-t-'. \, bank ■  U:m'ff  which \he  act1ona of their reapeetlTe 1\abillsatloa were to 'be pasaed.  tru ■-  !he ,terli~  .__and franc account, opened for \he 1ed.eral leHrYe Jank of lev Tork at the Bank  ----------------------------~-----  of ~land and th• lank of hue• were 4e1iguted lo. 3 aecou.nta and the gold  aecounh opened were dedgnated Aecoun\ J.  ~  With the•• arrance-ent1 coaple\ed the !reaaUJ7 aade public lta official of pollc1 and D&lled Great Britain an4 1rane• a• countrie1 co11pl71ng  at&te■ent  vUh the  condition■ laid dovn.3 At the ....  11• the BriU1h OoTeruut con-  ftnaed the agreeaen.t and annowiced that aiailar arra.n«aenta had been aade betvun th• tfaited lingdoa and ha.ace.  ~  ---.  Coapliuce with \he CoDd1Uona of ParUclpaUon b7 Belgiam, Switser-  lan.4 and Bolland. !he  •tate■en\  of principle of Sept•ber  25  coTerinc the friparUte .&«r••ment  had 1BT1ted the cooperation ot other ne,toaa lo realise the policy laid down and 1 •!ransac\iona - IQT1ng Selling Gold and S11Ter - Gold - Great ki\ain . . _ of Jnclan4• file.  2 n1•. ) treu1117 Federal Reserve Bank of St. Louis  pr••• rel•••••  of October  13, 1936.  130  \he preaa rel.ea•• of Octo'ber 13 prori4e4 tor reciprocal pl4• vi\h the  ezcbeaa- eqwlsatloa or atab1111alloa t1Ul41 of ooaa,rl•• epeoltle4 tor parUc1paUon.  ••'lac lhe 00M1,1ou  Such ha41 "r• a«encl .. or 4eparl•••'• of  .-.•n-  ..a,1 an4 uder\akin«a betwffn a,ab1111alioa taad.1 were lnter-goYermaan\al ln  character.  lel«lu, bonnr, which va1  ,u  ft.rat ooulJ7 lo a4her• to th• prin-  ciple, of th• fripart1,e -'cr•..en,, 414 aot at that Ila• baTe a S\ab1111ation J'wad, aJld the  Swi•• hD4 wa1 ao,htq  book• ot \he Swi u laUonal Jank.  ■oN  lhan a HcrepUon of auete on the  In orier lo aaln\ain \he inter-gonrmaen\al  cha.racier of the agre...:ta ,he Tr•••UJ'7 ln1l1\ecl u:pon obta1a1n« a eo•enaaent paranlee tor the maderlakiDC• of the central banka when  th•••• rather than  atab1111atlon funda, were de1iguled aa ~•ta "'7 partlc1pa\lnc cowitriea. a c~antee waa relactanU.7 gl'HD by \he lelclan Oonrnaent for lhe lenk of Belgia  OD  loYeaber  Such  ••t 1onal  9, 1936. 1  BJ' the aiddle of •o•..ber uder1\&D41ac• were reached be\ween the Belgian, Sw1u and Dutch !reaaurl•• _and lhe U.Ue4 Slate• !na1UJ7 for the adherence of lheH CO'Wltriea lo \he !rlparU \e ~•enl and  Oil  •oY..ber 17 the PreaideDt  approTed the followinc aod1f1cat1on of the Secretar.r'• public  ■ tatnent  of  October 12. 2 •sa:ppleaeaUa« tba announce..nt aad• b7 hl• OD oc,o'ber 13, 1936, relating to the ■ale ot gol4 for export, lh• S.cN,aJ7 of lh• hea•llJ"J" ab.h• that (hereafter, an4 utll, oa lwentT-four hoar,• aottce, lhi• 1lateHnt of lntenUon..,. be NYoke4 or allered) the lJaUe4 lta,••• in addUlosa ot gold lo the exchange equallaatloa or 1lablllaatloa of foreign ooun\rl••• will alao ••11 pld for laaedlate e%p0r\ lo, or ea.nark tor ,he accout ot, \he lrea1vie1, or &DT tlacal acencle1 ac,1ac for or who•• act ■ 1D \hi• conucUon an paran\eed b7 \he ,rea•vl••• ot lhoN ooaa\rle1 who•• treaaari•• or  ,o •al••  1 !be lat ot \he paraa,ee 11 pTea la llr. Dle\rlch'• •atablllsaUoa, SoT.-Deo. 1936• tile. !hie paraalee • • ueo\la\ed for \he !naav.J7 1'T Ir. •rl• C.chran Iba ftrat lecre\&J7 ot the .Aaerlcan la'ba117 la Parle u4 forwarded 'bT U. lo \he leen\aJ7 on loYeaber 17. !'he lelgiaa Oo••nm•nl alkecl Iba\ U lhoal4 ao\ be aade public vilhou.l 1'• oon..nt u4 polatecl out that \he ..Uonal lank ot !elci• ••• flacal a.cent for lh• State. luh paran\eea laplle4 a chance in lb.a relaUoaahip to cenlral bank• of eonnmenla of lhoH oountrl•• which •till adherecl la pneral lo lhe priacipl•· of Ill• ln4epudent cea\ral bank. 2 T· ~U7 preH rel••• loT..'ber 24, 1936. Federal Reserve Bank of St. Louis  131  fl•oal acaacl•• ao ac\1q or caaraat•e4 ar• llkewi•• effertnc lo ••11 col4 •• ti. Ualte4 Ital••• proT14•4 etferlap ~ p14 an al 11aohral•• ul llpOa •uh tenaa all4 coJMlllloa, •• the lecretaJ711a7 4••m ao,t a4'Y&Jlta.,..u lo the pabllc latenal. fh• Secret&r7 aanouce, herewith, an4 will laereafler anouc• 4&117, th• naa•• of the foreip eoa\rl•• coapl7l11g wllll of pl4 '7 the Ua11e4 8'at•• will the fereeota« oon41Uoa1. All 1uch York, •• ftacal acnt of be -4• throach \he J'ecteral leHn• lank of the UaUect Stat••, 11pon th• folloviq lena1 and oon41 Uoaa which lh• Secre\&r7 of \he !rea1R17 4•e•• ■o•' a4TUtaceoua lo lh• public lnlere1t:  lal••  •ew  Sal•• of gold will be •4• at $35 per fl•• ouce, plu &114 •anaarkin« one-quarter per cent han411nc charce, aad. will be gonrned by lb• legu.laUon, haucl uder the Gol4 leHne .Act of 1934.  •al••  !he S.cret&r7 fvther aDJ10QJ1Ce1 th&\ hil atal••DI of Juur:r Jl, 1934, relaUnc to the aal• of gold for •~ort, 1• aooor41qq wUh4rawn.. • 1tate■en,  !h11  wa• l11ue4 oa  loTe■ber  ~  23 for releaH •o•aa'ber 24......, with a  egppleaentU7 e\ateMat Daldng !elcla, !he Idherlan41 u4 Swi taerlan4 •• countrie1 coapl7ing with the coadUion1. by the  U wa• 11114• parl of,. cablef 4lepatched  1ederal llaHne lank of •ew Tork on loTnber 24 lo the hUoaal le.Dk of  Belgiaa, the Swha Iatlonal lank and the letberlanda knk.  After q_uoUng the  Secre\ar7'1 atateaent each of th••• cablea ad4e4 \he followlq para&raph:  •In co1mectlon wi\h th••• atateMnt1 we enaaerat• 'below lh• l•n• and condU1on, which we andaratan4 were aagge9'ec! 4v1ag the recent 41acu1alon• between 7ou and our TreaaV7, ba\ lhe lechaical 4e\ail1 of which 7ou and we ahall of covae contlAae to 41,cua la th• light of e.xperience pined fro■ actual operation.• !he con.di Uoaa DUecl were identical •• far •• the hlclan and Svha  •auonal Banks were coDcerne4 except for the prl•• at which the7 acned to sell gold to and b'Q" gold from th• recteral •••en• lank of  •ew Tork for 4e-  1 11T•J7 111 Bnaa•l• and Berne. rHpectlTe}T. !'he len of ,he cond.Uioaa  •u«-  patecl la lhe cable to the Swill •auonal Jal1k wa1 •• follova: Per kilo flu prlc•• WN: l hiH franc• Jelca• to 16,9D-92 6,61!.]0 lelllnc gold/the rederal IH•n• !au ll,1&9.IO Pvabaaing gold from the recleral IHene Bau 6,615.46 taclo 4• gol4 of price, Hlling and bQTia« lta fln4 !he MH laUonal ~ 1936. (check). oa  !lie•• Federal Reserve Bank of St. Louis  132 0a the bad• of reciproei t7 1n acoord.ue• w1 th the atat ...nt, of llr. Jlorpnthau of October 12 and •cn-••'b•r 23 lwha •auoaal Bank le prepared \o ••11 ,o federal ••••ne Bank of ••v Tork•• tlacal acent of the United Stat•• g-old for 1••4la\e export or aaraark at  •1.  Mu trance  4.973.92 per tlna kilo ud ,~ gold from federal la-  Sviu franc• ~r fine kilo  the United. State, at ••n• !an1c of •ev Tork•• fi1cal agentbothofdel1nr7 Berne.  Swla1 IaUonal llallk and 1e4eral leHne lenk of •ev Tork will adYl•• each o,her 4a117 of &117 tran1actlona •• a re1ult of which gold 11 to be eanarked or nleaHd under th11 arran«e•et.  2.  3. It  h underdood and agree4 that 1h11 arrangement aq be reYOked or altered b7 either par\7 on 24 houri DOtice without preJQtliee of cour1e to pa1t tranaactlon1.• 1  Since bo\h th• Jelgian and Swi11 Janka  acr••4  ,o baJ' and ..11 gold at fixed  price, and 1ince the United State, Treaaa17 bad alao eatabliahed fixed l)Q.ring and selling price, theae agreement, proTided for atabilisation of the 'belgadollar and SviH franc-dollar rate, on what uouted to a golcl 1tandard ba.111  ~  vi th rid• gold poinh on a twenty-four hour 'bael1 and 4epend1nc on official gold transaction,•• a atab111s1nc ••chanlam rather than on print• gold arbi-  trage. !he condition• propoeed to \he letherland• Bank MM elo1el;J'-N1eabled thoN agree1l on- vi\h \he ·I nk of PnBee.  81nc• the Dutch atabUhation fud va1  not bound to bv_y or ••11 gold within &JV' llai\a fixed b7 law the Ihltch agreement tor th• purcba•• and earaarking of gold and 1t1 aale and rel•••• fro• earmark va1 not baaed on a fixed guilder prlo• lNI on tb• dollar price of \he United  Stat•• Trea1U!'7.  • proTiaion wa1 al10 1n.. rte4 requir1q preTioa1 con1ultation  coaeeralnc th• q>eraUon, of the \vo flm4• ln each o,her• • aartet1.  !he Ian  of Iha ooJl41Uon1 propoH4 to the ••thn-land1 Bank in the cable• noted abon was •• f ollov1:  1  !h••• cable, are all Federal Reserve Bank of St. Louis  in Jlr. Dietrich'• •stabllisatlon loT.-n-c.  1936• file.  133 •1.  S-etllerlu4a lank la pnpue4 to eoanll wUh u •• flual apal et tu Uni te4 S\al••. fro■ 11.M lo "·••. •• lo lh• aaouh et dollar• to be purchaaed. or aol4 la Jaater4u u4 lhe aaou\1 of plllera lo N pvc!t&Mcl or 1014 la Tork, •• well •• to tile rat•• at which or of the cnarnncl•• la ,u,uoa Ifill N -4•.  pvcha•••  aal••  ••w  2.  On lhe \aala of reolproc1'7 ln. accor4aae• with the ■ta\ ...nh of llr. llorgathav. of Octo'ber 12 aa4 hn■lMtr 2) Ul7 4ollara lhu acq111re4 for tbe accout ot lbe Dalch lzchenp -..i1saUoll hlll4 "111 a.poa 70v requal N coanr\e4 'b7 u lato pl4 a\ th• rate of $35 per ouc• flu plu 1{4 of 1- baa4lln« oharp an4 U7 p114•r• lhu acqllired tor \he accout of 1e4eral •••n• lank of lw York •• f1acal apnl of \be Unlle4 S\alea will 11p0n ov requa\ be couerte4 b7 7011 lnlo gold oa the 1-.ala of $35 per ouc• fine l••• 1/4 of 1~ han411ac charp.  ).  flie ,old thu acquired. vlll 'be earaarke4 for accoa.nt of th• owner la the cou\17 of \he olher par\7 and "111 at tb8 nque8' of the owner be shipped to th• coua\17 of th• ovaer lJ7 flrat anllabl• .,.... r of hh cov.ntry, lh• coal of ahlpna\ including lnauruce, Mltlnc charge• and arq lou lD wlpt through . .lUn« alwqa lo be 'boru )T tM Da.lch Xxchanp lqulisaUoa had.  4.  letherlanda lank an4 1e4eral l•Hn• lank of lew York will a4Th• each other 4aU~ of 07 \ranaactloa• •• a realllt of which cc,14 la lo 1- ear■arked. or releaaed -.!er Ihle arranp■ ent.  5.  II le uderatood and a«r••4 that th11 arrance■ent aq be NTOke4 or altered b7 either par\7 at 24 hova aotice without preJadice of cove• pa1t \ruaac\ioaa.•  ,o  the openinc ot apeclal accoa,a tor the coalrol operation, ot th• aaa• eort and the  .... deaigna\iona •• tho•• eel up at the Bank of Kngland and the lank of huce. I. l'allve lo Inclde Sweden Aaonc lbe ParUcipaUng Coutrlea. !ha three cou\rl•• edheriac lo the !rlparUI• .&«r•••nt la IOT..ber  wen all  u■'Mr1  of ,he  for■er  •eol4 bloc•, bat effort, were aad• alao lo 'brine  . . .1-r, of lh• 1lerllllc ar.. vi \hin t'I• ■cope which were uaucceaatu. allon "' the uptlaUoaa coDd.uc\ed with he4en. Federal Reserve Bank of St. Louis  1936  fill ■  le  0a Oe'°\er 13, lhe 4q ••a lhe Secr•l&J7'• •'•'••nt  -lac  Onat  •ua1a  u4 huoe aa haYlq ooapllecl vUh Iha oo1141Uona lal4 4on u4er Ille frlparlll•  ~ - , •a• laau4, the IYeJ"tp• 11kabank vaa approached. with a Tlw le  tu  aegotlatioa ot a aiallar arraac-•I tor nciprocal eol4 4eallngal, 'IMit 11 replied. lhal Sveclea had ao atablllsatloa tml4 aa4 that the likabank'a gol4 lran•acUona nre tor Ua own lank ot  It taqa1re4 whether, if the 7e4eral  h••n•  •ew Tork ahoul4 bv., pl4 troa the •tubank t, voul4 accept a price cal-  culaled Oil lhe baela ot the London pl4 price, aD4 whether U would Hll gold to \he tikabank lrr•11>•clln ot the exchan«e ral•• ot gold atan4Ard countr1ea.  !he 7ederal •••"• Jiau replied. \hat U ha.4 referred lhia fr••V7 which bad eucgel\ed Iba\ Iba\ pneral 1np be taken up with lh•• bJ lh• Svediah  t•-' ton  frea,ur,2  •••aace  lo the  of reciprocal gold 4eal-  lhrouch \he SvecUah Legation  ln Vaahtngton, and Iha\ U could aol 4houa1 auch quationa uaUl the general quaUon va• decided throQ&h that chazmel. 3  Sweden 414 DOI, howeTer. becoa• a  aea'ber ot the 'fripartUe. baainc 1'• retuaal oil \wo aaiD gromad1 which w•r•  atale4 'b7 the STeripa Jlibl>ank lo \he 7•4•ral baene lank•• follows: 1.  !he London 1014 aarkd va1 tr••l.7 open to lhe herlpa •11cabank.  2.  !he aone\&r7 pollq of Sweden uaured l \ of a,abllU7 1n the  aterllnc an4 ,heretore, af\er the friparUte,  4' ••  auch  a\abl-  11'7 ln •av tort, Par1a, BruHel• aa4 lvich •• va• ell,Jo7ed b7  ahrllnc 1, ..1t. 0onHqunll7 the SYer1gea litabank ooa.14 ••e ao a4YaDtage 1a aaki.DC an acreaent fo r ~  rect.procal cold clealt.y1 wUh the UnUecl Stal••• 11h11 la interred tro■ retereac•• lo cable correspondence not ln the tll••· It tu lalllaU•• va• not AaerlC&ll ,be lot ehou.14 be oorrected. 2 !be ooDfl.lcl of point ot new between the .laerlcan \tNaeur, which wiahe4 to aake arrangeHDl1 onl7 vUh foreign gonrnaenta, and the point of Yiev ot other countr1•• vhloh elllrualed. their aou\aJ7 pol107 lo their central bank• vaa hen clearq uemplltle4. 3 Mr. Dle,rtch'• •0o1d• file. 4 ·BaJ"1n« and Selllnc Gold and S11Yer--Go14--SYerlpa 11kabank• file. Federal Reserve Bank of St. Louis  135  • • • • • Ille teolm1cal arruce-nte  ncc-11•4  to \he oeatral bank• ot the - l l • r  goll '1oo oouatrl•• b7 Iba Jle4eral lee•n• lank of•• Tork, which la efteel ••car•4 for Swed.ea eo "14• u area of uchance atablll'7, wr• acree4 lo proaptl.7. 'l'hq were acceple4 w11hoat qaaliftcatlon  Baak of lelcla, kt the SviH WaUoll&l  b7 th• We\herlan4• lank  ~  &114 the Satlonal  q11allf1e4 lie aoceplanc•  \he iue1tion of the •act lahrpretaUon of \he 24-hov elaue.  1  'b7 n.lei~  beep\ for  the aaplificaUon1 of Ihle• reqllind lo ll&ke Ue exact aeanlnc <:lear, lhe !r1partUe  Agree■ent  •• a pracUcal workinc qa\n wa• aov ooapl•t•.  It eoon  became clear, hovenr, that th• ,u,Uoa of uactl.7 vha\ • • iaplied by 11•  .aderqtnc principle, •reciprocU7 in gold 4eallac•• Httlecl.  llffpap \ ~_- ..~ Federal Reserve Bank of St. Louis  wa• 'b7 ao ••aa• co11plehl.7  136 T.  tu Probl•• of leclprooU7 la Ool4 hallnp Ua4er the frlpar\11•  qre...nt.  a. lriparlll• in pl.a aealinc•.  th•  a7a\e■  Acr•--' Natecl apoa Ille ••lo prlac1pl• •t Nclprool'7 In •o•• napec\a it ll Nrall1ed.. llo\ la other• 11 reelrlclecl  ot aol4 replaUoa prenouaq ln effect ln lh• United Stat.••• and 11  ra1ae4 a naber of laaua collCenlng lhe w,q la which reclproct.t7 waa lo lae  detlae4. In car17inc ou\ \heir cc,14 tranaacUone in \he United Stal•• foreign goTern-  ••nt1 and cenlral banka were faced wi\h  a••'  of replalion1 which 4lrlde4 auch  tranaacUona la\o au 41fterent categoriea: 1.  Pvchaaea an4 aalea of cold tor \he General hn4 b7 the 1ed.eral XeHrTe  BaDka •• fiacal. acenl1, 1A acoorclanoe wlth pneral 1ta,e1Nnta of pollq la1u4 ))9 \he Secre\&J7 of the !reaa11r7 rilh \he appronl of th• Pre1ident (1,a\eMnt1 of lu11a17 and. •oTe■ber  31, 1934  ).J. 1936). !Ma• 1\at-nta  acqu.ia1,1on of gold  fro■  apecif1e4 condlliou were 2.  d4 1abaequntl7 atat-nta of Oc\ober 12  \ha Untied s,at••  pTe a ceneral lio•n•• tor the  fr•••llr7 proT14e4 certain  •I.  PurchaHa bJ lhe J'e4eral ••••rn  ~  of  •ew York •• fhcal acenl for the  thlltecl Slat•• of earaarked pl4 other than Uai\ecl Stat•• gol4 coin and p _l4 nce1Te4 b7 \he eanaarkiac cenlral baDk  fro■  noareaident allena of  \~ !  ~ own naUoaalU7 (Cleneral Aa\horlsaUon of ,he lecretaJ7 good 1mUl  tunher no Uc•.)  J. PvchaHt  and  •al•• of ,ol4 b7 ,u ~e4•ral hHn• Janka for  \be pa.rpo••  et HUllag 1a\enat1oaal balaac••• which wen pnrnecl 1" Ar\lol•· I~ of tu ProTlaloDal hplatloa1 111u4 11D4er \he Act. -•  Ool4 e&ru.rkiJIC tranaacUona canled oat b7 the ~ecleral  •••n• ._ of  •ew York IIDder 11a llc•n•• IY-11-1. 5.  Purchaa•• an4 aalea ot cold ~ \be ltab111sat1on hn4 carried out thro~ \he J'ederal laaene Jank ot • • York •• fiacal apnt. Federal Reserve Bank of St. Louis  1.37  6. - PvohaHa of  pl4 la llaa Vallecl ''•'•• \hat ooa.14 oal.T h  oarrlM  RI 11114er epeclal Uc•n•• fro• the !lreaaU17 crute4 a4er uttole Y, lecUoll J4 of Iha ProThloMl leplaUoaa, for \be lecre\&17 ut to N  pvpo••• ueu4 '-r  1Acoaal1leAI wt lh th• pural purpoH1 of  tu Ool4 1..." . Act.  fh••• ralher ooapltca\e4 411Uactloa1 were Ille locical outcoae of the aclalni1tratlon ot Section J of \ha Ool4 ••••ne Act which read: •fbe Secreta17 of ,u fNa•UJT ahall, '7 regulaUon1 1Hue4 hereunder, with lh• approftl of lh• Pn114en\, preecri 'be th• coau ,10111 under which cold aq be acqulre4 aD4 bel4, trauporte4, Mlted or tnah4, 1aporte4, exported or earaarad: (a) for 1n4ua\rlal, prote,eional, or arU1\lc i (b) b7 the J'ed.eral 1-nk• tor the purpoe• of aet\llDC la\ernatlonal \alanoea: and, (c) tor aucb olh•r pvpo••• a• la hl1 Jadpen\ are nol lDOou1a\en\ with the purpo••• of 1h11 Act. Gold ln UT fora aq be acqulN4, lranaporte4, Hlhcl or treated., imported, • %J>Orle4, or earsarke4 or ~14 ln c1a\od7 tor foreign or 40M1\1c account (except on Nhalf of \he Un1\e4 Stale1) 0D17 to lhe enent pera1Ue4 lq', u4 aubJect lo the cond1Uona preacribed in, or purauan\ lo, auch r•«u1.ation1 . •  u..  !here bein« ao parallel  •••rn  17 ■'••  ot pl4 replaUoa ln o\her countr1••• u.n;y  qu1Uon1 concernlq 1'1 operaUoa wre ra11ed e"Nn before the !rlpartlt• AgreeMnt an4 ln 4ehrainlDc the•• quea\iona the  h•••UJ7 gradua.117 ude  clear the  purpoH1 for whlch 11 waa willlq lo craal apeclal licenH• tor ,~ acquh1-  t1on ot gold la the United Sta\••· ~.  Q.u•Uoae laia•d bJ' lh• J'ecleral le1•n• Bank ot Wev Tork alld b7 J'orelp c.n,ral lank• Concern1nc lh• h•••U17'• Qold bgulaUODI Jetor• the !rlpar\1\e "1"•••nl1. Prior lo Septeaber 1936 the occaalo111 1n which the ~ed•ral •••~•  lallk  et ... Tork toad 1\ uce1aa17 lo a1k lhe  Iha 97•1• ot pl4 replalloll were iatrequat. CA.tu:  !rea1UJ7 on Federal Reserve Bank of St. Louis  t• ..- ,  '  !nae11r7 tor rulinp coa•ralac  U ha4 recel Te4 troa tu  ~  Narell aJ. 1934 a mad. laterpre1a,1on of 11• power,, mader  J.rticl• IT  138  of ,._ ·hnl•loaal legv.l.aUo••. lo aotulN pl4 tor ez:port ,o the ceatral Maka 1 ot pll ■tudard coutrl••• u4 ha4 Nea able ader thh aulhorU1 to taellUal• aa upon aon•at of pl4 lo hue• la .hpal u4 hp\ea'ber 193i. u4 to haa• 2 an4 'h• Ielherlan41 la Jebnar;r 1936. It ha4 alao e'b,alucl aa lat'oraal nlillC fro■  lh•  fr•••m'7  la Iona\er 1935 contlrmac 1\a n\borllJ' IID4er lh• •••  arUcl• of the Pronatoaal hculaUou lo ab a4ftBC•• to olher central baake acaia11 cc,14 earaarkect wttb t~• laak tor atab1111atlo•  pa.rpo•••·  !hia ra.linc  w a s ~ bef'ore co11pl71JIC wilh lh• requat ot th• •uo...i lank of Wicaragaa for an a4Tance ot $300,000 aplaat pld held \ eanrark la••• Tork.J  waa alao able, after couullat1o• wUh lh• hea1v,, lo•••  It  oa Jul.7 22, 1936  to accept from the leak of Teuaula about ~.000 1• lrUlah aonreipl to be 4el1Tencl 'bJ lh•  0aaraa,, !rut Co. ot ••• Tork, u4 to  hol4 thla 1014 un4er ear-  aarlc and aake a4Taac•• la 4ollara a«atn,t U. fhla lruaacUoa va.a part of a plan of  excbange control al that 11• proJ•c1•4 'bJ Iha pnnaent of Tenesula. and. ln ae-  ce41nc lo the propoaal th• 1e4eral leHn• IIIJlk of Wew Tork gold  ■  ■-4•  lt clear that the  be th• propert1 of lhe la\1oaal lank aa4 aubJecl lo Ua laatncUoaa  olllT, u4 that U waa earu.rke4 aubJect lo Iha lenaa of the federal leHrTe knk ' a lieena• whleh authori1ecl 1 Ct. page 2..3 2 •Qold--0.aeral--~tac an4 Selliq--0.aeral• tile. lletveell ~•brua.17 3 aad I 1' elt\a1M4 pl4 tro■ ,he General ~ tor .al• lo •arloua ••• Tork bank• tor ahipaent lo \he ~ of lranc• •ouUq la all to aboul $16,000,000 and to the Ietharlaad.1 llllJlk aaoutlq la all lo aboul $3,500,000. Ia oouection with theae alllpaenta U a4T1H4 the h•••VT tha, true• nn nllnc at fro■ 6.69-1/2 to 6.69-7/16 an4 pll4•r• at 61.76 lo 6s.7s- •·•· \•1• .,.14 a'lpOrl ~ta, troa  •-=s.n.  3 tlfraaeacUou--~lag  u4 lelllac Ool4 all4 lllTer--Ool4-•aUoaal laak et  Slearacu• file.  - tlfraaaaotioaa--lQT1ng and S.lllac Gold aa4 SllTer--Gold--lanlc of Teua•la• tlle (check). Federal Reserve Bank of St. Louis  139 the 1e4eral le••n• luk to llol4 all.Ch gc,14 lf 4eliTered to U frn abr..a after Jauarr 31, 1934 or 1• pur1uaoe of a lieu.. luucl b7 the leorela17 ~  \he fnaRJ7.  I\ alao poiahcl oat Iha\ 1 t vu aa,horise4  '1'  the lecn\a17  et  lh• !Na•IU'J' lo pvcba•• eol4 other than UaUe4 Sta\•• pl4 oola. llel4 a4er  eanark for toreip cutral bank• at \be price aa4 11114er 'h• coDditlou atip~lale4 ln the ProTillOMl 1ep1.a,1oaa.  1  ~'  In th• awmer of 1936 ~ cea\ral 'beak• 'began lo coaa14er the traaafer  of a part  ~  '  their NHrn1 lo the Uai\ed. Ital•• tor conTereion lalo gc,14 ud  laqulrl•• concenlnc \he MerlcaD regalatloa1 hcue •-rou. On 24,  1936 \he •orpa luk cable4 to  tu , ..eral  leHne Bank ot  Iev Tork aaldnc U to pvcha•• $5,000,000 ln gol4 for U aa4 ,o hold 1llCh eol4 uder aanu.rk, to which Iba llaak rapl1ed. Iha\ gold for earaark1nc could OJUJ" be obtained fro■ the United State• !reaa1U7 a4er llc•n•• la1ucl  l&rT wUh the appronl of the PrHldent.  b7 the Secre-  !he •orp1 lank replied b7 letter  ezplainlng 111 requat •• followa:  "You rill udera\aDd \hat the pvchaH of pl4 br u •• a ncular aote ll1ulnc laaU\aUon la qllll• a regular lru,acUon. Ve are at preaent holdinc cou1derable rHen•• of foreign exchan«e, and•• a aatter of banking pollq w wiah to la••-' part et lh•H NHM'ea in gold. If in future th• 4•1Wld for foreign H:change ahovl.d llake 1t dealrabla ,o tvn \hia eold u,o caah, we 1hoald aak 7ou ,o Hll the gold a«ain, Ole \ha aTan\ llaY ariH that we "AT wish ,o \ab the eold avq. Ve \hat \he praaent nculaUone of the gol4 aarket 1n the Ua1'e4 Stat ea are aot lnhnd.•4 to place U7 4lftl~ul Uu ln \he wa:r of regular aarket \J"&Daac\1ona of \h1a  pr••••••••  !hie letter vu referred lo  Mr. w,cbb•a4 'b7 lh• led.eral ••••"• •Dk of  Jew ?erk and on Septaber 17 Mr. lprolll ot the 1e4aral hHne lJuk replle4. Federal Reserve Bank of St. Louis  tloa la 4eta11  and  lRlly . .,  BQJing ud S.lllq Gold u4 lllnr - Gol4 - lol'VaT - 'lorpa  14o  . . . eol.4 p14 al a f1D4 price an4 lboH that 414 no\.  reqa1n4 tor lhe acqu1alllon of gol4  •• lone••  '7 central l,anlce  Wo apaclal 11eeaM • • of gol4 atandar4 oou\rl••  lhe1r exchanp1 were below go14 •%1>0r\ pola\1, aJMl u4er Anlcl• T.  Section 34 of \he  Ool4 Kegalatlo••• Iha leoretar7 ••• eapoverecl to crut 11oan•••  to other cenlral banlca tor purpo••• which were ao,. ln hla Jlldpeat, lnconaia\ent vUh \he purpoaea of ,he Oold. le1erft Act.  1  !ha 1e4eral le1ern  lta own llcan••• authorised to rece1Ta golcl een\ lo it ln the UnUed. S\ataa la •Uher of the abon wqa  fro■  lank••••  ader  abroad, or acquired  b7' 1ore1p Central 1luk9 or  goTarnaen\ 1 an4 lo expon auoh gol4 •1  O n ~ ' 27. 19.36 Kr.Warren L. Pleraoa of  ,u  bpon-Imporl lank aulllll1Ued  a cletailecl 1nqu1r, be hacl Noe1Te4 vh11• lJa lweclen troa \he STerlgea •1Jc1bank _,;.  --v,.  conceniq heil~b aerlcan eol4 regulaUona to the !rea111J72 an4 on Septeaber 15 the Swiaa h\ional lank a44r••••4 an urpat cable lnql1117  leaene le.Dk. up to that  u,  ID the 1e4eral  In oollfll'lliq \hla cable U a4Tlaa4 ,he federal lasene !au tbat  U■e.  except tor recent  lntenanUon in the exoban«e  ■laor  ■arke\  truuctloaa in poad1 and d.ollara.  tor 1\abllhaUoa purpo1e1 had bean ex-  cluai nly la hanch franc,, kt \bal lt ••• aov coaleaplaUng acqd.ring dollan  tor thla purpo1e.  U lherafore 1ateD4ed. to  1e4eral l•••n• :Bank of  aep  4ollara 1n gol4 4epo•U at the  •ew Tork ooaaequD\17 viehad to b.ov vha\her U  could aell U1 4ollar balance• vUh the 1e4eral laHna lank  again■\  1014. and  1f •• lfhelh•r the lederal hHn• lank could couen auch gol4 at &J3T tiH lalo to · 4ollan. It further withed to now whether U coul4 H ~ gold./lhe 1e4eral leHne 1 till• le\tar lt a TeJ"7 clear e%p01i\lon of th• a71tea of gol4 regulalloa. 2 8franaaotiona - Jhvinc and S.lllq Gol4 an4 Sllnr - Ool4 - lwdea - lnrip• llk1'bank• file. Federal Reserve Bank of St. Louis  Bulk al_ aa, \iM tor depo11\, •Uber fro• lwUaerlaa4, Parl • or LoD4on, aa4  wu,hu  ti would  be enU\led. to haa4 ner Ihle gold froa U1 4epoaU lA • •  Ten te etber Bank• of IHu, eyealulq lo the lank tor IatenaUoAal lelll•-  ...,,.1  fh•••  iaqulrle1 were reoe1Ted. 4aring  AgreeHn\ and  replle ■  Ko4it1caUon1 in the Tripartite  the !rlpartlt•  were aot ..a, aUl l&11aar"7 1937 when the aew 971tem  ot gold regulation va1 ••tabllahed. B.  ,u aego\iatlon of  '\....-  S7•t•• of Gold R•culation Inlroduced by the  Agree■ent.  The atandin« otter ot the United Stat•• !rea11U7 \o ••11 gold for export to central bank:1 which beacht and 1old p14 at a tlxec! price wheneTer their  •xchan«e• reached. gold ezporl point va• withdrawn 1-7 the Secret&r7'1 of October 12 and BoTa'ber 23, 1936.  1tate■enh  Banceforvard foreign central bank, could  acquire gold 1n the t1n11e4 Stat•• wl\hoat a apeclal llc•n•• onq when ac\1,ag a• ti1cal acant1 for their gonraen\1 or excbance 1tablllaation fmld1, or when guaranteed 'b7 IOT•rmaent, which had coAclued arranc-enh tor Nc1procal gold dealing• with the UaUe4 State a, an4 had been nued by the Secretaey •• haTine fulfilled the oon41 Uon1 of the 'frlparU t• the central bank of a count17 which  Acn..ent • !hh ••ant that  wa, a ...'ber of  t ·h e  !rlparti te A«r••••nt  U"-"'\-~~d•~  could aot,.acquire gold from the United Staha !rea1U1"7 and. haTe it earmarked free tor export  on  1t1 elffl acco•t at \he ~e4eral haene ~  ot ••• Tork  vi thoa\ a 1P•clal llcen1• from lhe fnaauJ"7 tor each tranaa6t ioa, and that eTen  wh• aotl11g •• flacal a«entt for 111  •xcb•nc•  1tablll1ation fund or 111 pnrn-  ha••  •••I ti oould not acgulre gold from the Un11e4 Stal•• !reaaur, and. ll earl •!ruaacllona - la7ing aa4 Selling Gold aa4 Silnr - Ool4 - Irita •atioul l!laJlk• file.  ). c-{ tT \ 1 1. - [: Federal Reserve Bank of St. Louis  l  aara4 alea1 U had pnn \wenl7-fov hove aot1c• of lhe ,ran..cUoa u  aall d which pl4 vu lo be earu.rlcecl ud. ha4  p&Hecl  the special accoula ••' ap u4er lh• operatiag !riparlU• .&cne••nt waa 11&4• effecUn. with u.  8  an-  lh• lrauacUoD lbro-,la  acr•-ata lhroach  which the  !hll latter rea\riclloa waa ln accord  upllf1catloa• 1D lu •1weat7-tov• hov,• of lhe leoretaJ"T'•  annoucaenta of October 12 u4 lo••ber 2J vhloh waa -4• a• \ lon1 raiaed bJ' the lwiaa la\lo~ luk.  a renU  of 1u•-  !hie apllflcaUoa waa •• followa:  ••••ael\her parl7 ahall be obllptecl \o earaark or releaae eol4 •• a reault of a transaction of which llollce baa not been cl Ten wl thin twent7-foar hou.ra.  •eh  par\7 will ban twent7-fov houra la which \o notify of excbanp acquired before receipt of nTOoatloa DOUce. lei ther par\7 ahall han a right lo pt pld for exchaqe acquired after recelpl or ci niac ot r••ocaUoa aollce. • 1  1 Letter of Deceaber 29, 1936 froa tu hderal BeHrn luk of lew York lo th• hlH laUonal Bank (Jba. l>ie\rloh'• StabllisaUoa--0.aeral--loTnber-Dece■ber 19)6 file). !hie apllfioatloa waa aa.4• after coaaul\atlon with the !reuUJT in re1ponae to a •uae•tloa fro■ the lwl•• htional ~ lo Iha ettec\ Iha\ each par\7 ehou14 the right to la1'1at• \ran..ctlona 11114er lh• tera• of lhe acr••••n\ clur1nc the lap•• of twn\7-fov hove after ,he receip\ of a NTooaUon aoUce. (!raaaac\loae-Bqiag an4 Sellinc Ool4 and 811Ter--0014-._,1oaal lank et lwiherlan4 flle). It w.1 •••iUecl to the other four -■eaber• central buk1 tor lhelr oonfiraaUoa oa ~•'bru.J7 10, 1937 (llr.Dletrich'• •0o14 • fll•) . !o lhi• \he Bank of Kn«laad replied la March tha\ U ha4 been la to11Ch vUh the . .Uleh hea1UJ7, and prefene4 DO tonal cbaDp in the acreeMDI. II ... uUafied with th• workiDC of the 1Jlforaal acrH11ent, and would not enter la\o a 411cua11on of the exact lalerpntatloa of ,he •1weat7-fov hove• claue, bein« ave that lf occaaioa ahoa.14 a fair agree■en\ would be reached. wtlh Ille ~e4•ral .... rn lank of Tork. C•r. l>lelr1ch'• •0o14• file). !he lelherlud• lank lMlt la lie npl.7 raiaed \he qu1Uon of lbe laclutoa within \be !rlpartlle .lcr•nnt of 4ollar exchange hel4 fer etablllaaUoa pvpoHa. Cf. pp. l Federal Reserve Bank of St. Louis  ba••  acr•••  l~(.  •w  an•••  -~  ftaa, when \he laak  lo  et ...,  tu  Bv1•• •auoaal lank"••nl lvo cable• \o lh• ~ed•ral  York oa Snu'ber  ,..'1, of  5. 1937 ~ • u to  eanark $11,000,000 la ao14  U1 accou.\, U va• 1Afone4 lhat lh• •ec1eral  •••n• luk  ooul.4 aot eo11pl7 becaue \he 4ollara acquired were no\ aoUfled to \ha wt. thi n tvea\7-fov hove ud placed ln the apeclal aocoul. fell ou\114• \he !ripar\11• Acree•nl all4 \he for a llceue for earaark  fro■  the traa..oUoa therefore  Bvi•• l'alloDal lank ...,  appl7  \he hcre\&r7 of \he !rea1UJ7, who 111U\ alao be  a.4Ti1ed •• to lh• purpo•• tor which the eanarklnc ••• 4edrecl and be cl••n  contirmaUon  ,11a, ,he earaarked eol4 would be th• property of \he Sri  Bank and not of a \hlrcl par\7.  l  t1D4er \he,... reatrlcUoa l\  H  •uonal  wa1 lleCHS&J7 tor  \he ••therl&Dda Bank to apply for a epeclal l1cea1• oa Deca'ber 1, 1937 la order to coDTert into gold $5(),000,000 vhlcb 1\ hal4 for the DGtch S\ab111sat1on 11m4,  2  Gaf.o an4 for the Swh1 IaUonal Jank act dao Iha , ... ln oowcUon vl\h a  •1-llar coaTerdon of P0,000,000 reg.uede4 oa Dec•hr 11, 1937.J 1 Mr. Dietrich' 1 •stablllsaUoa" file. !he Svl II hUoaal Bau replied \ha\ 1' had ha4 to lateneae la the exch&DC• urket 1,,- ••11111« trance am 'blvin« dollar• to the enen\ of $21 a11110D1 la order aot lo han the 4ollar elCChaqe fall further, \hat lh Zm-lch bruch volll.4 la1tnct the 7ederal leHne !&Ilk \o lrauf'er \he $21 ■lllio•• \o the Special J.ccoan\. \ha\ 'UT viahed $11 llilllon of ,Ma lo be ooDYerte4 into pl4, \hal lhe gold waa ,heir properly. an4 that the7 were a,«alll 1D\enenlq ln \be ezcbuge •rke\. to \his the 1e4eral Jank replied that thq ..,, • n - 4 ,he lranaacUoll to be IIDder th• TrlparUte and voulcl carry out ,u hi•• •uonal !ank'• 1aa\1"110Uona . .t. epec1al llcen•• ao\ appear \o ban been 1.Jlahted 11J)OD after th•" uplanaUolla. 2 !he Dutch h.nd w1ehed. \o ooaTert 'becav.a• at \bal 11• U 414 aot expec\ lo to Hll dollar• lo COllbal hict,.er dollar ral•• 1n .Allaterdaa. 8 '1'raaaac\1oaa ~in« and Selllq Gold and Sllnr - Oold - ••\herla.D4a 1aat• tile. 3 Ill 1ta cable requa,1nc th• llcenH, lh• 1¥1•• lank 414 aot 1peclt7 tor eat naaoa \be coDTerdoa ••• requalecl aor •'•'• lbal Ill• pl4 wu14 be \he properl7 of lhe laalltuUoa for whoH beaefl\ ,he eanark wa• oreatecl. Ille · llOUN wa1 granted onl.7 after \he Svi1a luk bad a4T1Hd Iha Pe4eral leHm laak et •ev York that \heir 4ollar \alanc•• with lhe Jederal leaern 'beloapl •llre~ lo th•• u4 toned \he 11&111 part ot \heir SqualhaUoa hn4.8!raaaac,1oa1 - lv.fiD« and Selling Oold and 111Ter - Ool4 - lwilserlam, hl•• •11ou.l Bau• tile. Federal Reserve Bank of St. Louis  Jl•H"•  4o••  ha••  144 111111• tile qal• of pl4 replalloa la etteol at,er lh• !rlparl11• tu cen\ral 1-Dk• of all oou\rl•• ut UM4 ••  hannc  ooapliecl  vi\h ,._ ooJMliUo•• coul.4 acquire pl4 troa '"- ~Ue4 Stat•• heanr,  •al.T  ucler a epeclal lloeD•• troa \he Seonlar7, lrre~cllT• of whe\her or ut \hq bough\ and aold gold a\ flza4 pri oe•.  Thu when \he ldqu ._, 1ou.le  4u llo7aa• 4• Yo1a&0alaTle cablecl \o lhe l9e4eral leHneku ot ••w Tork on. •oT..ber 13, 1936 la1tn.cllac U to b.,- $120.000 ln iol4 bara, charging their  accout, and hold \he \Ara ~•r earu.rk, \he rederal hHrTe that th• ..,,er  ■llat  'be taaa -i>  ~  replied  b7 lh• freaavl•• of Iha respec\1Ye goYen-  •n\a throqh 41ploMUc chauela.  1  llallarlT, vben \ha Buco cl• la Bepublica  Oriental 4•1 Uracua, wrote to \he ra4aral haem Jank of  ••w Tork on Dece•ber 4,  1936 adnainc thn that U ha4 a Haaou.l ab1Ul4anca ot clollara which U whhed lo connrt 1n,o gold ud earmark at the l9a4aral ••••n• lank ot Wev York pendinc a aeaaonal 4acllne la ezporte.  th••• 4ollara  aDd  lnqulriac whe\her lf it 41d conTert  lJ:ato gold 11 would n.b1equnU.7 encounter legal 41ff1cul.Uet ln  freel.7 aoY1n« the gold, U waa aclTiHd \hat pld ooul.4 onl.7 be aade aTailable to U tor earaark1n& under a apeclal UcanH.  !he l9ecleral leHna Jank, howeYer,  called attention \o \he in'Yitation to other coutriea to Join Iha !ripartlte AgreeMnt and auggealed conTarutlou be\veen the \wo !reaaurle1 on the qaeatlon  of reciprocal d.eal1nca ln eold \hroa-gh lhe U~an Legation in Vaahincton.  If the general question were 4eo1ded. ,hroucb thla channel, Iha 1ecleral 2 lallk 001114 411cu1 de\ail1 with lhea.  l•••r••  whether •aeabera• of the hl~ 1 M yreeaen, or nol, coa.14 acqllire gold in lhe Uni t94 Stab• from  Kr. Dietrich'• •Qold• tile. 2 Ibid.. Federal Reserve Bank of St. Louis  aovce ■  ~~_,_  h•••1U7 •al.7 u4er ,. at: • 11ce•••. Ia \Ille Jiabaud. lo lbe 7e4eral l•••n• Jank of Jew Tort lJI  olher tlaa lh~ t1n1t•4 State• ._. Nepeo\ the licena•  '•hurT 19311 •• ua•D4•4 to laa•J"J' 1,  1936 (lt-11-1) lo lllpon, upon ...  hol4 aol4 a.mer earaark for fore1p oen.lral lluk• r-1uc1 uchanpd  '7 lhe  !riparllle Acrenen,.  C.  QlwallODI Coacen1DC ..raarke4 Ool4 lalae4 b7 lorelp Central knk• Uter \he !rlpartl\e Acr•••al.  On Deceaber 10,  1936 the  Sviu ••Uonal lank a4Yiaed lh• hcleral KeHne  :Bank of lev Tork of 11• iatenllon to 1hlp )00 a1lllon 8"11• trance 1a pld lo  th•• for earmark. and laqo.1re4 whether lh• 1e4eral lleaene lank would enntu.a.117 1 be willinc lo take oTer lh• whole or parl of Ihle gol4 fro■ \hell a«alnat the 4epoail of an equal aaout of pl4 for \he aocoat of \he 7ederal ••••rTe knk  vlth another central bank co11pl7lac w1\h lb• coadllloaa of th• !ripar\11• Jgn ...nt.  lor 1h11 prlT1lq• lbe SwiH lat1oul lank vaa wlllinc to pq a  pr•la to be ucotlale4, and aaked the 1e4eral leaern Ink lo la41cate at  which central bank  1\  would be vUUnc to accepl each pl4.  2  !o lh1• the 1ec!eral  JleHn• !ank replied that the propoaal ••• •aot 1v.Ua\1e• l»ut \hat if the 8w1H  laUonal Bank ahoul4 ur~all.7 require clollara, lhe 1e4eral llaHne knk, ••  flacal a.cent of \he Ulllte4 Stat••• woul.4  n,. ,old actll&l}T placed oa  1,oari  a  ,, aa111q for 1.,, Tork on ncelpl of a cable \o Iha.I effect. and would 411cuaa ,he 4eta111 aD4 price U \be Swiaa laUoD&l. Bank were lnlereated.  !he  h111 •uoD&l Baak replied that U woul.4 occaaloDalq mer, lo Ihle otter .  aD4 ill4loale4 that \he gol4 would be placed Oil ahip'IN,arcl la lel.J1a. 3 1 !he •'bl• r•a4• 1 \o place •' our 418l)Oaal vl\h 70u the whole or part .t Ihle aolt.• 2 If lhla wre, • .c. \he laUonal Jank ot lelci•, the Swiu la\lonal laak oov.14 o'blaln. 4ollar1 ln Jew Tork bJ' aeu1 of a P-fi5Jw of pl4 ln lel«la. 3 Kr. Dietrich'• •stablllsa\lon - O.neral - loT.-ho. 19361 tlle. fhla corr••pondenc• 11 not ln \he Sv1•• latloD&l knk flle. Federal Reserve Bank of St. Louis  Al ~~. •n4 of l>ecaber lh• h4eral ••••rn Jule of • .,, Tork recelTN 11•  tlnt fefllal requ1t1 for lh• tranater of eal'llarke4 cc,14 u4er lh• aew ~ ,1ou. flleH wr• for a lrlaJl&1ll,ar tran,ter of 1'I 'bar• ftlud a\ about $600,000 tr011 the earaarke4 gol4 of the Ink for IaleraaUozaal SeUl••a\1 to the •auonal lJaDk ot  Bank.  hl.«1• and troa them lo the eanaark of the Sw111 kllonal  !be 7ederal ha•n• lank adTiHd all part1•• that U a.ot act with-  out a rulin« from the freaaury and. ,1ie whole 11athr wa1 referred. ,o \he Secret&r7, vi th the illformaUoa that part of \he pl4 ha4 been hel4 uder eanark for the :Banlc for InterutioD&l Se\tl•••'• 1lace 1932 aD4 \bat part of it had ••n  ahlpped to lev York tor eanaarlc la Oclo\er  1936. Oa  authorised the tranaacUon, ba.t ala\ed thal thla 1 general of th• DeparlMnl. 0a Jaa11a17 leaeJ"Te Bank  5, 1937 the Snrlce•  ■u\  Dece■ber  29  the Secnta17  aot be conaldered •• a  lllbbaak oace aore cabled. lo the 1ederal  of lev Tork aak1ng U lo  coaf1r■  that \he •1t1bank could 1Ull,  without lic•n••• haTe ,old earaarked la In Tork lrreapectiTe of whether 111ported  b7 11 to the Unite4 State• or bou«ht b7 11 fros other cell\ral baDka ha.Ti~ gold earaarked with the 7ederal leaene.  .After 4hcua1nc the aat ter w1'h the  '?rea1ury the 19e4eral haem llu.k of lev Tork replle4 that U wa, 11c•n••'1 to ezport gold rece1Ted 'b7 11  fro■  abroad. 'bll\ lbal .,,1th respect lo gold \hereto-  fore earaarke4 'bJ' 111 &114 boqhl b7 701& U will N uce•8&J7 tor 7011 to approach ua vheneTer 7ou haT• a concrete caH and. ~Te u \he fach \hereof' and we •hall the aubaU the caH lo \he frea1urz: Depart■en\ for 4eter■ laaUoa.•.  l.Mr. Dlelrleh'• •stabilisation - Chural - •n.-Dec. 1936•  2  f'lle. .. 2 !lie lwrlpa Kikabaak coaUaud., bowner. to 'be rep.r4e4 •• a •goo4 pnei,eo,• fer· -'-rah1p in 'h• fr1parU\e ~ • n \ , a ooaa14eraUon which•• la \he 111M of lhe hea1V7 when U cranlec1 U, 1• 1e'bnarJ 1938, a llceaH ioo4 tor hp Malha tor Iha ■oT-nl of pert of lta pl4 to ••v Tork b7 Ma.Ill of lrautera fro■ lh• eanarkecl accoah of other oeDtral bank• or \he Bank for Iaternatloaal Seltle■en\1 (frea1lll7 ■e■oran4• of 1ebra&J7 16, 1938). -tran1actlon1-Bu,-ing and Sellinc Gold u4 111Ter--Gol4--h•r1p1 Bikabank• folder. Federal Reserve Bank of St. Louis  Oa_Jana17 11 Iha ••\harlan41 laalc 1aqu1Ncl 1,J' oabla what:ta.r, it U aol4 pert  flt,. eol4 held . , Iha\ UM adar eanarlc wl\h Iha 1e4aral ...." . luk  of ... Yerk lo the Swlea  •uonal  of \he lw1H •auo11al Baalc.  lluk, the pld woa.14 be a\ the free 4lepual  t'hla 111411117 aleo ••• a11ba1Ua4 lo lbe !raaa1117  an4 the following repl.7 aaa\ '7 \he J'eclaral •Hna laak ot  •ew Yorks  •JlaTiDC  been authorised to clo ao b7 Iha Saore\&27 ot lh• tr.. aUJ7, we repq in \he af'tt rmati n. • 1  llD&lq a detailed npl.7 lo \ha lnqu1r1aa ot the lwlaa latlonal Bank of S.pteaber  15. 1936 coacenlnc the Aaer1C&A  Mr. larr11on ot the  cc,14 raplatioa1 ••• ••'  'b7  J'aderal JlaHna laak of lew York on Janaa17 13, 19)7.  In  one ot the prellllill&r'J' draft• ot lhla laller lb• 41al1ncllon vaa poln\ecl out baheen torelgn central bank• acUzig for lhelr wn account in acqu1r1n,; gold  in the United Sta\ea (requiring a liceaH) am central bank• acting •• fhcal a«en\1 tor ,ha •~change 1tablli1a\lon fad.a or CoTeraent1 of countrlea aaaber1  ot \he !ripartita ~enant.  In the final letter, boweTar, th• 1nqu117 of the  Swba laUonal lank •Woulcl 1 t be po1si bl• to Hll 70v. our dollar be.lane•• w1 th •ew Tork bank• a«ainat eold• waa aiapl.7 auvared •• tollova:  I u right to aHuae \bal \hla quaUoa ao loac•r Hntad  Oil  ha ■  •1 lake U that  \he atgaitican.ce U pre-  Sept•ber 15, and that Iha oparaUoDa which proap\ad it will hence-  forward 'be oolld.achd  b7 70v Hab111saUoa ~ • . !he Swiu  •could we sand 7ou gol4 at  a1q  tlae tor depoe11 either  fro■  lt&Dk'• laqv.117:  &w1\1arlaad, fros  Parle. or troa LoA4oa and. wov.ld \be SviH laUoaal lank be an\Ulecl \o band  onr pl4  fro■  lhelr depo1U ill law York to o\ 1-nk• of 111u, •••alaal.X,, _  le Ille laak tor InlernaUoaal 8aUl•••IIT 1  ••  annen4 •• to the fin\  ,-n  ln \ha attlnaU'n and a, \o the HCOD4 par\ •• tollow1: 1 .l1 z:ou ao 4oa)\ l !ran1actio1a1, BQTiDg and Selling Qold and S11Ter - Oold - le\herland.1 !anlc, tile. Federal Reserve Bank of St. Louis  148  kuw, 1M fna1V7 baa pem1\te4 tbe lruaf•r et pl4 u14 'b7 1h11 bank fer \be aoooal of the lank for Iatenaa\loaal 1e,,1..eat1 ,o the aocoul ot Ille ~ - •uonal• 4• Belclqu, aa4 lblreaf\er to lh• accoul of \he ._uo..i !ank wilh lhe 1e4eral ••••"• laDk of •n Tork.  1"1••  !he 'l'rea11117 ba•  a4T1eed \hh bank thal aach 4eclalon 1hould DOI N laterpnte4 •• a geaeral  nJ.tnc of the J>epar,Hnl. aor •• u uner lo diT general laq1l117 on the 1'1b-  J•ct.  !ha foregoing. uaawhile, vou.14 aol 4•bar \be 8v1H laUoaal lank froa  oeuiplq gol4 lo the 1ederal l•Hn• laDk of •ev Tork to be placed 41rectq  under eanu.rk for another ceatral bank or \he llaDk tor Ia,ernatlonal Se\tl••nta.• fh• let,er •• a whole ooulit'11e4 a careful.17 prepared. coD4enaed  1WR-  11a17 of \he ~r1can 171\n of plcl nplaUoa. 1 D.  .Acre••'  "7 th• 'fr•••V7 lo Iha  rr••  !raaaf'•r of la.rllarlced Gold be-  IT-18-1. It had becou lacrea11zacl.T clear •• a rHa1' of thee• lDlerchance• tha\  th• restriction• ia tore• oa lh• \raaater of plcl eanu.rke4 al \he 1e4eral Re" " • lank of ..,, Tork wen felt bJ forelp cn,ral lMmk• lo be a hind.ranee la the eucu\1on of their ezchange atfb111sa\loa tuctloa1.  11ac• •11.Ch tran•f•r•  were freeq al.loved by \be cenlral be.aka of ooa\rlea ••1-ra of \he frlparU t• Acr••••nt, the quation  wa1  alao ra1ae4 •• lo whether \U7 were con1l1ten\, ••  applied lo 1uch central bank,, vilh \he priaclple of reclproeit7 ot gol4 4eal1np on which \he  .t.cre-a, rede4.  fhe fr•••Ul7 ,uretor• prepared lo uke  a  pMral acr•uent vUh Iha parUelpatiac treaaurl•• oa Ihle polnt.  0a 1.-.:q 27. 1937 llr. ~lor la behalf of the hea1UJ7 ul1Tere4  ~  tollovty DOI• ,o lhe Jllaanclal Attach•• u4 other NJ)NHataUT•• ot ,_ fl~  1 •tranaac\ioa1--IQT1ng and Sellin« Gold and SilTer--Oold--Svit1arland--SWi11 ••11onal Jank• tile. Federal Reserve Bank of St. Louis  oo.,.nuac  eoatriea:  · -the Val\ed. ltat•• hean17 11 prepare4, oa lhe  ••la of nol~noltF,  h adllerl•• \raa1fer1 of earaark• of gol4 \etwNn the trea1arl••• .,_,,,...  ..aallaa\ltn or a\ablllsatloa f1UMl1, er flaoal aceacle1, referred. \o la lbe momac~nt1 of Iha lecrelaJ7 of lh• !na1UJ7 ot Oclober 13 u4 lnaNr 24, 1936, •• well •• ,u central 'baak1 of 111eh ooatri••. Thh authorlt7 wul4 \e rnoaable at U7 llM wi\h respect lo a,q \raaafer DOI fv.117 ooaauaaaled at U■e. lolh "1\h reaped \o eanark aD4 to truafer1 of ear■ark1, \he authorl\7 would ezlea4, ill accordance with pre1ent reggla\lou of the hderal le1en• lank of •ev Tork, oAl.7 \o auch gol4 ••lathe propert7 of the laa\ltullon tor wea• 'benetlt \he earaark 11 created. !he Uni led. 8'at•• frea1UJ7 wov.14 appreciate belnc a4Tiee4 a• to the aUUude of \ha eo•eraenh aa4 la1UtuUoaa coaeeraed on the foreeolnc propoaal. • 1 '!he rlewa of the 1ahre1\ed. eo••nmellh were 101UMl.ed eut lhroa«h 41ploaatic channela, 2 and fanrable npliea nre recelTed, \hat of Great lri\atn being contained in the followinc • Jle■olre• 4.ated lebrQ&lT  91111 MaJ••'7' •  Oonrn■ent  1A lh• 1JnUe4  26, 1937:  nac40■  thank the tJAUed  Stat•• !rea1ur"7 tor \heir 8'ate■ent and ban the \onour to iatorm them  that in correapondin« clrcu1tanc•• it 11 \he pnctlc• of the UAited authori Uea to \ranater earaarked eold w1 \hout con41 Uons or reatricUona.  nnc40■  11• KaJ•1t7' • QoTenaent welcou lbe alal•ut and. the United Stat•• freaaury would be glad of a117 eo■-enta they wi1h to off er. M a paeral principle Iii NaJeat7' • Oonnaent reprcl U a, de1irable th.a\ cc,14 ahould be able lo ohaqe b.u4• freel.7 alld accordingly in their Tiew 11 would be helpful lt \he an proceclar• were eztended to countr1•• other than ,ho•• Mnl1olW4 la \he October ud loT-■ber announceunt1. In parUeular l h NaJe ■ '7'1 Gonrmaeat • ~ • ' that U would be 4Hirable that ta-.ourabl• treat■ent ahou.14 be enell4ed to \he Jank for International SeUlnenh •• reprch deal in«• la gold. 3  DI!ISB DJWISY WAIBIIG!OI, l>. C.  1ebrurz 26\h,  1937. 1 4  1 8!raaaactlon1--IUTlDC an4 Sell1q Gold and S11Ter--Oold--Geural• flle. hcN\&J7 Bull to Mr. BuUerwor\h a\ \he United Stahl :labaaq la l.eMOa. llr. Dietrich'• •stabilisation• file. ) IN ,..e-¼Je.~ '. 1-C; - and Sellin« Oold u4 lilTer--Oold--Oreat !ritala-Buk of Jn«laJld• file.  , a.u. et Federal Reserve Bank of St. Louis  150  •o,  ltllla Tin wu ao, wolq aocepW '7 lb• fna•UJ7• oal.7 • • Ille laolanoa et •acul...aber• coalrl•• aot ooaleaplate4, \ut lrusfera lo all frea Ille ean.rk of the lank for Iaterulioaal lettl-•t• ooat1a-4 lo N n'J•ot lo llceue. file rather aharp 4lff•r•ac• la pelnt of new la lll41ca\ed b7 the follow1DC lalerOUJlp of oabl•• la Deo••r 1931: I  r .I.I. - Deoea'ber 2. •• ahoul4 4ellre lo lranafer fro■ eol4 eanaracl our own accout wilh 7011. appronaateq klloa 500 to accoat o f ~ of J:nclall4. lboul.4 appreolal• lf 7ou ooul4 l•e41at•l7 approach u. I. fnaa1U7 to oblalD llceDM oa behalf.  1. I. I.S. to  2.  Y.Jl.B. lo lulc of 'lncJaa4 - Deca\er 2. I.I.I. baa nqu1lecl ua to traufer lo 70v aecoal approx111at•17 500 k11oa gold. Jefor• 0011pl.J1.n« we ahall la&Te lo obtala a nllnc fro■ 1J. I. '"-•U17 Depart..., lo tac111PleaH ~l• 7our laatr'GCtloaa repr41nc 4epodl ao that we ■q pre1enl coaple\e 4e\alla \o lh•  ,a,e.  '"-•U7•  ]. lank of 'lqland to r.1.1.- I>ec••r 2. Arrance to take o••r 500 kilo• pl4 ln Tork fro■ I.I .s. Ihle lraa1acUon it the flret of a ••rl•• 1nlen4ecl lo aa11at la ov operaUona. It then are arq obJecUona ••  •ew  would pnfer cancellln«.  4. fr•a•ur, to r.11.1. - Decaber 5.  In 1h11 ca•• 7ou are her•b;f au\horiled to ■ake tranafer reque1ted.- - - - - Decialon ahoul.4 not be interpreted •• a pneral rul1DC of lh• l)epan•nl. Federal Reserve Bank of St. Louis  151 Oa-Jlareh 22.  la Tl•  ~  1937 the Secre,ar,- obtalu4 lh• appronl of lhe Pree14eal,  lhe•• faTOrabl• reepoue1, tor the ha1111Aee of a -  llceaae le  \he Jle4eral . . ."• laak of ••v York cl•iac th• tha nece11a17 authorU7 le 1 ll&ke ,ru1ter1 of pl4 earaark• in accor4allc• wlth lhe•• arranc-ent1. A uv llc•nee IY-lS-1, 4atec1. Jlarcll 2~. J'ebru.&J7 5. 1934 waa lbell 1aeu4. •Jederal ie1ene Baat ot (Iw of llceuee)  •n  1937, 111pene41ac llceue lt-lS-1  u, l•n •• ••  datecl  tollov1: Karch 24, 1937 (Dal• of bau)  York  ••v York, ••• TOJ'k (Addre•• of llcen•••> Sira: 1. You are herebJ' llcenHd to lrauporl, laport, IMl\ and treat, and export eol4 DOY held b7 7ou eanaark tor azq foreign goTeraen\ or foreign central bank or 1ent \o 7ou at\er lu11aJ7 JO, 1934 from abroad 'b7 ant torelp goTenment or fonicn central 'baak, or deliTeNd \o 7ou tor account of &Jl.7 forelp coTerma.n, or foreign cea\ral 'baak ll7 \he United State, or pur111aAI to a llc•n•• granted )T the lecrel&r7 of th• frea1UJ7, an4 to -.nark auch eold aDd ,o hold 11 ln ca.1\°'7 for 07 foreign pTenunt or foreign ceDlral bank. Ool4 rec•1••4 b7 7ou for -.rmark hereafter auat be th• propert7 of \he lal\1\ation tor beaefll the earaark la created.  lfbo••  2. Tov. are allo henbJ' Uc•a•e4 lo lrauf•r eanarka of pl4 between the tr1aaurl••• ezchaqe equalisation or au.blllsalion f11D41. or fl ■ cal acenc1•• of ooml\r1••• or oentral banka, •• aq be de1ignated troa U• \o \1•• b7 the Sdrela17 of \he !rea1U7. Gol4 tranaferre4 'b7 7ou here\1D4er ■u1\ be theproper\7 of lb• 1a,,1,u11oa for whoa• benefit the earaark ha• \heretofore been crealed. and au\ becoae ,he proper\7 of th• 101\ilu\ioa for who1e benefit ,ha e&J"ll&rk 1• lo 'be created. !he phraH •torelp central bank• la uaecl herela to 4enoh aq forelp bank perfora1Jl8 \be fucUoaa of• central bank, 1acla41n« the Bank for  International S•ttlau\a. leporh of ,he 41spollUoa of the plcl ~r•ln llcenaecl lo 'be held lae ud.• on Jorm Hll-11.  ■hall  !Illa 11cea1e 1• ao\ lranaterabl• and 11 111\Jec\ lo the proTialoaa ef Ille .. 0.14 kt of 1934 u4 \he nplaUoaa baud. \bereuder.  •Hn•  11!rueac\1o••--Blvin« aa4 Sellin« Gold u4 811Ter--Gol4--0.neral• file. Federal Reserve Bank of St. Louis  152  tide llcen•• aaper1eua llcenH •o. n-lS-1 o• ron !GL-11, 1Hu4 I• ~•'bnar7 5, 1934, and uu4e4 o• Kuch 23, 1931'.  70• u  Ienecl wllh the approftl of lh• Pna14ea\:  Jr.  Kemz Norpn\hau, lecre\&17 of lh• !reaaUJ7  (Sipe4)  !hie llcena• aQ" be lera1ule4, rnolcad. or II041f1e4 a\ &111'• ln the 4lacret1on of the Secrelar;r of the freaaV7.•  In hl• letter of truailtal lo lhe 1e4eral ••••"• :lank of •ew York lhe 8ecret&r7 4ellpate4 Great lrl\ala, haace, lwUserlaDd., Jelcla and the  ••therlancla pvnaat lo paragraph 2.l  !be \eraa of Ihle llcenae drew a aharp 41al1ac\1oa 'between •Membera• an4 'aon-■eabera• of the  !rlparlUe  Acr••••' v1,h  respect to the traufer of  earaarked gol4, and 'b7 req111rlnc that lh• pl4 truaterre4 •  I~• proper\7  al all U•• of lhe lna\Ua.Uon for which U ••• eanarbct prori4e4 a aafegaard aplnat &D7  auch lru1tera hlng carrie4 oul 1D41reclq tor lhlrd. partl••  or print• peraona.  Prior lo \he hipartile .&cre...n\ 11 had not been the  general pracUc• of ,he Jlederal leaene Bank of  •ew York to laqllire of Ua  central bankinc correapond.enl• •• \o lbe ownerahlp of pl4 earaa.rud. tor them, and \he 1ederal leHne Jank waa re_ l uc\an\ to eanaark gold tor goTernaeat,. 2  In order lo aafeguard \he lanJc ln \h11 parUC11lar \he 'frea1V7 ••nt, with the licenH UNlt. the leUer ot l'\1&l"&lll••:  l1nlll fvther aoUc• 7ou are a4Tiae4 \hat 1h11 Deparbent will ao\ con114er that 7ou haTe 1acurre4 &JJ7 llablllt7 aa4er aa14 llcen1e it 7ou rel.7 on the correelne11 of repre1enta,1on1 of a tor•icn goTeruen\ or a torelp oalral \&Ilk (laclwlinc the lank tor IahrnaUoaal leUle■n,a) tbal parllcvlar gold la th• propert7 ot tu ln8'1tuUon tor who•• •••tu tbe ear■ark of au$ gold la. or 11 to be. cna\N, uleH 7ou ban naaoa lo belteTe Iha col4 11 the properl7 ot aaother ln1t11u,1on.•J 1  1 "haaaactloa1 - ~inc u4 S.llinc Qol4 aD4 lilnr - Ool4 - Oaeral 1 tile .. 2 !'b.11 11 brouchl out la a of qu9'1olll conceninc \he earu.rkiq procedure b7 C.T.O. in lhe !rea•V7 Deparl•at ln April 1937.--•tran1aclion•-~1nc and Selling Gold and S11Ter--Ool4--General• tile. J Ibid. Federal Reserve Bank of St. Louis  ••r1••  153 I  1'1ateq \bereatter  \he  7ecleral ••••rn luJc ot •e"' Tork 'bepD lo  iarepan a ceneral letter lo lh co•apon4n,, attoa4 1taUnc the leru aal ooll41Uoaa ao••nlac their accoma\1 u4 aabll1 He4 lo lhe frea1V7 lh• pro-  lo reach an  acr'H■eat  a.a to the exaol wr41nc of 1h11 paracraph, the princi-  pal pola\a ot 411cu1lon NTOlTiDC aro11114 the 1u111on of whether lh• lntor~ aaUon co••rin« ovurahip wa, \o be repnaeate4 a, beizac aade at tbe requ1t  of the fr•a•UJ7 or aa a requlrnent ot th• 7ecleral leHne lank l\Hlf. 1 In the cour1e ot thia 4lacua1lon the entire •t•na• and cond1\1oaa• leller waa ahovn to the !Na•VT tor Ua co. .nt.  earmarkinc paracraph  n.• fillall.7  It wa, not uUl  acree4 to.  •on■'ber  J that the  !he •tera, and eon41Uona• let-  ten were aent out on December l, but copi•• were not Hnt to the 'frea1UJ7 ~.,_,,l-  uUl the7 bad been MM 1 1n order that \he  fr•••1U'7 wot.114 not be  111 a poa1-  tlon to ban to pa•• on auch lettera.• 2 !he paracraph on gold earaarkin« a• flaall.7 aent out read a, follow,: ~l"llaJ"kiy of Gold  Ye hold a lic•n•• 1asu4 '7 \he Secn\a.17 of lh• !rea1UJ7 of the United Sta\ee, puraQ&D\ to \he ProThioaal legalaUon.a iHu4 1Ul4er the Gold leHffe Act of 1934, to hol4 uder earaark. a.D4 lo export, gold. nov 10 held  b7 ua tor  &!IT  foreign goTernaent or foreip central baak, or hereafter aent  to u from abroad b7 &IO' foreign eo••nua•n\ or foreign oeatral baak. or d.eli'Yencl \o u tor accou, of aD7 foreign eo•ermaent or foreign central bank b7 th• Ualh4 Hat•• or pvau.nt lo a llo•n•• aranhd b7' the Secret&17 of the frea•vr. Vi thin the aalhori 17 of, aa4 aubJect to \he l•n• of our 11c••••• we "111 upon 7our lnl\r11eUoaa eanark an4 hold tor 7ou.r account, 1n41T14u.al17 or a• fiacal ~at, aa4 1ubJeo\ lo 7011.r las\rucUona. 1014 which la 70v proper\7 or the proper'7 of 70v pnruent or of it• ezthe aaa• faclllll•• · aallsatioa or atab111sat1oa fllDd., ron41 lor tu ,etall1 of \hi• prolonpd 411CU11lon, ••• •Tra.naact1one--JQ11ac aad. lellbc Gold aa4 SilYer--0014--0.aeral • fll•. U 11 aot perfectly olear troa Ille flle, howner, whether \he nqulr•••t waa ln the flrat ln1\aaoe ef  ••••rn  Jiau orlgta. fna•V7 or 1e4eral 2 At the requeat of Mr. Opper. lhtao for the 711••• •ne■ber 10, 1937. •fr••actlon1--BU1"ing and Selling Gold and 811Ter--Gold--Oeneral• tile. Federal Reserve Bank of St. Louis  fer Ila• eutoq of euch pl4 •• we pNTl4• for lbe ou\oq of ov wn alallar proper\7, kl 'b•70114 that ao reapoaa11-11U7. 11 will le 111Mlerl\oo4 that pl4 wblch 701& requa, u lo eanark h 70v propen7 10• aan .. u thal U 11 lh• propert7 of 70v eo••nmn\ or of Ua ezohuce eqaalisatlo• or atablllsatlo• taad. an4 la nch nen\ 7ou lhoul.4 requal u to earaark 1\ 1A a epecial sol4 accoaal la 70v .... w11h a 411\lapiahlq Q"ll'bol, ••• for exaaple, • •. aa4 a4•11• u. lf 70u not preriouaq 4ou ao, thal U will - be a.a4erlloo4 u:r eol4 which 7011 aq r•qu1\ u \o eanaark ta aach apeclal plcl accoul \eloaca lo 7our ao••rmaen, or Ua •xobance t11aallaaUoa er aia'b1llsaUon r..a, •• lh• IIA7 1-e.•  ••••he  ha••  ca•• Federal Reserve Bank of St. Louis  llllle••  ,iaa,  155 •.. l'vlher QuaU011• lalee4 1q  tu  ••lherlaa4a  tu ()peraUoa of Ille h1putlle jp....  ».u •1a11q '•  a, .  .& hrther ••rl•• of lllportaat 1u1Uoa1 growlag 0111 of lhe pracUoal  worklaca of \he !ripa.~tll• Jcn••nt •• u  ezchaa«e atabillsalloa •chul•  '-..,-Lo  -WN  ra1ae4 4vinc  1.  1937 1rr  \he ••th•rla4• -.U.  Propoaal to Incl•• Dollar Aaae\a Bel4 tor Ha'blllsaUoa Pv-  po••• la \he Scope ot lhe frlputl\e Jcn•••t. 0a 7ebrUJ7  26, 1937  the •turlaa4• • • accepted the •up11t1ca-  Uon1• of the origtaal vorklq acr•-nt woracl o•t 1-t•••n the h1•• •auoul 1 lank aD4 the lederal h""• luk of • • Tork , u4er which paracraph f oar of  Ua 11114eratan41ac wUh the 7e4eral •••ne luk ot  •ew York wa1 - • • to rea4:  •».  le4erlaa4ache ».nlc u4 le4eral le1en• Bau of..,, Tork will ad.Ti•• each otlwr 4all.T of uq truaacUon• •• a realllt of which pl4 le ,o be eanaarke4 or releaae4 u4er \hl1 anuceHat; aD4 •Uher pan7 uall be e'bllphc! a4er thl• arranceanl to earaark or rel•a.. p14 •• a reault of uq truaacUoa of which all.Ch aoUc• •hall aot ct·ren wUUa 24 hove• 2  ha•• 'be••  It ll&de, howner,  ,1w  follovi-c •~•Uon for a 1Ull tvther aaen4.Mnt:  •coa114eratloaa of a lechlllcal aalv• llal' aake lt a4riaabl• for our Jank, la 11•• eea lbe 4ollar la flna 1• \ena1 et p114•r• •• vell aa la l1M1 when \he p114er 11 flna 111 leraa of 4ollara, lo •lataia a workinc baluc• 011 ov 4ollar accoal with 7ovHlTea or wUh lhe Charant7 !rut Coapa117 of Sew Tork or aao,ur S.V Tork oorn1p<>n4ent. If tlw ato~uat1oae4 para,crapb fov •• 11 rea4• at preaeat 1• laterprete4 etrlctq, the ca•• aq arlM where euch a 1-lanc• caanot be oollflrle4 1a,o p14 afl•r receipt of a ao\lce of reTocalloa of the arrancennt b7 70v laJlk or b7 hi ,.a heaa1117. •• wo1114 therefore, wbelher 7ou. ooa.14 acre• lo 11:w 1acl•e1011 ot each bal.8.JlC• or 'balaac•• u4er th• prlnlec•• of paracraph two of the arraacnent. 11p a certain aazlaa which w naeet 11ao1ll.4 • flxecl tentaUnq al fln llu4N4 thouaa4 4ollar• la \be accncat•. ConerHq, w w1114 \e "1ll1ac lo allow a correepoadiag exoepUoa to paracraph fov fer as, balaac•• which 70v Jank ..,- hol4 ta aeterd.aa, ap to o•• ld.lllon pil4ere 111 aai:•pt•. • ·  'h•  a•k.  '°  l  lee,_.., \t{ / -;...-  'ha  2 1!raD.aaction1, ~iag aD4 S.lltnc Gold all4 11lftr--Gol4--Setherl&ll41--••4•rlaJa4ache l&Dk1 file.  3 Ibid. Paracraph 2 proTl4e4 tor 'by  ot  the coneraioa lato eol4 of 4ollar1 acquired the Datch lqulisaUoa hB4 lJl accord.aaoe vUh llr. Jlorpnthaa. • 1 etat••nta October 12 an4 •o•••'ber 23, 1936. Federal Reserve Bank of St. Louis  156 After ooaa111Uac \he 1Naa1117 Ule h4eral leNrn . _ of Sew York rapllel •  j.prll  15. 1937 ,_, \Illa propoeal coul.4 _, ...  HCOMllecl wlQ  ••lal latut &114 pupoH of Ill• arruceael• ••l•r•4 llalo pv...., lo lhe N-calle4 hlparUle .tcr••••t• • polallq nl Iha\ the MW paracraph '  tile,-,.  fov vu aot aa ••D4Mat la ••1-a\aace, hi a  MN  '  aapllflcatloa of Ille  orlclul text ot lh• acre•••' which pro•14e4 lhat tu two 'buka wolll4 a4T1H each olher WIT of tnnaaclloa, •• a n1al.l of which p14 ••• lo 'be eanaarked.  or relea1e4 for earaark.  It tllriber po1ate4 out that the rip\ of conareion  applied oal7 lo 4ollar• aoq1llre4  'by Ille hlch  Kq11&11salloa ~ . 1 file ••ther-  lu4• luk oa April )0 nplle4 thal l\1 propoaala appl1•4 oal.7 lo baJa•c•• which 11 ul4 tor lhe lqw.llalloll had. nl tu fnaa11r7 anertheleaa adhered  to 11• poa111oa. 2  »,  a alr1ct laterprelaUon, therefore, of Iha lweat7-tov hov clauae U7  ata\lllsatloll operat1oaa lmllerlakea 1'7 ocnaalri•• - • r • of the frlparl1\e ~ • • • ' wldoh 1ffol•• tu takinc of open poaUloaa la tu cvreaclea of Iha  other -'bera wre ezla4e4  2.  fro■  lhe aoope of Illa .tcN-t.  tu Perlo4 tor ntch Clol4 ••14 u4er lanlark Woul.4 laala bee tor kpon.  !he quaUoa of lhe period for ldllch pl4. oace earaarke4 for a foretp oeatral baak, would r-1• tree for uporl • • fire\ 4ea1' With b7 the Jle4aral lleHne lank of • • Tork ill a letter lo Iba leak of TaDesula 4&1•4 Ila, 12,  1937, u tollon:  •.u lo pl4 which 11 ear■ara4 l.a 70v la ov Taal.ta r•alatac · ....a11uoaa1i, at 70v '4 1apoaal, tne tor uporl at UT U••• u4 fer aa laletlaUe U•, 1' la, of oosne, aol poHlble for u •Uber lo 1 tllfraauolloaa, Bl;Jiag an4 lellinc Go14 aa4 111••r-Gol4--letherland1--•....rlaJMl1che Jan• tlle. 2 I'bl4. Federal Reserve Bank of St. Louis  157 parade• the pei,1auace of ez11Uac lan u4 replatloaa or \o fore_ , llleir chaBcef. II • • - appropriate for u lo po1al oal, laonnr. lllat ■ lnc• •arlT la lhe Tar 1933 whn gol4 lranu.cllo111 tn till• •••\17 nn tlrat place4 natrlclloia, lhla bank bu coatluouq ' - • arante4 llceaaea b7 ,he Secret&r7 of the !rea1U7 lo ezporl, al \he nqull of U1 Olfller, all eol4 earaarlce4 ln ov Taul\1 tor accoul of arq torelp goTerDMlll or torelp central banlc. • 1 !he pro\l•, hovner, waa rai1ed la a  ■ore  laale\nt  for■  ta a lelter  froa the Preald.enl of the ••t11erlaad.1 luk, llr. !rip, lo llr. Jlafflaon of  lh• J'ederal leHne l1aDk of • .,, Tork 4ale4 Jcaar, 11, 19)6, acknowled.c1zic and  co•• on lh• J'e4•~1 leaene ot December 1, 1937.  knk'•  pneral  •1er■1 an4  eondlUou• letter  In 1h11 letter lhe ••erland.ache Jank, •• a ...ber of  lhe !riparlll• ~ e - n t . aakecl •whelher n aq lake U Iha\ pl4 acquired. lUMler  ezillinc anangemenh an4 earaa.rked tor oar accom1\ lll 7our Taal\1 vlll, u4er a.r:q clrcaatance1, be fr•• tor ezpon lo azq 4e1U.uUoll 111 tl••  ot  war ••  well•• la t1•• of peace•. 2 !he 1Gge1lloa • • al flral ■a4e la lhe !reaaU17 that \he point be cleaU with 1n the  ~  of lhe letter lo the lank of  Teu1ula q110ted abon, bat 1h11 • • r•J•cle4 la ta~r of a  ■ore  thoroaghgoiac  conaicleraUon of the probl•. 3 On rebra&r7 23 Nr. fqlor prepand a •aorama  tor the S.cre\aJ7 reten1DC  tha, lhe aaUer be 1184• lhe ■emrand.a  to lhe ■ibJeol  letherlaa4 · luk• • alalaeat and 1qp1Ung  et 41plo•Uc  aepUaUon■•  Kr. !qlor'•  va• •• tollovaa  •fh•n la ao •llatacto17 precedenl or auftleienU.y 4eflai te av.lhor1t7 la \he flel4 of 1aterna\1oaal law relatln lo lb• obllgalloa1 of a couat17 vUh reaped lo gold earurkecl tor anolbar cout17 or u, celllral bank. ru, lqui17 gi·H• u \he opportuU7 ot 1-ae ■\lnc lo lh• adhereah ot Iha !r1jlarl11e Declaration the po111b111\7 of eAler1nc lnto a lrea\7 or • - other fora of binding caarantHiJIC oa a reciprocal baala lbal eanaark1 of gold 'beloncinc lo arrr -ber ot th• fripar\11• 1>eo1ara- · tloa will be tree for ezpon to !:!T 4eaUnaUon ln ot war •• nll 1 "fraaeaoUo•• , Jai'ia« aD4 Selling Gold aD4 lllTer--Gold--Jank ot Teusula•. 2 8fraaacllon1, lhJTiDC aD4 Selling <Jol4 and 811Ter--Ool4-letherlaD41--le4erlu4aehe lank' tile. · 3 •!raaaacUoa■, Bun,11g ud Sel11DC Gold an4 Si1Ter--Oo14--General• file. fllftk . Federal Reserve Bank of St. Louis  acr••••nt  U•••  158 - . la 11-a of peace, al lea.a\ ao loac u  a11Ch coaalr1•• are aol al  war with each other. heh an acr ....n, wo111.4 be Talaabl• ao\ onq u olarlf71a« rldll• which are al ucerlala, 'but •• 1acreaalllc Iha preaUge of lbe frlparU ,. DeclaraUoa u4 lacr•alnc \he  pr••••'  aiftlltapa of adherence to \he l>eclaral loa. •• wll •• a4ftJlc1ac tatena U onal law relaUn to eanarkl-c.  •a«-  If 7011 'bell••· that \hl• •ucae•Uoa ha• UT Mrlt, •• would pll to lhe lecleral •Hnelaak tbat it repl.7 lo frlp aloq the tollovlnc liua:  'Gold 1• DOW acqo.lre4 bJ' u4 eanaarke4 for 70• •• aa adherent of lhe !riparllte Declaration, 1a accor4&Dce with the atat ...n\ ot the S.cnta17 of th• fr•••1U7 (He ov cable •o. 62 of •onaber 21&., 1936), that 11 uder &ll coaclll4•4 dlrectq between our two treaaviea. ~cor4lncl7, 70v lq\11.17 would appear to 'be a •lt•r for clariflcatloa aaonc all th• a4he:renh of the !riparUte leclaraUoa. Va han therefor• referred 70v 1aql1117 to our !rea•lU7 tor it I coaal4eraUoa. 1 !'hereafter•• alghl diacuaa the •tter wi\h \he State Departunt and., lf .,.,. Deparl•nt thlaka lh• 14ea worih CallT&lalnc further, it l could. be broached lo lhe frlpa.r\lt• •••r• in••• approprlal• aanner.•  !he aucgeated paracraph ••• accor41ncl.7 1ncla4•4 la llr. Barriaoa • • r91>l7 to llr. frlp of .lprll  J.  15, 1931.  CoaTer1loa of Gol4 Kar.arked. 1-7 7oreip Stabtllsa\loa rand• ia the heat of a •TOcaUon of the frtparU h J.cre ...n,.  ftu.117 llr. !rip la hh l•U•r of .TaaUJ7 11, 193g Nquate4 th&, J'edaral haem llank of  •w York  \o lnclu•  1n Ua •tenaa aD4 condltiona• a  atateaen\ to the effect that lt vaa prepared to •••l•I in ,he sale of gold held  llDder eanaark for the Ietherlan4• Bank in  ,u  ennt of the reToca\lon of \he  'l'rlparUh ~N■ent. 2 !he h4eral -. ..rn Jank of In York 1n repq alapq referred oace aor• to the regulalioa1 la force, an4 pointed. out that la tlw  .  pvchaH u4 aal• of gol4 U could act oJU7 •• fhcal a«•nl for the Unlte4 l\a\ea .  1 "fraa•ctloaa, ~lng laMaolle Jank• tll•.  and Sellla« Ool4 aa4 lilTer-Ool4--le\herlanda--le4er-  2 Cllaok ••'herland• Jank letter. 3 I'bl4. Federal Reserve Bank of St. Louis  3 Federal Reserve Bank of St. Louis  PAI! y  Special hchange 8\ablllsa,1on  Oula14• the friparUle:  .&er•-'•  1937-1931  1937  I.  !be Brasillan Agre...nt:  II.  !be Second Chiu•• ~•••nt:  Jul7 1937  III.  !he S.coDd Jlerlcan -'Cr•aent:  laJ1Dar7 1931.  11117  159 I.  ~  Jlrulllan .tcr••ea,:  J11q  1937.  la Jaq 1937 ,he 'lna•UJ7 ooncla4ecl u acr•••al with the J11atat17 of  •al• of p14 lo »rasll aa4 lhe pron 1toa of dollar  ftaaaoe of lras11 tor lh•  •xcbenp lo &Hid that cou\17 la elablll•lac lh• ■ilrell.  n  alao ooacluded  a ••coD4 1tabillsa'1on agre•ent wi\h lh• C.n\ral lluk ot China at that and ln Janaa.17  193g  ■ad•  a ••coD4 a\abllbaUon  acr•••nt  aae  vUh th• Jlencan  OoTernaen,. On Jul.7 15, 1937. SecNta17 Norpn\hau concluded. n.egoUaUona with Arthur  4• Sousa Coata, Nin18'er of liauc• of llrasll, tor an acreeaent coTering ,be  •al• ot gold to  Brasil  b7 th• Unlle4 Hateafrea11U7  exchange for \he purpose of atabillltnc ,he  qreement vaa  ■ilreia.  and lb• prori1lon of dollar  fhe leUer •bod.71ng the  •••t to the Federal Res•n• lank of Iev York on lul.7 15 with  ln.atrucUona to car17 out the conte11platecl transacUon1 in behalf ot the Stabilisation 1und. under th• ten, of the Secret&rJ'• letter of Sept•ber 4,  1934. !he  au•••nt vi\h !raall waa  in two part1.  Paragraph One of the Secreta17'• letter lo the X1n11ter of Finance 1tated  that the United Stat•• agreed to ••11 at the price pro•lded ln Section 44 of the Prortdoul Begula\1on• ($35 leae 1/4) up ,o $60,000,000 of gold which be eanaarlced b7 the 1ederal llHen•  ~  of  •ew York tor account of  the  Banco clo Braail. !he reaalnder of the  acr••••'•  acr••••n\ followed  clo••l.7 th• liua ot the repurchaee  concluded vi th Mexico and Ch1aa lhe prenoua 7ear.  Be1ene leak ot  ••w York u  fiscal a«•nl  acr•e4  fh• 1ecleral  \o purchaH ■ llr•h fro■ ti-.,  lo llae a, requealecl b7 the :Banco do llra11l acUnc tor it• eo••ruent ldllah voul.4 be cre41 led lo the 1ederal hH"• lank of lev York •• f11cal apat la a Federal Reserve Bank of St. Louis  160  -,.olal -aooout.  Upon reoelpl et a4•1oe Iba\ lhe allnll were CN411•4 \a..  l'...ral ....rn knk ot lew Tork would ere411 lh• 4ollar equlTalent ln a  tu  acooul fer Iha Janco 4o Inell al Ille prnalllnc l•lecraphic IJ"Uafer rate.  total allrela ao huc)ll plu lalereal accna4, which•• ••' ln thl1  acn...nt  al 1/2 of 1~ abo•• Iha anrace re411coat rat• ot the 1e4eral lea•n• JaaJc of ••• Tork for the precediac aoath. •u aot lo ezoee4 the equlftleat of $60 a1111on coapule4 at the rate al which lb• luco 4o lraall acre.ct to repvcha.. th• llil-  reta.  !he Janco do lradl &&rH4 to npurchaae the allreh at  be autual.17 yree4 11POII whu the allnla wre tlrat boqht  luk of lev York aD4 at the rate at which lh• 1e4eral !he Janco 4o ltraail  acr•e4  u .. , ••  ■ight  b7 lh• 1e4eral leHrTe  •••n• lank \oqht  th••·  to repvcha•• alao the allreh cred1\e4 •• interest  at the nqu1t of th• 1e4eral le••rn lank of lev Tork or ln the abaence of  •••IT ainet7 4-T• or al  requat  lh• lenainatlo11 of the acr•nent .  .la aecurU7 for th• fulflll.H11I  ot lhla acre•ent the lallco  4o »ra111  acr-•4  to pleclce pl4 to \e left in th• cutod7 of Iha 1e4eral Ke••ne . _ of lew Tork  la an aacnmt equiTalent lo the allrela purchaae4 plu i1Ltere1t at the repurchaH In the ennt of a fallur• 011 their part lo npvchaa• the 111lrele the7  rate.  acr-•4 to authorise lhe :rederal ha•n•  Bank  ot'•ev Tork lo ••11 '11• cc,ld. to \he  Unl\ecl ltat•• freaaur;r ln auch a aauer aa lo aan l}le led.eral leHrt'e llank of lew York  fro■ &Jl7  loH or hara re1u1'1ac froa their failure to fulfill the taraa  of lh• IICl"••••nt. !b.e qreeaent wa• lo ler■lut• on Jul.7  llea 190a lhlrl7  4-7•'  15, 19112 aubJec\ \o earlier leraina-  notice.  fte lwo part• of Ihle qreeHn\, lhouch rela\ad aepe.rale. Federal Reserve Bank of St. Louis  !be Janco 4o ~raall u4er lhe reparcbaae  cloHq, wen lechalcalq acrea■en\  alghl ahlp pl4  161  fr• .-.stl aa4 pledp 1' •• oollaleral tor allrele \oap\ 1'r lh• 1e4eral  ••n• luk ot •• Tork.  In Ihle IAIT 1' oolll4 lacrea1• \he 4ollar ••c'leap  ...S.laU• tor atablllsaUoa operaUoa1 aa4 ,11e lraaaactloa wo1114 baT• tbe  etfecl of a lou a«aiae\ oollaleral.  In 1h11 par\ of \he u4eretu41ag lh•r•  waa a lip1tlcut 4ltt•r•ac• •• coaparecl lo lbe earlier Jlex1Call u4 Chi••••  !be ■ilreh pvchaae4 •  aptNMllh.  the 1e4eral  •••n• luk ot ••w Tork 414  ha.•• to be repurcbaee4 al UT 11M apoa 4aan4 1"ll onl7 after a 4et1nit•  not  le.pH ot \lH lo l»e a«r-••4 apon aa4 in a441\1oa \he lat•r••t rat• waa reduced  froa ,_ lo  1- per au1111.  Sholllcl  ,u  loco do »ra•ll pvchaH eol4 tro11 the  Un1\e4 ltate111114er Uie tire\ paracraph of \be acr•e•nt lt would the  fro■  1ou other eource.  ha•• to tlnd.  If l\ \hell pledpcl \he gold ua4er lh• r•-  pvchaa• par\ of the a«r•-at Ua dollar reaourcH woul.4 D.Ot  ha•• been 1ncreaH4.  !he effect then woul4 be that ,he Janco 4o Ira.ail•• tlacal agent tor lh• lras llian (JoTanment vou.14 'beco•• I 1- owaer of gold which would appear aaoq U •  re Hrna but aplu\ which the Uni te4 lta\ea 'frea•V7 woa.14 hold a lien.  the  ■1lre1a  Should  pvchaae4 b7 the 1e4eral l•••n• lank ot lev Tort and ••cur•4 b7  thh llen not be boQCht back b7 th• knco 4o Braail \he plc! voul.4 be lo1t to th•. ~  Ia effect, \heretore, \he Janco 4o hull alapq ••cve4 an option to  cold  fro■  the Ualte4 Stat•• !reuUJ7 at 11••• to 'be a«re•4 u:pon and in an  uoul ao\ excee41ac $60 ■Ulloa.  new  fhia prl•11•p  wa•  tbe aore aubetantlal la  ot the long \era of th• acreuent, lhoup the t1nl\e4 Stat•• !rea1UJ7 waa  •afecaarie4 b7 ,he option of teniaaUoa oa lhlr'7 hT•' ao\lce. 0a jprll  7, 193s  lh• lra1lllu Gonraen\ lqu1re4 \hroagh lh• tfll1'•4 l\at••  •1-aq ta •10 4• Janeiro whether it cou.14 obtala a dollar a4Yance ot $15 agaiu\ gol4 ahippec! Federal Reserve Bank of St. Louis  fro■  Brull ua4er the  acr••••nt tor th• pvpoH of  ■tllton  co•erinc  arrears•• oo••rclal cn4U1 on lllporl•  u-nt Ir reference lo the tenaa of the  fro■  !hie laqlll17 w.a  all eoaatr1••·  acre...n, ot  Jul.7  1937  &114 oa J.apal 2~  Ille Pne14ent and lxchaqe Director ot th• laaco 4o lra•ll a4Y1H4 the JMrtcu  aba1aa4or at Jllo 4• Jauiro that the Clo••raeat 1atea4•4 to upon 2S toaa ot  eol4 abroa4 lo .., a.p a 11,u.1, tonlp UNlt ot the tacll1'1•• of Ille  NHrn  aa4 that U laleD4ecl lo ••all  Jv.l7 1937 acne•at  an4 open aa aceouat with the  7eclaral ha•n• Bank of •ev York paraatee4 'b.r gol4 oa 4epoaU.  It requ8'ed  thla lou tor ou 7ear reuwabl• au'bJ•ct lo a4•uc• aotlce of lh1riJ' ..,... ~~,  26, 1931  the frea9Ur7 replied throach lh• Stat• Depart■ent that \he  J'e4eral •aene Bau of  •ew York ••• prepared lo recei" an4  ear■ark  ...,o 4o lrull aJl4 • • pnpancl lo e&JT7 ou, the ,era1 ot lhe  .  a«n••nl.  On  Juq 15, 1937  flnnc ,he U.• of the reparcha•• obllpUon •• oae 7ear  date on which lt wov.14 ba;r  ■1lr•l•  fro■  the  an4 alloviq lh• repa.rchaa• of ■ilrela credited  •• lntereat to be u.4• ne17 110 '-T• 1utea4 of ne17 90 lhe fnaaU17 authorisecl lh• J'e4eral laMr.e Jut of Iew York to  teraa ot thil a.nderalan41JaC.  1014 tor the  On Septe■ber 2  carrr  out \he  It waa aot, hownr. uUl after th• outbreak of  ' .,. . ·• )  the h.ropeu war l 011 Septe■ber ~ that the Banco do Bradl 'bqan to 1hip gold  to \he ~e4al Jleaene th•••  arrance■eat ■•  ~  of ••v Tork  fro■ lt ■  l.on4on office ln execution of  1  1 !be rel.nut oorreapon4•nc• la la •!ro1acUoa•--~1n« and Selling Gol4 aa4 lll••r--Oo14-Jras11--lln1•t•r of 11nance• flle. Federal Reserve Bank of St. Louis  (ii.  I'll• S.coll4 ChimH .lgNeHat:  J'Dl:r 193 7-  flle apeclal agreeaent wlth Chi• ugotlated in lq  throqh periodical renewal a of a new  acree••'  fro■  aegoUatecl earl.7 ln  one to atx  ■ontha  1936 r-1•4 la effect  11.11U l 1 t  Ju.17 1937. !he Central  23, 1936 it wrote lo the 7ederal  that under thh  agree■ent  h ■ ene Jank  replaced b7  Bank of China had  a•ked for and o'bta1m4 conaent to ou IIOd1f1caUoa of th• Nq June  wa1  1936 tenaa. On  of Iew Tork polntin,« out  the 7ederal lleun• :Bank of •ev Tork ba4  the con-  tractual ript to aell exehaDp on Sbanct>a•. \he 4q after 1t ha4 gi.Ten notice of a  de■and  for reparchaH of Chia••• 7U&n which 1t hel4 aeclU"ed 'b7 a pledge  of dber colla\eral.  fh• hntral Jank of Chiaa requeated a fw da71•  fore thla right could be eurclaed ta order that it  ■ ight  of the collateral or otherw1•• find the nec•••&IT 4ollara. that \he7  ■ight  ha•• 120 hour•  fro■  aand1ng repm-chaH within which the7 On Jul.7  ti••  be -  take 1tep1 to 41apoae !he !re&•UJ7 qreed  th• tia• of the 4eapatch of the cable 4e■1ght  repurchaH the JU&!l.  9, 1937 S8 cNt&r7 Jlor~•ntbau iaaued a pr••• rel•••• announcing  a  aecon4 Sino-Aaerican 110neta17 a«r••-nt under which the United State, !rea1UJ7 would acquire gold  fro■  China and would Hll lilTer to Chiu u4 would arrange  to proTide \he Chine•• vUh dollar exchange. Chiu•• 111n1a\er of ~inance had  co■ e  Be aoted in parUeular that the  peraonal.1.y' lo the United State, to conduct  the ugotiationa. !he arr~ement aad• with Chiu at lhla ti•• nbodied \hree part• u4 the  au'baluc• of 1t 1a brtefl7 set forth 1n the following  aeaorandu■  seal b7  llr. Opper fro■ the frea1ur7 to the hderal lleaen• lank of lew Tork for \heir  co...a, on Jv.17 Federal Reserve Bank of St. Louis  9, 1937:  164 •1.  • • 1Jn1'e4 Stat•• lo pvcha•• froa lh• Gonnaen, ot Chiu 62,000.000 . . . . . of allnr IIOW hel4 lll lh• u.u., Ital•• ., 1'51 aa OIUIU, •• lena alallar lo lho•• appqtnc lo ,he earlier pm-cha••• troa Cblaa.  Clikl• to ue the dollar proceed.• fro■ ,u aale of dlTer for lhe pare!aue of pl4 fro■ the Un1u4 Ital•• al $)5 an ouaoe, plua 1/4 of on• per o•I• an4 acre• lo holcl nch pl4 ua4er earaark a\ lhe le4eral hHrn lank of York. an4 lo UH lhal eol4 oal.7 for th• purpoM of aalatalnlq 1\abill\7 of 7taaJl Ucbamce.  2.  •ew  s,a,••  J.  7or lhe pvpo•• of alabilisatloa of 1UJl e%change lh• Uaile4 !rnaQJ'7, acUn.i lb.roach 111 fllcal acea,. lh• federal leHn• lank of lff Ton:. will be prepan4 lo proT14• U. I. 4ollara up lo $50 llilllon ln ezcbana• for an •fll11Talenl aaoul of 7U,D coaUaceal upon a repurchaae acr•...nt, u4 apon the 11aiale11AAC• la lhe U. I. of collaleral lo u eq'lliYalent aaoal ta pl4. ru, arru«t11en\ to be lerai11al•4 on a 4etin1'• dale 111&tuall7 acreea'ble uleH renewed fro• \lae lo u ... thereafter b7 acre-nl on al lead JO 4q1' aoUce. Ialereal oa lhe_aaou, of clollara ctnn up in e%chuge for J1MlJl lo be charp4 a\ lhe n.l• of ______i,erceal per au•.  !he repurchaH acreuaen\ nterNd. lo la lhe lad paragraph of lhla ••o-  rand.u va1 an &11Pl1f1caUon of \he llq 1936 acree. .nt an4 prori4•4 for lhe pledge of either gold or 11lnr or •o••  •• follow,:  oo■b1naUoD  of 'both•• oollaleral tor \ha 7uazl  !he J'e4eral leHn• lam: of • • Tork  acr••4  to purcha•• TUB \o  be earaarked. 1D a ■peclal accout tor lb.a■ •• fhcal agen\1 tor Geka an4 \o  cred.1, the 4ollar• lo th• C.atral Jank of China la a apeclal accoaal  OJl  \ens  14eDUcal vi th \ho•• ln \he e.u-ller agre...nt, ucep\ \hat th• latered vaa lo be charpcl al 1/2 of 1~ abon lh• 4hcoual rate of ,he J'ecleral baene llank of  In 1h11 respect tb• IMSlllu arrancnen\ • • tollow4.  Sew Tork.  •oe\ of 7taaJl to h  pvchaaed  wa1 the  eqlliYalen\ of no\ e%cee41ng $5() ■Ullon  laa\-4 of $20 allllon •• ln \he earlier acre...n,.  of the llq  !he  acree■ent  l•r■•  !he total  !be 120-hov ■o41fieallon  • • lncla4e4 la ,i:.. ..,, lena,.  coTerlnc the pled.p of eol4 an4 ailnr collateral were la respect  \o p14 \he • - •• thoH in \he lrasillan acr••enl u4 lR nepeo\ \o allnr Federal Reserve Bank of St. Louis  165 ,Ile Ila■  •• \hon 1a the flrat Ohluae  acn•••t aJl4 th• cla\• of lenalaatloa  fl-4 a\ Decea'ber 31, 1937.  lh•ll&h ,h1a a,creaent ••• ••eoUa\•4 al th• .... U• •• tbal w1,ll ....,1 . 11 atlll contained the pronaion tha\ the Central lank of Chlu waa obllp4 to repv.rcbaH the 7U&Jl at P7 t l • upon 4aan4 ot tM Jecleral lleaen• lank- of Wev  York a1 fl1cal -«9n\. On Jul.7 12, 1937 the Jecleral leaene lank of lev York•• flacal ~nt of the United Stat•• purchased 62,514,710  Central lank of Chill& a\ a price of $JO ■illion.  OUllCe1  451,  .999  of allnr at  flu troa th•  \ha.a pro•1cl1ac that lank wUh about  !hia tranaacUoa vaa not carried out lhroqh the S\ab1 lilat ion  7UDd but oa Jul.7 19th t h e ~ pvchaaed fro• the !ruaurer of the Unlt•4 Stat••  1,285,714 _ounce, of gol4 at $)5 flat 1 at a coat of $44,999.~4 on Jul.7 29 aol4  ,·  ..  $)0,099:·of 1' to \he Central luk of Chiaa al $35 plua 1/'4. uder •arurk for the Central Bank of Chiu.  On  •on■ber  fhia gold vaa placed  10,  1937  th• Central  luk of China carried. out the fira\ traasacUon the J'U&!l npurchaH &erM-  •n\ crediting the lederal Jle1erve lank of Wev Tork with 50  ■ llllon  7'J&D  and  pledctnc Ju\ _ . $15 ■1111on ln eold. aa collateral. !he Chin••• lank ln 11l1UaUnc thla truaacUoa aclnae4 the l'e4eral ••••ne lank of lev Tork that the 4ollara nr• •••4•4 to cou\eracl prenur• oa \he Chin.ea• purrenc7, and the bulk  of the 4ollara were pai4 onr a\ \heir requeat lo  IJ' J'ebraa17 10, 19)! the nUre $5() a•a1le4 of aa4 la 1ebrU&J7  ■illlon  Cha•• •auoaal laDk of Wew Tork.  pro•14•4 for  1939 aor• 'ban oae half of lhe  by'  tbe  ao-e...nt wa•  Tll&!l were repvc~H4 ~ tbe  'F  ,er■ a  ot lb•  acree■ent~•■ >J ■ w,11-•-  tu •eteral leaene lank of  •ew Torie to  aarls•• \he ,ran1acUon1 under lhe the outbreak of lhe vorl4 war;  JU&D  the following atatmnt forwar4e4  the !Na1U17 on March 1, 1939 •--  acrenent vhlch were carried out \afore  2  1 authority ot \he Secreta17'a le\ter of •o••ber 6, 1936. 2 !he rel••ant correapondence la la •tranaacliona--~inc and SelliDg J'oreip bchance--Ban.k of China• file. Federal Reserve Bank of St. Louis  • • - - ot the  ••Hrn :laak of•• Tork of th• T11a11 Pvchue4 u4 Gol4 Ple4p4 an4 l•l•u•4 for Sale uder th• Acr••••nt ot  •-'•ral  •••1' u4 the  lulz 1~. 1937' •• TUjl _,__ --  -T-  Date hrcha.ael  •••••r 10,  1937 •o••ber 26, 1937 Dec. .ber )0, 1937 '-'ruaJT 10, lt)S Date Sol4 hbru&r7 15, hbna17 2S,  1939 1939  50,000.000 50,000,000  50.000,000 ij1000,000  1  ••D4•4  . ,.  t.29375 .29375 .29375 .29500  .000,000  50,000,000 ~.000,000 Ioo,000,000  $.29375  .29375  $14,617,500.00  14,687,500,00 14,687,500.00 ~ I 42~ ! 000 . 00  14s.4i1,500,oo $14,617,500.00 1-,6S7,22Q.OO  '29,375,000. 00  t19,112,500.oo  65,000,000  •lallc•  Dollar•  !~~! •1ne Ouc••  Talue • $35 per 1111• Ounce  Pl•4ce4 to u .. flacal apnt of the United Stat•• out ot eol4 hel4 mader eanaark for th• Central Bank of Chiu.•• 1ecurl\7 for th•  perforaaAc• ot  u,  acr••-nt  Leu pl4 releaH4 and purchaaecl l,r u oa J'ebru&r7 15, 1939  X.H gold releaH4 an4 purchased. bJ" ua Oil lebr11&r7 2S, 1939  Balance Federal Reserve Bank of St. Louis  1,395,311.161 t48.s3s,34o.s9 112o,sso.6oo  14,730,S21.oo  1'20, S14 .1106  141.695.006  553,686.162 •19~379,015.65  .  .JJ.i. •• Illa hcoll4 llezican ~.....,, ~  t19JR.  la laau.rr 193s ,~ uw repurchaH acr•n•nl ,,•• neeoUatecl with llezloo ~ - fellowed lh• first acr••••nl clo••l.7 ezcept th.a\ l\ wa1 for an - • ' ao\ to ezcee4 $10 ■llllon 1111\ead of  $5  ■llllon, and a~ainat gol4 an4 ailTer  collaleral 1naha4 of a«alnet alb·er collateral oal.7.  !he pron Ilona regar41n«  lhe haDdllnc of \he collateral all4 the obllp\lona aa1UINd b7 the lank _of Jlezico an4 the 7e4eral ••••"• Jank of respecUTe  pnna■enh  ••v York •• fiscal agent• for lheir  were the .... •• \hose ln the Chin••• and kasillan  Arranceaenta except that 1n thh caH alao the require. .nt that the lank of  Jlezico auat repurchaH the ~•o• acquired b7 the 1ecleral lleHM'e Jank of •ew York at any ti• upon 4eaaa4 waa coa\1nu4.  reduced fro■ J~ per aum1 \o 1/2'/,  a~••  !he ia\ereet rate waa, how•••r,  Iba 1ederal hH"e lank of lew Tork  re41acount rate for the precedinponth aiul the 4.ate of teraination waa fixed at  Dece■ber  31, 1938.  On March  5, 193g  the lank of Mexico credited the hderal l•••"e Bank with  JS,100,000 Mexican peaoa and ple4pd 21,000 ounc•• of gold held b7 it under eanaark with lhe 1e4eral  ••••rn lank ot ••w Tork•• collateral.  !he peaoa  '  were purchaaed. b7 the 1e4eral Beaern Bau a\ .2775 per peao the BaJ1k o~ llezico waa cn4Ue4 with $2,997,000.  1'7  !hla 1-.ll lraasaeUon waa liquidated 1 the repvcha•• of th• peaoa b7 the lank of Kexlco on Jlarch 16. In on lt• balance ah••t th•••••• atablllsation  ,he r91>urcha1e  ,n,e the  acree■ent•  of  Stablllaatlon had. 1aclwle4 the foreign ourr•&CT 'bought  - • Ua aHel1 an& Mt up a  con tr~ eat17 for the eo14 pledp4 and. U1 11a~  ltllllF fer 1h11 gold to the foretp Central lank.  Cb1•••  On \be  Jlarch 14, 1931  \&lance aheet both th• •ne&A and. tranaacUona appeare4 •• tollowa: l•traaaaction1--la,izag and S.lllac 1ore1p hchanp--!ank of Xexico• file. Federal Reserve Bank of St. Louis  168  LIDILI!IU  ~orelp b ~ 4u• tro■ forelp ~Secured Depo11,1 Central la.Dk of Ch111a  165,514,166.67 Tua  lank of Jlaico  10,S00,000.00 Peeoa  $41. 659 .120. I)  2,997,000.00 Llabilltf tor Gol4 ot 1orelp Jaaka hel4 a• collateral  Gold of 1ore1p knk• held •• collateral on hchange 1>epo1Ua  Gold of Central :Buk ot Cb1na  1,395,JSl.161  Ool4 of Bank of Ienco Federal Reserve Bank of St. Louis  01.  17,999.110 os.  ~.SJS,Jlto.19 3,079,968.85  Gold of Ce1atral Bank ot  China Gol4 of Bank of Ienco  $48,S3S,J4o.89 3,079,968.!5  P~lI  !ha Gold and rorelcn lxcb.ance OperaUon• of I.he Fund  fro■  the fripar,lt• .A«T•••nt  to the Outbreak of lb• Var  I.  the Sterlinc 11&1.uc•• ot '11• 1und after Sept•'b•r 1936 u4 the llone7 -..Plo7e4 Account.  II.  Stable hchan«e1:  October 1936 to Jlarch 1937.  A.  hanaaction• 1n Sterliac.  I.  fran1acUoa1 with the lank of ha.nee an4 the letherla.nd1 l!ank.  C.  Ool4 franucUona with \he General fnaaver.  1.  PropoHd but leJected flan tor the Use of I.he Stabilisation  ~  in Connaet1on with the Gold Sterllisa\lon PoliC7. D. III.  IT. T.  fhe Second CJold Scare:  Jpril-Ja• 1937.  JlouUu Operation of the hnd: the Dollar Scare: .i.  TI.  Suamar7 of Gold fra.n1acUon1.  Jul.J-Sept•ber 1937.  October-Dec..ber 1937 .  !he PurchaH of Incoaiq Gold  fro■  the Oeneral !reaaurer.  Deaterilisation, Yirat Cs•ch~ Crlala and U.atabl• hchangee:  Ju'G&ry-  ~ • t 193s. YU.  Deollu in Sterling u4 \he Munich Crilh:  YIU.  franli Uon to a lev Ster liq-Dollar late: Federal Reserve Bank of St. Louis  J.Qguat-loTe■ber  193s.  lo.,..ber 19J8-Jantlal7 19)9.  - 2 -  1%.  %.  •--lllc  '118 lterllnc-J>ollar hehaap lat• at  ~.61: JasaU&r7-lap.el 1939 •  .l.  AccmaulaUoa of Ool4 b7 \he 1aa4  •·  the Probln of Ool4 Shipaen\a b;r Parcel Poat.  C.  Lo11 of Gold 'b7 the l'v.Dd:  !ha hD4 Dillin« \he Var Crh1s: Federal Reserve Bank of St. Louis  j,pril  fro■  Juuar, 17 lo April  3 lo Jul.7 31, 1939.  Aaguat-Sept•ber 1939.  J. 1939.  169 I.  fM lterllnc lalao•• of ,he hn4 atl•r Sepln'ber 1936 aD4 ,he Mou,  -.Pl•7N .kcouat. llae ceneral readJut•nt la excbenp rat•• tollowinc lhe 1rench 4nal•Uon  of Septaber 1936 1ncla4e4 a rea4Jua,1ND\ lA eterllq.  Da.rlq \he abort period  when \he In Uah lxchange WqaalbaUon .lccouat waa 4onaanl in late Septnaber and earl.7 October, aterllq clecline4  fro■  a le..-el of about $5.00 lo a le..-el of  1  about $4.-to·, and ,he aterllnc rat•• of all \he olher countrlea parUc1paUng in the fripu·U te .A«rHment were appropriately aclJuatecl to \he new relaUon1hip• ••tabli1bed with the dollar and the mw leTel of the 4ollar-aterl1ng rate.  Duri~ lh1a Nad.Juat..nt the Stabilisation :rund pTe aoderate aupport to ho■ Sepleaber 26 to October  derllng. clecllninc  fro■ 4.96  to  4.s9-1/2. 1 It  $1,000,000 in gol4 at $34.  n  7  al.10  lt boacht about £2,250,000 at rates  l>oup\ oa October 2 Juat OTer  wader Ua atudlng or4er,  2  an4 on Oc\ober 12 1t  held ,he equiTalenl of •10,s30,ooo ln aterllnc and had $13,763,000 in gold  under eanark at the Jank of hglan4.3 ~ r •·•fter lran.aactlona •• a re1ult of which gold waa \o be earmarked or rel•••ed  fro■  earmark,  beca■e,  mder the Treaaur;,'1 a\rict iDterpretaUon  of the tvent7-tour hour clause of lhe 'fr1parU te  Acree■ent,  \he prlacipal  . .au b7 which \he Stab~li•atlon hn4 proaoled atabllU7 in \he foreip ex-  chance•.  Such transacUona vere paHe4 lhroagh  ,taa ••• •coatJ"Ol accounts• e1tab-  llahe4 with each other b7 the parUcipaUag cea\ral bank• ln behalf ot tileir reapecUn go·Hrnmen\1 or excb•np,.  lnenheleH 11.&DT alnor, and  eo••  a&Jor alabll11aUoa operation, ven 1Ull ettectuted in other _,.,. ( !be - .  rut, llowe..-er, did not allow a.a, of U1 operation• to reault ill open poalUoD1 1 lterllnc, Specific hthor11a,1on1. 2  s.e  pace  Fr . : ' :··-· ·  3 Veekl.7 balance ahee\a. Federal Reserve Bank of St. Louis  c ; , ~, .  170  / -  tentca ca.JTencl•• of u, 111ponac• aa 11 lla4 toM occaaloD&l.17 la traan  1a  aa4 alerllac 'before lh• !PlparlUe  jg!".._, .11the  paeral cperaUag nl• ...  now for alerlinc purchaaecl 1,,- Ille 1a4 lo 1- cre41'e4 ,o Ua uw •coa\rol•.  2 •o. 3, kcoa, a, \he Jiau ot Jacla114 which wu lhea lllae41at•~ 4eblte4 aa the aterllnc waa coDYert.4 lalo cc,14 bT Iba laak aa4 place4 11114er earaark lD .kcoaal B~ and for lhe 1terliac aol4 1-7 the hJl4 lo be charpd lo 1'• Bo. 2  Account which••• then raplenlahe4 bT releaH of ,old froa earaark at the Bank.  accout T&ried \hereafter  w1 lh  lh•  cb&Dc•• la ehori 1•1'11 latereat  ra\ea 1A London .  !he baluce ln the lo. 2 ebrliq accounl re11aiud 1taUou.r7 at about $1,000 ,000  utll Dec•b•r 21, 1936 ucl fro■ JaDaJ7 1937 on lt became no■iaal.  for  10•  U fla.ctaated  U• al not OTer $200,000 and. then 'bepn to ehow a aaall credit which  becaae 1tabillsed at between $150,000 and $250,000 in the fir1t qaar\er of 1938. 5  !he cbuce• la lh• 1an4' • open aterli11g poli Uon of which the greater part vaa in \he •11one7 laplo79d• accou.\  1937 an ahOWD in !able 7 1  See ::p~ ; .:-·> .-t. pT.  fro■  lhe hiparUte ~•e•nt aUl Jul7 12 ,  .  l:.· ·.-. \·· ·. · .  October 13, 1936. · 3 9ol4 \ought mader the hnd'• authorlt7 at Jew York ahipping paril7 • • Mlcl uder earaark ln .lceout A• 2  Ope~d  •  5 ••~ balance aheeta . Federal Reserve Bank of St. Louis  171  !ABLJI  11  !'he hnd'a Loy Poallloa la lterlly  Oc\ober  1936 - lulz 1937  llouz !!IJ?lo7!4 Accoat  Date  boll.are  Po111149  Balance 1a •o. 2 Account at \he lank of !YlaDd  ID.§ •ona\er J Deceaber 7  2,000,000  9,130,000  $10,830,000 10,130,000 1,000,000  }~~11  2,000.000  9,SJ(),000  1,000.000  October 12  25 2,000,000  7ebniar7 l 1 llarch  2,000,000  15  1,600,000  29 5  1,225,000  19 26  li5<),000  350,000  '  275,000 275,000 250,000  22 April  12 liq  .ru.u  21  JO  450,ooo .  5,905,000  6.000  9,129.000 9,129,000  201.000 208,000  7,165,000 2,251,000  235,000 39,000  6,036.000  100.000 550,000  113.000  64,ooo  3,469,000 2,723.000  75,000 19,000 91,000 41.000 ~1.000  2,21io,ooo l,7lt6,000  1,375,000 1,375,000 1,250,000  1' 64,000  12  the flucluaUolla •holna la lhh lable were oloaeq rela\ecl to a eerl••  of apecial exchallp truaaeUon• wUh are aoled in lbe  un  \he Central lank of ArgenUna which  eecUoa.  Herline acquired b7 \he 7uad. for Ua new •o. appeancl for Iba flra\ 11•  011  J, or  •eoatroi ■•  the weekl.7 \alaace aheel of April 19.  aecomat fh• .  _ _, ... oal.7 $7,000 and ,he 1-1.uce la thla accou\ MTer roH aboTe '89,000.  2  nre al•o noalaal, lbouch both accout1 were acUTe •• a re1ult ot recular lnter••alloa b7 \he had 1a \be 1ter11nc aarlcel whlch coat1nua4 Wider rap1417 changing circa■  1tanc•• until the outbreak of the l Veek17 balance thHta.  2 Ibid. Federal Reserve Bank of St. Louis  world  Rt,  172  II.  lta\le kch•nc--e:  Octo1-r  1936  le llal"oh  boa Octolaer 1936 lo llarch 19.37 tbe  MW  19)7.  •7•'•• of •xcknp rat•• Nll&lM4  aa ataltle aa lt aa laler11aU0Ml pl4 eluaar4 vi th "14• p1'. polata 11a4 .....  la full operaUon between Iha coualrl•• in llarch lo Jae  tu  !rlparU\a £cr•••nt aa4 fro■  1937 \hia atabll1'7 wu 411\vNCl oalT to Iha eztanl of a 4epr•..  claUoa of the franc lo the lowr U.111' of 4nal.11aUoa fw4 '1 \Jle law of Oclohr 1,  1936. l>  ..., • m\er of  lhh perlo4, ~ • r , the ftrloua •conro11• ha4 to  J)HHV.I Oil  the • ..,  October 13, 1936 to Karch 31, 1937.  fraaaaction1 ln llerliDC:  A.  •zchan«e NlaUoa1h1p.  f._rr. October 13 \o •-lier 19, 1936,  \be stabllisaUoa hD4 - • \be pur-  chaaar of aterlin« for conTeraion ialo gc,14 in lta uv accout  •n«lan4  at the price quoted to U 4&117 b7 the  al rate• which fall cractuall.7 fro• aarbt 'bapn to har4ea,  l  lluk.7fhe  4.9() lo '4.17-J/4  u4 al the -  ~  at th• Jank of  aterlinc waa boucht  uUl •o•nber 12 when the  '1.11• the hD4 'boapt gold haartq at  $34.77. It, 11and.1DC order lo bQJ' at 1h11 price vaa lncrea1ecl on October JO  J,  froa 700,000 one•• \o 2,150,000  oac••• whieh waa lhea reduced to 2,150,000  ounce, oa •o•••bar 6 u4 lo 1,1'50.000 on •••'b•r 23.  At thla lillU U vaa  reca,larl.7 raDend. at11 Ocio'ber 29, 19)7 wua 11 lapeecl u.t111at,the reqv.e•t o~ th• Jank of Kiaclaad orlgtul order tor pm-ehaHa up lo 700,000 0111lCea ••• I~~ '"'~i..]: reuwad. ho■ Oo\ober 21 \o •o•u'ber 2 ,u had hQCh\ uarl.7 $19 ■llllon in  ,,u  -  pl4 in t.hh wq and. bJ' •ona'ber )0 ha4 a4da4 • tvtur tlK>,000,000 \rlncinc tta pl4 llll4er eanark tn Accoa\ .l lo a peak of  $72,556,000.  !heH pvcha•••  lelenlu4 y ,he nlat1onahlp 'be\weeJl the LoD4o• gol4 price aJl4 tM · 1 boa loftll'ber 7 lo 16 lhe balaac• 1hee\a ahow $SIJ1,000 oa 4epoaU for ti- Jtal la alerllac al the Oaaraa,._ frut COIIJ>&IIT ta Lon4on. I ban Ml hen ••'1• lo l4ea\if7 ,u lranaactlon ~•tac ri•• lo_ Ihle 4epoeU. 2 Bank of bglall4b1Hk17'tol4~U•r flla • ._,-- hfereacea -~ h 4rawa -t:roa '11• ·uttteM..- .flf ttae-liak or •nclan4 aaktac -that the ener -•1114 l>e i-eneved?  '-!!I Federal Reserve Bank of St. Louis  •••kl.7 - -.  ...  -:.  : ...  - I  -~ • ,  • .  173 ■lerlliac-Aollar rale u4 aol  '7  llae lewl of lhe alerllDC-4ollar rale wen  lllaa _,taa.4 after 4ec11lo•• ••r• \aaa a\ th• !reaaV7 lo 4lapoae of M• of Ille  haa'•  pl4 acquln4 la Accout I•• a 1tab1lisaUoa opera\lon.~  lefoN the hench 4nalaaUoa the lrlUah bchup .,_ualllaUon Accoat b4 been 1\ea41q acc•ul&Uq 1014  n.t  lhia lllflow 1aa4 \Ma eheeke4 b7 a  teapor&r7 alreacth la truce ill Octo\er u4 th• tlrd pan of lcw•ber at uw lenl.  It vaa Nauaecl, llowenr, la the latter part of  loTe■ber  i-H-ltt  u4 gold  alao bepn ,o aon heaTiq to Bol.l&a4, SwUserlu4 u4 \he U11Ue4 State,.  Aa  a re1ult of the llar4enlnc tea4eaq la alerllnc l\ wu 4ec14ect at the !r•••1ll7 \hat arq 1ubatantlal appreclallon ln alerllq ao aooa at\er the auouc-nt  of the fripartU• .&cre••nt woul.4 llake \hat acreaen\ appear luffecUTe a• an  •xchaace 1tablll1atloa ao■e  ■echanlam  of its ,ol4 held ln London.  -6 17,724  aD4 con1eqUAtl7 \ha\ t h e ~ ahoul4  2  the flral aal•• were aad.• on loTe■ber  OWlC@I wetie  rel .... ed. . , 142• 24 aa4 lh• a\erlt.Jac procee4• CNdi\ed fhh a\erllac wa, taken ia\o the  accou\a at a rat• baaet on the anrace cost price of the gc,14 in  .lceout 1,a\ lhal \tae  $3~. 7667377,  1.e., the 4ollar Talu of th• a\erling re-  oe1Te4 waa -4• equl lo the 4ollar coat of the pl4 aol4.  3  Gold waa Nleaae4 ln London in \hh ~ froa IoTe■ber  1937  23  ~re,  to the Accoat lo. 2 at the lank of Wnglan4. ~ ••  ••11  aa followa:  Gold releaeect fro■ Accoaa, I at laAk of !!eland. ($ Talue)  Date  1936  lne■Mr  23-25 Decea'berl  1937 Jaa1W7  23. 1936 to March  616,000 2,167,000  25  llaroh 1-12 -1-:c.uak  2 llr. Die\ricl\'a •s\ablllsa\1oa--Oeural: •oT-Dec 1936• 3 ~lac u4 S.11111& lol4--0 .•. A.• flle. Federal Reserve Bank of St. Louis  flle.  1.  {_'IM•• •al•• ot eol4 were ou eleaut in a  hlchl7 •ucceHtul aerie• of  atalalllsalloa operallona which ulpe4 to oonf1•• the n11etuaUona la llerllac wlllda a arrow range tor eo••  ■olltha  after the ooacluion of Ille fripertlle~  1"11 lllllola ••r• coapllcate4 'b7 a special lraufer !hi ■  probln  n•  proble■  ralaed 'b7 l.rgeallu.  etfecU••lT 4. .1' wUh b7 the actl•• cooperaUoa ot lh• lriUah  aB4 Aallricaa h.D4a.  0a lo••'ber  1, lu  C.nlral l&ak ot agenUaa oable4 to the J'ederal ••••rn  lank ot •ev York that 11• 4ollar requ1Nll•I• tor ,he balance ot the ao11th  woal.4 be $45 ■llllon ud Iha\ U woul.4 ••11 alerllng ln In York am ~ 4ollar1 1 1n London 4.all.7 lo conr lh• greater part of Ihle requlre. .nt. On \he .... 4aJ'  the J'Wld boupt at  4.SS-7/1  fro■  lh• C.nlral kDk ot ugenUu.. aoat  of which waa coDTer\e4 inlo gc,14, bul on lo••b•r  aarut at Jut ner 4.9()  fro■ Ua  lo. 2 Accou\.  \a1aa4 •• noted abon lq' lh• releaH  23 1 t aol4 £175,000 in  Moat of thh aterl1nc va1 ob-  ot gold fro■ earaark. 2 On lo•••b•r 25 a  further i:1-1/2 ■1111on waa bou«hl fro■ lh• Argentlu 1-nk at cred.Ued to the lo. ) Acco'GDI.  the  4.19515  and waa  Ot Ihle a\ou\ £430,090 ••• 1-edlalel)r aol4 in  uall lota at appron11a\el7 the••• rat•• an4 oal.7 lh• 'balance coDTerted into  eol4.  Sterllnc continue! lo 'be etronc and lhe ru4 released a further $2,000, 000  la cold on Dec•ber  s, ••lliac  about  $404,ooo 4ur1nc  th• 4q at 4.91.  On the uzt 4g U boa«h\ $450,000 at 4.90025 which U COllTertecl 1 Mr.-1>1etrich'a •stab111sa\1on--General: lo•.-Dec. 1936v file. On loT•b•r 27! 1936 the 8ecre\&r7 cabled,~ Prelident Booanelt then at Ha, nferr1n« to th• lranafer aad ataUnc lhat the aonq - • •••d•d. to pq ott a loan in lew York and  Iha\ \he aeceaea.r, exchanp order a ••r• placed w1 \h th• lank of h«land and the :rederal R•••n• Bank of lew York and that~ a.a• of both the United. State1 and the Britiah l\ab111sa\ion 7uda they were 'be111C executed without•~ 41aturbance ill the toreip ezchaaae aarke\. !he lranater •P~•r• to 'been apread out o••r a lonpr period {ball lh• la■' \vo of -.O•nber. 2 !hla aal• wa1 th• first of 1 \a 11'P! ud•r lb• frl~rU Sterli~ had turned unou in the ■1ddle of the 487 \lo••'ber 23) wUh MDT bUT•r•--laporhrs of Un . nbber &114 alli, aa4 atock ezchan.«e houH1 re■lttlng \he proceed, of 1ecvUie1 eol4 "7 fonlper1 ln lew Tork. !here were no apparen\ offer, and 1\ loob4 •• lh• alerllnc rate would ru ap, ci•lnc lo cr1Ucia ot \he nrkln« of tile lrillah hchallge -.ualisation Accout aD4 o\her atabllisa\lon tma4a Wider the h l ~ l t • uleaa aterJin« waa :r.Ued. Stace \he lr1Uah b e ~ laaallaaUot. Jiceeul 1.o.ote4 to \he hid thro th• lank of Ka«land each aorn1~ a uilY ~ld wtoe which • • l>oth •~biqia« a • ••111nc the 1un4 va, able •' •r l.lq rel•••• ot .,14 al tfiia pnc,. leaor aa b7 Jlr. Lochhead in au 111u.Uoa--l.leural--Icn•b•r-Dec•ber 19Jb• tile. Oil March 17, l93l '11• procedure vat ellgh'17 ao41tie4. Iaatead of ,uoUag a •iqle gold price t&a ••• both a buyinf, u4 a aell1DC prlc• \he Jank of Kqlaad. began ,o q_uote a 4a117 1-~ing ancl aelli~ price 4e\era1u4 b7 a arfia of 0.2 ah1111N• on each aide of lhe LoD4on fixed price. !hue oil larch 17 , woo.14 b'V at 1142 •• 2d, and aell at 142a.6d.  ha••  •••le•  t•.  rl••  v Federal Reserve Bank of St. Louis  P~J••  'lsf•!  175 lato pH. Oil Dec•ber 21 •'•J"lillC reached a..91-3/1' u4 \he ha4 ••• -1• la  I  tile  aara,.  aow NlDC a .., ••ll•r of ~5,000 tor 1'• .&ccoul • • 2.  !baa• \r1111aacuo.. are 1111'94 II.en  \.'  u,.nnuoa ot  1• 4•1&11  u •~H of \Ile  1  ,  •ro•U••  '11• hD4 lllHla.4 Ill• IIU'Db.  In Jaaaa17 1937 lh• ArcenUu reca.lllr•u\a \ecaae a1&batutlal o~• aor• u4  lanaaey 19 ,o 21 ,he had \o_q bl 12 alllloa troa lhe C.tral llaak of  fro ■  ArpaUaa for 4•11TH'7  OJI  l&J111&17  26. Ot Ulla 1,  111■•41ahl7 eold  .£950 ,000  la \he aarbl la ■-all lola an4 £4oo.OOO \o the luk of -.,lancl, thv.a \aporariq re4uc1ac Ua  1  llou7 -.Plo7e4• accoal, ldllch U replenlahed. men  o•1••d 4el1n17 of the alerllac oa Jv.q 22. p&He4 throgp th•  2  •o. 2 accoal • ' ,u 1-l.aDCe ot a;70,000 •• cre4Ue4 lo  £333,000 tocethar with aa a441'1oD&l Q5,000 Janaa17 25 were releaae4 Oil  r•-  !hla parl of Iha lrauacUo•  the •o.) accomat an4 ooDTerte4 lato gol4 lll th• uual lfal'.  s.u1...nt1  u  Janua17  fro■  ot Ihle, howeTer,  boqbt tor the Control account oa  eanaark aad. aol4 lo lh• . _ tor Iat•r•UoDal  26. !bla• lrauacUoaa were all carrle4 out vUh ahr- ·  line •' Juel n•r i..90 .  .u a  re111U lh• run4 waaa ••' purchaaer of aterllac ill lh•  ■arke\  lo \be  extent of about $1,600,000 and iacreaH4 Ua gol4 11114er eanaark 1n Account ~ b7 thal  MOWl\.  It - · al10 • ~ r of •l•rllnc fro■  JUQ&J7  7  lo 7ebrua17 l  to the extent of about $15 ■lllloll la order lo pa:r tor eol4 'boacht at ~·li. 77 owace.  3  &A  In spU• ot th1• e11pporl \be lead.007 la a\erllDC •a• • • weak ad \be  ha4 • - - a replar purc!laHr la 111&11 1011 aaouUac ln all lo t14,07,.000  tna J.-..rr 27 lo larch 5, al rat•• ardu.117 4eclla1ac troa ll.19-15/~6.lo  ~-17-5/1. Wilh lh• ...11 exceptloa of ~0,000 \oyh' oa Jebraaq 25 all u.... 1 It eo14 G.65,000 tor account Io. 2 and boqht £100,000 oa Dece■ber 29 for COnTerlloll ialo ~14. 2 See fable / - , ,., -. 1 3 lca\•4 oa pap , 1 - - • aol• .:· •  ••u•,•4 •• 1114 Federal Reserve Bank of St. Louis  176 pvela&Na ••r• huclled. oder the pneral proce4m-• ot Uae frtparlll• ~ '  al  ...,_ned  into 11)14.  1appon 1tera\oa.\ t5 ■lllloa  .A.I the •-- U■e lhe hall coatlaud to  llac luoqh 1 h &014 pvoba••• al $JlJ.  n whteh uoata4 lo  in the lael two week• of ~•bnaJ7 and aboul $5-1/2 llilllou ln \he flrat week  ot Jlarch. Oil Jlarch S and 9 the h1l4 renr,e4 U• poelUon u4 1014 D.,3~,000 ot  1 aterl1nc at to 4.SB-5/1 ($6, .  ftlla •'•rllnc ••• eb\aim4 throQCh  a releaae of go 14 fro■ earaark uaoaUnc lo  $2 allllon la lh•  Ko..,-  laplo7ed accounl.  $4, 6oo, 000 an4 'b7 a rec!ucU on of II repurchaae4 G,055,000 a\erllag  on the following 4q which U oouer,ed lalo pl4 1n \he uual unner bu\  March 12 r•l••••d a further $167,000 la pl4 aol4 \he reaulUnc  a75,000 la  '1ie  fro■ lla earaarke4 .A.ccount ~ and  aaral.  On March 11 ,he hD4 aUll fur\her reduced Ua Jloaq the  •al• of £250,000 la the aarkel aad oa Jlaroh 19 U ~/  ■illion fro■  011  lllplo7■d  .t.ccout b7  bepn to b~ another 2  the Cenlral ·Bank of upaUaa, for 4•U.••17 •• Jllarch 25.  Of \hie  1, eol4 n,71'0,000 ( ,o . . luk of hc'Jand) oa Karch 19 an4 20, and 0011Uaud.  lo be a Hller of aterllac aUl .A.pril  5. !t.•  aal••  11p  to llarch  29  ezcM4e4 lh• a\erl1DC \oup\ from lhe .lrpn\iae Bank a.D4 were utproT1ded ~or l,J' a fvlher r•l•H of pl4.  ~• lonq lllplo7e4 aceout at the u4 of Ille ■illleD (!able  7 >.  lhie UM vaa rialq u4 al \he u4 of the ■oalh reached.  4.19.  IIODlh . . . lhere'bT re4uce4 lo Jut  OTer  t6  alaallac offer of $:,1'. 77 ••• for \he U• 'belac  DO  l\erliac ., the  hn4'•  loac•r effeoUn ln lh• Lon-  ua llallloa aarn\. 1 ftia alerllq fipre1 «iTeD an all oalculate4 troa apeclflc aulhorisallou. Federal Reserve Bank of St. Louis  177  acUTltl•• 111 \he alerllag u.rke, ha4 been of the tollowiac ln>e1:  1.  Pm-cha••• and aal•• of 1\erllac ,o etabill•• '1l• rat• a\  2.  Purdla••• of gold at  $34. 77 to  leTele 4•••e4  preTent \he London price fro■ eoinc to  a d11cout fro• lev Tork ehipplq parU7, vhlch, when aterling wa1 per1htentl.7  weak, bee.a. cenuiu ,tabilisatioa operatlona •  ..,,,-  3. IUnor lra4lnc operaUoaa lo COTer dq-lo-u, fluotuaUou in Purchaaea u4 aalea •4e to tac11Uate the traa1fer of  ~.  ~  $45  the  ■ arke t .  a1llion  roa Lolld.on to •v Tork bJ U111 Ceatral lank ot .u-genUna, of which the StabillsaUon hn4 parchaae4 about  45,750,000 or _$21,5()0,000.  On Octohr 13 1lerllac had been Jud oTer  4.19, the raace htween the  OTH'  \wo ca te~  4.19 and on March 30 U • • alao  hiac onl.7  fro•  4.17-3/4  to  4.91-3/ 4  fllll 1tabllU7 wa1 aa1nta1ae4 wUh the a1119'ance of 11lpport froa the h.nd which aaounh4 to about $160,000,000, aa 1a41ca\ecl bJ the following :t'igu.re1 :  Gol4 loupt tor •:a• al laDk  A/C  of !!Jlan4  !!.!!! October  Jaa. 1 -  13-Dec.31,1936 Jlarch 29,1937  $45,5()0,000  Gol4 loqht for A/0 1 A1 at Jule of !!fl•4  -1~.000.000  • ~,S00,000 ,500,000  $59,500,000  $104,300,000  leducti on in •11ou7 lllpl07e4 I! Account  $4,000,000  Ia order lo keep 11• ,ol41n I.oalon al le•• than $100 ■illion, the 7uDcl 1apor\e4 $20 ■lllion troa lh Aecoant A ln Dec•ber whlch were aol4 to the !reaeur7  earl, la luUZ7 , u4 1111p0rte4 to tbl United State, all Iha red of \ha ac,14 ln l Accout A to 'be hel4 in eatekeepln« by lhe 1un4. 1 9Pardlue and Sale of Qol4, G.I.A. • flle u4 "Purcha1e and Sale of Ool4 1•14 ln Satekeepiq• file . Federal Reserve Bank of St. Louis  178  ••  lraauctloaa with th• luk of hac• all4 \he ••th8rlaa4a lallkt Oclo\er  n. flr8'  13-1936 - March 29. 1937.  \ruaacUona oarrlecl oul b7 \he ha4 ln heach traac1 Dier .  \he hipar\Ue ~ • - n l wa• a u.le of  3,195,000 trance la  th• lew Tork aarket  tor lhe accouat of the luk of rruce on Octo'ber 1) at -..66-1/2 ceata per fraac . !hi ■  waa conYerted lalo pl4 which • • place4 u4er eanark tor lh• lank of  huce at th• lecleral leHrn lank of lev Tork lm4•r 1tu4111C tutrucUona coY1 • all tranaactloaa rece1Ye4 oa Octo1-r 15. On Ooto1-r 21 \he lud  purchaae4 1,000,000 traaoa at ll.~71 cn\a 'brtactnc Ua 4epo1U with the Jank of l'ruce to lhe ao■hal • • ot $6,000. an4 oa October 21 lh• hnd purchaaecl  S_d~? ( r=,~ f '+i,,v1,1,) 35 kilo• ("52,eee~ 1• Parle at 24,056 traaca per kilo ear■ark  la Ua J.ccout :a wllh the Jaak  a furlher  ~  l'nace.  1,000,000 aD4 \oqlll a h.rlher-  aa4 place4 lhla uder  Oll Dec•b•r  1'5  kilos  9  U purchaH4  ot pl4 at approzi-  _,el7 \be • - prloea. 6-14• troa \hH• a1110r operaU011■ ll1ffned 01117 \o open 1'1 •Control• accoula wUh lh• Jaak of haace. lh• h.n4 414 not car9 out &DT opemUou la  lllltll after the ••coJ Jreaeh 4••aluaUoll when it  ---------~-------~-----------------:--:-:---:~~=--=--=---=fr&J1C1  41spo••4 both of Ua aoll111al baluc• fn trance aid 1h nall gol4 hol41ac at the llanlt ot hallcd  Ko-ftr, U 4eaU ac\h•lT  ~ eol4  thl lank of Jruce, 1ell1nc gold fro■ Ua ova llol41ac• •'  ln •n York vUh  $35 plual/4 •tor  1...dlale export or ,o be held under earaarica aJl4 'baTliac &Dl4 .a\ $35 le•• 1/4 which vu 4el1nre4 \o U "'7 \he . _ of Jraac• ....ral leHrn leak of lw Tork.  fro■  col4 earaarkec! at lhe  !he leak of huce placed all or••' •f  U.. p14 \oyh\ fro■ lh• 1u4 ln \hal accoul.3 !heH p14 operaUoaa la Sn Tork 1 -..i-. u4 Selllq Gol4 aD4 lllnr--~ ot huce• tile. I 0a So.,_ber I. 1937 the hn4 eol4 12 kilo• of p14 la Parle at 33,C-JT" traall• per kilo u4 2, 71'0. 000 fraao1 al 3 .lll-1/li ca\e. "Purcba H an4 Sal• of Ool4-&114 •JuTta« aa4 Sellinc roreip bch&Jlge--laDk of hue•• file . !hil ia taterN4. lhou14 N checa4.  G. I.~.• file  3 Federal Reserve Bank of St. Louis  179  ,... • a aall --.le arbc U. ,-rS.N •f n.M.l1'7 ta Ille baac fol~PC a.  tint lnalallou ..._ tMN  ~ fd Jlraace  ~putlte  fli..-u  an lllltoaW la •'18  lo U. etller, wll1e1a  n&t 1M  1'eN  14r11 ■ 11l  felt Ille IIN4 et  eldfta fnll w  g .  as.a .\le UN Ml  ftJ:I •·  •lac 1M fMlllllea attonM. 'ir ••  lo naiat .., etnac pna._.. • hltla  dta of 1M IIUbl  B  ti.. fhM !a .., Unclloa.  l  lo14 Sol4 h lb luk ef h ...• .... .,.,,,_, flioa lla lanlarb4 .UOOW.\--0010'-r 1.3, 193' to llanll 29.  1937.  mi  loll  Octo_. l}-SonalHtr 19 OnoNr  Oc\e)er  5,145,000 1.016.000  Z2  24-26  2,314,000 ,  lm .  '-,..J/1 d'C'O 11'/, ot.>~  '7  ~  :::12!J  221.000  3,102.000  a.nhlO-ll  0a l>e11■Nr  16, tu •c.a1ro1• .-oa\• et ti.a  ~ vi~ Ille ••llle?'laada  kak wen .., 111> an4 troa DN•'MT 21, 193' to h ~ 10, 19.37 lM hat aol4  $31,996,000  la  aou  to  u.. • . _ .  of -.U 4&117 aale• of mural•  111'1 nrl •  • II llie  _..  a uriu  u.  h'"9.JT  Wllallft ef  u.  15 1'T Ille ..,i..rlaada ~ . •turlaau laak 1lll1ell  Deualalr 17 wllll 1M Jeclaral a.eern lau ef • • Torie lo _,. ._.11•" etdYaln\ of 10,000,000 piU..n I... ner la ezelle•p for p14 to  N 111aNt 11148r earilark.  !lla  ~  ..  m..._ for ,._ -.u1,ftlat et 11P  1 ~ ... lol4-.:a.J.. SpNlflo Jdhorlu.Uou• tlle. Federal Reserve Bank of St. Louis  11p -  •l•• wllialL ... t a t • ~ ealT .... "7 a uall ·  puallaae of $100,000 la pU. la • • York •  ~ - eal.N wn Nga .,  ft1a ..,,.._ -  180 lo 25,000.000 pll4er1 oa Deca\er 31, 1936.  at tilt.a 11• wldch le4 lo lbe•• coanr1loa1  J~- c r :--'  I flt  1M alreqth ot Im h\ch eznbeap 4ollar1 • • abare4  'bF Ille artaa  -  fnae aaA alto \7 Ill• ptttlr aa4 , ... •ollar.  lolt . . . MYN , . all  et a...  oo•lrte1 aa4 create4 41fflcv.lll•• la Ille a4aialalra\loa of lulr 4oa1lle  ere411 poliq.  ho■  Aacul lo Deoeuer 1936 \be Valtel lb.I•• M4 receincl  $500 alllloa la pl4 u4 •• a ooaaeqmace oa Dec•••r 22 \he fn&Rr7 aaaoacec!  ....  a plaa tor prenauac tvlher eol4 t.apon1 trea hanac P7 effect oa lb• cn4U  C.  Gol4 !nuactloaa of lu hll4 wl\h Ill• O...ral freannr: Octo\er lJ,  ~ · 1937. 1936 to llarch 1.  hopoee4 1aJec\e4 Plaa for lb• V.e ot lbe l\a'blllsaUoa hJMl lD  r  0o... cuoa wt ua lh• Ool4 8'ertllsa'1oa Polle,.  -.,.17 la Deceaber 1936 a -ber of aacpaUou nre Ille !naaU7 for the ue of lh• l\a'bllbaUoa hD4 alerlllsaUoa pollq.  u  put forward. la  ooaucUoa vUh lhe  II waa propoae4 lllal \be ha4 ehould acqllire gold. ama4  'b7 oonerllac 1'1 forelp uchanp aotv.1a11lon1 lalo "111oa aa4 Iba\ Ulla I014 ahoul.4 N I014 lo Im General !rea1ver who wv.14 aol 4epo1U pl4 cerUtlcal••  -•r  1-ll wul4 oblala fu41 • wUh Ul• Clol4 C.rUfical• hal 1D lbe uul 1 ~ 4ele119' plaa ••• alao elalaorale4 la lhe aale ~ Nevi 11•• la Ille aaral • ])eJarl..a\ u4er vblcll all laponecl &014 9J>O• Ua arrlftl w1114 be  ltT  lhe 8\a'btllsalloa ha vUhoul paaalac lalo Ula  ■oMt&JT  lhea N aol4 lo the General freaaarer la \lie ••• ~ -  lac •W wlll4 h eo11ple,el7 ••cncat.a  a.  fro■  tu  2  ON41'  purcha ■e4  gol4 dock aa4 wul.4  la Ihle WT  lu  lacoa-  •7•'•• u4 the preoe4ar•  lta,tllsalloa hn4 wo1114 llaTe been rather clo1el7 a11lallate4 lo lllal of of C. ». Vphaa 4at•4 Decea'ber 1. 1936. •I•cl1n Gol4• tlle. 1 1 Dalalle4 teclmical Maoru4ma prepare4 la lh• !n&A17 4a\e4 Decaber 7, 19)6.  et  .._raal•  •Iaaoll Te &old• ft le. Federal Reserve Bank of St. Louis  181  IM _~llah Kxchenge lqaall1atlon 1  . . . la effect.  ~  •• 10111 u \he aterillsalloa pro,raa  !he alternaU •• ot 1l11pl7 hanag th• laeoalnc gc,14 parcllaee4  tu haeral !rea1urer  and •ecr•gate4 in u  lnacU•• accoa\ ia..-olnd tar alapler  procedure but b7 u1e ot \ha Sta~illsation rWl4 •go14 operatloaa of the  tn,e• would •appear in the  accout ■  ■ terillsed  la a mner •••111' lo be 4hUncuiahe4  gold operation• of the tra41Uoaal aor,.• 2  117  fro■  ho altenaUTe aetho4■ of procedure  were •labora\e4, one la•olnnc th• purcha•• of lllJ)OM-4 col4 b7 the Stabil11aUon hn4 an4 1\1 aale to the General freaam-er, aa4 one ln•ol•inc the purcbaH of  all gold, laported and 4011e1Uc,  of 1utrucUon co•ei•inc  th•••  'b7 the S\abllisaUon had.  Detailed letter,  two procedure• were prepared for despatch to t he  federal lea•"• Bank of Iew Tork and theSa.perlateadent of the••• Tork A11q Ofti ce and the Philadelphia Nillt and a letter an4 a radio  ■euage  were drafted  requiting the appronl of the Prealdeat. A further general t••Uon concerninc the tn,e ot gold traa1acUon1 which 1h.c1:. 0,./  pa•• throu«h the Stabilisation JUDd 1rre9))8cl1•• of whether . . cc,ld 1\er111sat 1on  pol1c7 wr• la effect or not va1 ralte4 in \he 'fr••aur"T in the covH of thue dlecu11ion1.  On thh point llr. Tiner reco...aded to the Secreta.17 that:  ••••the Stabilisation 1un4 operation• 1hall be confined lo traa•ctiona which clearl7 affect either tore1p exchange Talu• or the do. . eUc 110neta17 81\uaUon. lor thil reaaon I would laTe the followin« clauea of gold trmuacUon,. and tho•• !!!z, throu«h \he Stabilisation accoate:  pa••  1.  2.  Purcha1ea of tore1p _,14 and aalea of eold \o abroad, whether or not th••• operation• are aur111se4. Pm-chaa•• of 4oae1Uc gold, if theH purchaaea are 1terlllled, i.e .. if no gold cenitlca\81 are iHud to P87 for ,hea.  It Iba frean.17 ahould in \he - . r future at UT U • 4epart fro■ 1'• pollq of eterlll11q eol4 aoTeam\1, whether do■eatic or foretp, 11114•r lti. recoamendaUon I here aake, 4oaeatic eo14 traneaeUoa1 would aol affect the ltablltsallon accomita.• 1 !he Britiah hD4 pvcba1ed. all lacoain« gold with aterlinc obtained fro• tbe aarbt b7 the 1ale of frea111J7 b1lla. 2 Xeaoraa4u troa llr. flaer to the lecreta17 J>ec•'ber 19, 1936. •InacUn Gold• n : Federal Reserve Bank of St. Louis  182  .... el .... »nPOula . .  Mhalq ,-t lah effeot, IIIIWNI', at  I-•  Ila  - - . _ INnl&rT .-rwse4 IM laa1tcvallea et 1M aterUlsalloa pellq la  a.  Illa . . - . nleue ot ••• i..r 22.  •lllpl.7 taaina,e4 to !Nanr7 Ille  Ml..,_,  193'. S.1.U.C Coli lo  uov  eecnp.l• ..  noh baotlw  flt  baetlft p14 la  u.  1Ja1M4 llale• _.  •••ffal hl4 of tu  all ,:014 NMlftl 4al1" • all4 after  NNlft4 al  eol4  ~ of ,i.  u..  •14 Tahe ef  Hparal•l.J' •  lla)111'1•• la llw fre&nr7 u4 lo  Jla11■!Nr  t20.,11 per tlM  2),  nace, ....  noon •f olaaaitW. ....,. 111114 Ille fora .r U. aau,, ~ nate-  Jd.a  +ea,p  •at . . . . to MOW Ilda Saaollff fWll4 Nparatei,, tNa ,_ tne plcl la , _  worklac llalanee ot tbe Geuftl. ha4.. 1 11 _. aot atU Oelo'Nr 21, 1937 . . .  tu  obnaabaoea wre ,111,e Uttenat, lhat Ii. lta'1U.sal1oa h a d . ~ lo -/all lapoftN pl.4 .  )nlNJaaM trOII IJle hMral ~  .._ Iba pld at.rlllsalioa poU07 w.a ~ I N Ula lla)llisa,toa hll4 a1naq bell  wllia  $167,128,ooo. os- tov-tulu  •u7,1'07,ooo aa 111114 adar  fd 1,a ut1w uana ta pld, ot  -.nark at  u.  ~of-.., •.,,.  la a441t1oa  to 11• U&YT pucllaHa 1-41&,el.7 after ta bancvalloa of llll !r1parllt•  1.#••  1:at ii lla4 a44e4 to ila alOok a tv\M~ $20,791,000  1v a  paN)laae  IM haeral hee.nnr 1111Cler I • lulneli- la-4 oa Sepl•Nr 15. ferelga  J"U'OU•• ooallaM4,  v  1M a4  nl laTlac N41loecl lla &014 ~1A1ap oa '9tleve (Cllalt3'  ll anupt to lapen $20,000,000 troa lta  •z..nt.,.  M 11•  1M hll4. __. le naell tu. plcl to Ille 9eural  heuuer, 41spoatac ot $116.500.000 la tll1a 97  1  2  troa  .unan ~ al  ot Sona'Mr wlla-  ).• la Deo•iber  ti. leak et  •claM_.3  h14 1 tua.  z ... ,... u~ .J Ille -14•ra,1ou lwS•c  '° ,._  1apor1 et 1111• troa MCnat .1 s..,..a et Ina MOOllllt • an glwa la a frMnr7 ....oraa41111 la llr. Dtelrlo!l'• •lldlllsatioa hural-anaber--Deoaber 193'• tile. Federal Reserve Bank of St. Louis Federal Reserve Bank of St. Louis  183 :  CHART IV  184  fhi• eol4 ••• aol4 lo \be heannr earl.7 la lulla!'7 •4 1h11, logetlwr •Uh  1M Jara- aalea to the ••t:blrlaacla laak, ltrolllbl tu hll4'a pld dock Mlow  tl.20  lllllloaa 1-7 lhe ■lcldle of lhe •ath.  l.ecltul £ al Ille Jui of  -.1.aa,  -  Iha ea4 ot •rch all Ille ..  D.  la  ha4 1-Ma bnQ&hl laoa• to lte hel4 ta aafeteep1ac  'b,- Ille hll4 ud a further $20 ldlllou ot 1' ••• •ol4 lo  aor• appro&CM4  u  ,11e  fnaaunr.  ~or.Ip  $170 111111ou ( CMrl IT) •  11DlllaJ7 of Gol4 !rauacUou.  fb.e gold lranaacUoae of lbl JuD4 tor Iba period be\ween October 13. 1936  au  March 29, 1937 a&7 'be •mimari•ed. •• follow,:  1oup,: lank of hglaad  ~coul ~ ($34. 77) ~comat • (Conlrol accout) ut  1  $lo4. 291,000  $163.920,000  59,629.000 $163,920,000  -  Sold:  luk of ~ranee (net) ••lh•rlan41 !Mk General !reaaurer (Ml)  IDCrea.. calC11la1•4  fro ■  lpec1f1c ~uthol"i•aUoaa  Increue a• ahowa b7 weklT 'balance ahHla III.  fh• Second. Ool4 Scare: ho■  • 66,07s,ooo t 66,346 .ooo  _,rll-Jue 19)7.  April lo JaM 1937 lh• true • • weak u4 colcl left hue• in iacreaa-  lac aao•'•·  8- -'Prll 10 an abnol'll&l ■ itaaUoa 4eTeloped in .-U.Hl• that threat' eut h 4larupl lhe 4ollar-belga exchanp aarket. Gold caae to lruuela although  1M elerlbg-'belga rah 414 aol Ju'1f7  f!l4 upon polat  fro■  '°  u. aDd 1  the rale • • a'6w  lnHela lew York. !he •uonal ~ k of 1ei,1a O.ble froa Loai• lrank, OoTernor of lhe •auo11al Bank of !el.du to lhe Yederal leaene Jule of lew York of jpril 21, 1937. •J-q1nc aa4 Selling Oold-latlonal 119.11k of lelgta• file. Federal Reserve Bank of St. Louis  185 lllerefon lnqa.lred whether the l'ed.eral •Hne lank of  fna ll tor lhe aecoal of plt.a tllat la ap lo  'fi•• of the  tbe h . . 8QJ7.  ••v York woul.4 b1Q' p14  to thle lhe '•4•ral. hHn• Jaak n-  411tvbecl co.U. Uoa1 ot Ill• excb•npa 11  111D ul4  pvobu•  $10 alllloa 1a lelci• a\ $35 1••• 1/'4 leH ala\ charpa 1ubJ•ct to \he  111Mleralucl1ac \hat the gol4 woul.4 N alllppe4 'b7 aa Aaerlcan TeaHl ,► 1,,ea  • •  t w 11 'be  Allerieaa Te11el u4 would la• avaraatH4 trff tor apor\.  fhl•  ofter waa ao\ aTallecl ot al Ihle \lae but '1l• _,,er waa acala rai1•4 b7 the lelciaa leak ln Jue.• ln llarch ud. •ar'-7 la April two large aa4 e%cepUonal  pld ao'NIIG\a l ·o the Un1'e4 Ital•• bepn troa luHia ud Japan. llr. Lochhead of  \u  kr'-7 la April  lla'blliaaUoa lad a4Tiae4 Kr. fa7lor that ha ha4 noted  that gold. eapgeaenh tor ahlpaent troa London to lev Tork ••r• euepUonall7 large in relation that  \hi■  '° the TOlae of •xcha.n«• trauacUon1.  •• bad a,cer\ailled  ••• on accoua\ of th• otter of h11lan 1Pl4 on a dollar be.Ii• which  va, be1D« boaght u4 laporte4 b7 Tariowa lew Tork banka .  fh• Bank of :Incl.and  contlraed \hat \he7 were aware that the gc,14 wa1 ~slan and when lt arr1Ted U wa1 found lo bear ~llan alnt aark1, bein« apparen\17 new production.  It  va• dlfflcu1' to trace the actual ••ller 'but the proceed• were pald oTer to bank• of luaaiu origin or haTlag lluaa1an accounh.  BJ' April 11, $25  ■llliona had  arr1Te4 and a check of JluHlan balaacea ln • • Tork cliaclo••d that the7 had 1 lncreaaed. b7 thh aaoat . ~t lh• - • H•• large ahlpaot • of cold froa Japan ·- · ~.,l were arruced and th••• were, like the luaalan 1hip11enta, cloa• acrutinised b7 lbe fN••V7.  Jlecillllinc ln llq each ahipMnt •a• adTiae4 to the  !r•••UJ7 b7 the  1-,.lle•• lb.roach 4lplo-uc channale. 2 hi careta.l laquirlea were aade •• -to  f1D1!0••• at th• 1hlpaen\1.  OD Juu 2J, for ezaaple, Jlr. Araki, .&pat of 1 llellor•4• fro■ Jlr. Lochhea4 to llr. !qlor. •11v1~ and Sellin« 0o14• tll.e. 2 I., Ir. Utan, Tork, acUDC upon lulrucUoa■ of the Tice •tniater of 71uace. •ao14 troa Japan• tu... Ille Federal Reserve Bank of St. Louis  •~w  1M lallk d hpa la ••• Yea, -.JJ.a ea llr. 9prnl d Qe h4eral. ........ . _ ., JJew l'ork ,. •'-'• Uial Illa  lQWM Wft pJ-•ac , . allip  250 wlll loa , - et  1911 la _.ia to •• Tork. aaktac a tnal d aeal.  uw n a •re  lb-. lprnl Ioli II!' • .uakl. U.1 11 ...  u. ,..,  to  DOV Ille NUOU  a hriur ,, 11Ulloa  for lllla uli-&I 1111d. , . . 1'  \Ille wrHal  ••a=  iaportaat Ulaa la  ...u. -  'lllfonaa,.  1f ti. lapnsaioa ac,I a:ro-4 lllat Ja_t>a ,.. emUac p14 tar Naaaa aot aoweted wtlll Uae  J~•• '-looe of papeata.  9-N w  a \M7  •f ep1aioa  ol!Mtr oealral 1-nD ahnl4 tab lulr allan 1a a'.honlllc pl4 n.ppllu.  ,1aa,  to \ab  llr. .uak1 npl1e4 tiMt na.eoa _. a Nriou~ a4nN• llaleaoe of lrad.e 111dea • • 1111tvelo098 lo  tu  JapaaeM aa4 tla&I  oal7  ueeaa&r7 to MUle 1aleraat1oaal aooo111a\a.  nu.  a!d.19111\a wn ..._. aa wn  llr. Araki la41oaW \laal  u  w1aM4  lhia 1.atonal1oa lo re&Oh IM ai,propr1al• ad!lorlllea aa4 llr. Sprnl forw.rdK 1 aa aocoal of U.. ooll'nraa\1oa to IM fnanl7. fhl• aplaaal io 414 aol  •llnli' ••' al res\ Jaerl.oaa dou\1 oa  lu  1119.tloa aJld. llae oovae of JQOe ..  •laacff 1A hv York ,,._ pl4 •• oow1•c la w.a late w17 earehll.7 w.toM4 ..  B7 -.,. 27 • 1937 Ila htal aaoal IIOU\&J'7 plt alook of  tu  lioa polic7 W. nacbel  O'f &014 llla1oJ& 1aa4. .._ atu4. lo IJle  1Jalled. S\atea alaoe  $732  2  llilllau aal  ,i.  ta hcfsniac et  1M alerlllaa-  lid phnf 1A 1118 Iaaclln Gol4  aoenat -.a $730 .U.Ueu _3 1M •nerpaoe of pU. •  1M tlal\d IW•• troll  all .-ari•n p-n rlN lo naon Illa\ lo U.oomrap thia &ft&I ldlow Ille  ~rea.av, vnl.4 1o..r 1,a -,UC price.  aoa...-117  ~Ince eppertaltlff  epeMl 11p tor aJaipaat of Coli. to Ille Val'-4 Slal•• lid.all ..,,_ flt  -4 a nklaatlal  •41...,..,•  ••em  wen aot bkaa ...,.__  troa • • Tork 11dpplac parilT appeani la  le.ak flt Sn York lo ti. fn&av7, hlM 23, 1937 - ' S.lllllc Gold• tile. 2 0a DNa'Mr 14, 1937 Ill'. Kaob et Ille ia. .rai -. laak of•• tork Npene4 to U. heenl7 ,-., 1M wre lhaa •lac pl4 to h.114 11p \alance11 ~ Mt le ...,.r nneal ,pe2-a,1oaa. llalloraat• troa Jlr. i.ntahoa4 lo llr. llorpdllau., -.,..•• lla\Ulsati.ea• tU.. 3 J1eao fna lfr. Li'ltt \e Jlr. Jlorpa\haa .S.Yiac a • · poliq of Deceabar 23, 1936 to ~ 27, 1937. hU..  1 S.llar froa IM hural ~ Federal Reserve Bank of St. Louis  1....-••  181  th• Lon4oa price of «ol4 ta April wlllch perelatecl for llln• aontha.  fhh •Uaa-  lloa ~ - Ter7 proaouce4 la Jw whea tu 411cout reache4 7-1/~ u4 Ille alpatloa ~ 1ebruaJ7  1934. which laaa \een 4••cribecl •• lh• flrat •gol4 aaare•,  •al••  aoderat• in uout and in liq l\ • • pracUcal.17 4oraant. !he ot aterling 1 in London begun on March I coaUmaed uaUl .April 5, u a4d1Uonal $1,061,000  ••r•  la gold beinc releaHd froa earu.rlc 1n London  un  fro■  _________,,  AA~ .... ~~ Wb' 29 to Apr1 l 23. 1or the  two •••le• tba ~ • • aterllnc lr&AaacUou, on both aid•• of lbe aarlcet,  ••ulted la a net purchaH of gold la Load.on of about $6,50(),000.  .All of th•••  tranaacUon1 ••r• paned thro~ '11• •coatrol• account, accor41DC to \he uaual routine, w1 th a fn  4.94-3/16  OD  jpl"il  ■inor •xcepUoa,. 2  ~ugh 1terlinc ••• 1tron« and ro .. to  30, the relaUoalh1p of  llng-d.ollar rate ••• auch •• to •le• the  the LoD4on •rleet price to the 1\er-  had'•  atand.tac offer of $34. 77 again  effecU•• and $2J ■1111on1 la gold waa boucht at ,h1a price and placed under ear■ark  ln Account A at the  General 'l'rea1urer.  ~  At thh  of Zn.gland..  ti••  fhh waa all iaportecl and  the 1un4 waa  ■- inc  101d  to the  amaeroua ....11 1alea of gold  to the Bank of Prue• and to the letherlanda Banle, but theH •ounted in all to onq about $3 ailliou.  !be le\herlanda Bank •••  riee of the pilder in. lew York. Bank au\horhiq U  rate of  ,o ••11  54.S~ or better,  11p  to  al10  read7 ,o check  &D7  undue  On jprll 27 U cabled \o the lederal ReHn•  25 ailllon pildera when the7 could  and renewed \!»1• lnatructiona on •11  30  make a  and Mq 11,  rain-a lh• U.111\, hawenr, to 54.SS aJMl 55 cuh reapecUTel7. l\ wae not Wlt11 Ju,e ,hat the difticulU•• uauall.7  aoare• \ecaae acute.  Gold va• aorlnc  4e ■ cri bed  ••  ,u •eo14  haan.17 \o London ud th• Jr1Uah hD4  vaa called apoll to abaorb nr, large uouata.  If U took 1u!ficlent gol4 off  th• London bullion •rket which o\hervla• would baYe gone to the United State, ,he lri Uah hD4 ■ i&bt 1 See page ··,/. •  ha•• forced  the London gold price back ~ Wew York ahippl!];;  2 !here vu onl7 on• aall purcha•• of aterling for conTer1ion into gold in .lccount I in Federal Reserve Bank of St. Louis  1187.  188  JtUi'7 hi 1' wul.4 ••• 4apr1n4 a\erllq et n.pport la dollar• wbiell, la tu eplaloa of the hderal •••rn 3aak et lew Tork vae MceH&J'7 to aalatala  al lhia • • • ' tace4 the lwo fta'~lllsaUoa 7ml4• wa• 4eacr1\e4 aetollo•• in a  -•ru4a prepared  lr  Jlr. hoke of  Ill•  ~••ral B•a•rr• laalc of lew York oa  Jv.u ~:l  tan  all Ille pld ottered la Lond.oa lhe7 ~ aucceed. la k••P1DC \he Lomoa pl4 price u4 al10 ,11e 4ollar-1terl1nc rat• ele&Q' al lenl1. ftaa\ 11 Iha bee\ \u7 cu accoaplhh.  •It Iba BrlUah  pr••••'  If, la order lo ral" \be cc,14 prlce la I.olllloa aa4 'briac U cloHr lo ... tort par1'7, thq 'b14 aazt•Hl'Hl7, the7 will, '7° \heir gol4 operaUon, force Ill• 4ollar-1terllac rah 4owa. It. la orcler lo offHt Ihle etfecl oa the 4ollar-a\erlla« ra\e, th97 aak• ua• of our arrup•nt Clo lh• 4ollar1 apiu\ eol4 la Lolldoa), n woul.4 1ll.U.11atel7 pt \he go14 AQ'how ( al $J4. 77) . -  cl••  It wen., p14 aar•Hinq la LoD4oa al curreal price,•• aq accoapll ah wbal lh• Jr1 U ah ca1uao\ acco11pl hh 'b7' p 14 ope raU 0D1 alone, \hal 1• puh lh• London gold. price up and lhe ••• U•• ■a1ata1D or poaaibl.7 enn llfl tu 4ollar-•l•rllac rate.  a,  •• wlll, ct coa:r••. acquire large •out• of gold ln Loa4on but aot aeceaaarlq aor• lban the Brillah woald gin u lf \he7 foud. U aec••N.r7 lo 1upporl ()7 MkiDC ua• of Ua• arruc•ent *hq ha·n with u1) \he 4ollar-aterllng rate it lt wakened a, a reault of lhelr b~iac of gold la Loa4oa. •  aar•••l••  !he British au\horitl•• 414 la tac, .  offer lo ba, gol4 fro■ th• al $3-. TT  tan  adT&Dtap of th•  hnd.'• ataa41ng  '° ,he uleAI of $63,000,000 la Jue, 2  aacl oa Jue 2~ ,he ~ ••l•re4 lhe aaral to ln~ eterllac tor connnloD into  1 llr. Dletrioh'a •Gol4 2 . .,1  -  1-.a Federal Reserve Bank of St. Louis  9Qe  1931-1937•  file.  I ff pace :- ,, 'l - t aGtte .. ..;, _. •  189 pl4 la ,11. l.o114on bullloll aara\.  IJ.93225 01111ee.  lo  IJ.911225 u4  1  4! vaa  boqbt 1D ,h11 ft7 a\ fro•  coner,e4 into gol4 at froa lltoa 6-1/24 lo llloe 101 per  2  la  ,1ae •uwhil• \he  reappeared • • on Jae  5  41ff1culU•• of the laUoaal laDk of  lelcl• M4  \he7 agala a4Tl1e4 \he 1ed.eral le••n• lllak  ot lew  York that \be 'belp vu at ,c,14 upon po1at froa lelcl1111 u4 aaacl \hat the  acr•• to am ihe firat ot Hrl•• of ahlpnnta of pl4 pvchaae4 '7 IM ha4 111 leJ.«1 ma for •al• ,o the  ananpunt propoaed 1A jpril •  a  renewed..  fhia waa  General !Naiver vaa eh1ppe4 b7 lhe I.I. Prea14at llarclinc. •cnm\ecl \o  fhla ehlpMnt  $5,227,000.  In a441Uon \he Bank of lruc• • • a net ••ller ,o the hD4 la 1'1 eol4  aol4 Dall aaoaata la jpr11 Mca• a 1ubataa\lal lniTer la Jue. Aa \he 71UICl accaula\ed. gol4 mder eanaark a 'broa4 U pTe laatncUoaa tor  \he lapor\ of \he greater par\ of thll gol4 aa4 11&4• au.'ba\all\ial aalea to '11•  General !'rea1urer.  !heae aaoute4 1A all lo $96,998,000 la Jue.  !'he go14 traaaac\lo•• of \he hzad 4v1ac th• perio4 jpril-JUM  1937. mlch  ~  laclad.ecl alao a aull purchaae  fro■  \he lank of •stco, aq be auaarlsecl ••  followa:  l !he t rauacU on wa1 paHecl throach \he hB4' 1 lo. .3 account a\ the lank of lnglaa4 bu\ \he price at which Iba coaTeralon wa• \o N oan1e4 out la a\ate4 la the lpeclflc alhorisaUou &ll4 tbl lllfereace ii \bat cc,14 uL\er theH orclera • • parchaee4 la th• aara\ anc1 aol fro■ tbe laak of -.1u4 a\ U1 4all.J' qaotecl price uur the !rlparUI• Jcreeaal. la W...1ll U11• an,:. ti Zaeh t lie.I 'hga.  ,. 1ach ••• UBI pile• .... ~a,, ..... 111u. . , . . . ·•lee h4Jillg . . . . . _,d•h •• 1Ulur Ille •• tiltle Lea4oa w1kel. prlee ••• tllielr , . - . .. , Hi 1ail:191. . 2 "Pvcba••• of S\erllag tor CoPerlioa lalo lol4 • fll•. · 3 la a -oraa4a \o lb-. Cochru fro• lb-. D1elr1ch 4&\ecl.bpal 24. 19)9 Ille tollowlna a\at la Md• concen111g \he rea1on1 tor Iba pvchaH of pl4 '7 ·  •n.  the had. fro■ ceatral bank• aol •-•r•• of \he !ripar\lte .AgrN■tm\: onl7 escepUou where lh• ha• purchaaed &014 fro■ o\her \ban friparUt• ooaatriea 1a vhea on a S.llU"UJ a aoa-hiparlU• 001111\17 wlahe1 to aell gold. u4 th• .l11q Office la clote4 \he 1un4 will aak• \he purcba••• or the lederal receiftl \he t.aatruc\iou loo la\e la the 4q \o \he 4el1n17 lo \he .uaq Office the 1u4 woulcl parchaa• th• pl4. • Federal Reserve Bank of St. Louis  •ak•  wh••  lncJtl= •t Jllc.1 -4  ~  ..... .,_ ha hoa  f105,IOO,OOO  •.000,000  Menal .& (Ht.)  -  19,a:>o,000  - - - , I (C•trol aoenal) \lie J.oa4oa a.rat U.. a.tll.erlaah i.ak (Ml) 1M ._,1oaa1. Jaat of :lelp, .. Jaat •f 111%100  13,712.000 5,221.000  1,125,000 tl.29,,,  • 7,"5,000 • 1,500,000 Oa llae 21  n. »r1,1a llnh•B&W  ~lsatioa  .aoeom •c loh,  193' lla4 a'-torW wltll lhe ...1a1aaoe of U. la1lk of  •.cl••  la p14, wu pd la a p0a1'loa to eodlna 1'• ,-rcha.Ha d  . . ailltloaal ~.000,000 la heanr7 Mlla.  rmn of  aa  Sa.r;,u4Sac p14 rnahalloa 1a ,._ l1aJ.le4 sta\e1  aNd ~.000,000  pld. 1lr NNlYhg  •n .., al real  •t •v Tork lducll Jlad.  U&J'Il1' 4v!ac ,ia. •eo14 aean• lllaeaM4 a&a1JI.  Dv1ac ,i. •p14 eoan• \he •ructll traao-.. v.du ha4  ~  M 1'8 ellll of Illa 110d1l a1ao 11'8  aa4 tonlp eol4 eanaJ'lcbp al 1M hural •aern laak  uol.1-4  atw  •cu  to 1'IIT traaca la  ,aa  •n York  aarat  .._v pre,nre  aad the  for Iha a800111ll of \he laJlk of  haaoe. ~ - - hM 9 all4 2'. 35,650,000 h'aaaa wre 'bnchl •' rat•• raaciac froa  'JJ,.4r;,-1/21  per fraaa le ~.i.6-1~. lNt 1a 1M lul tUN 4qa of tu .alll  ' lllllloa of lllieH wn Nl4 al tr• i..116-lP. to a.."6-1/2.  1  0a  nu  ~  IM Dnal.11&\ioa  JO,  rnr, l!al al\eapt le lloli ti.  traao al the i.wu 11a1\ ti.D4 .t Oele'Mr 1 aa g1.,..  aad. tlae ..,...allet •n•llac" or •Jtowt•  11p  Jlltw-  tw -  tatnla11l~ 2 IJMtnafter 11111 had noelft4 kllT onen to 1"Qr aal  {!-a tu  1111 Jaat et haaoe la llrit l 9Yraae1 lnpt aa4. Sold for a / o ot 2 Clliaok. Federal Reserve Bank of St. Louis  •ev Yon: ---'• _ liik ot Jtraaoe•  tU..  •ii  I  IT.  aoutla• Operation of ,11a hai: J-oq 1-0c\ohr ~. 1937. i:..- u:;.· ~ ' / . . t-- ~ J, ~ .f,"""~ Ille aappori clna ~ 'uie !au of ha.ace lhroagh lta lra41a« openUoaa la -  r  . . . Terk 8114er th• friparU\e Agreuent ••• aot  ••J'J' eabatan\W and vaa lud-  tloleal to prenal a cra4aal declla• ln the ra\e.  Ue la,enenUon 1llutra,ea  ,be effec\ on exchange ratH of otfic1al npport ln a •rnt ln which \he under-  l7lq trend 11 weak.  fhil la  ~  ·  ln !a'ble  Ta'ble  i  ~  •1  Pvcha••• u4 Sale• of hue• th• Stabilisation hnd for the kcou\ of \bl laak of ha.nee llllz: 1-0c,olaer 1, 1937 (000 oaiUed)  ....  (ceata  luq 1-3 Juq 10-13 Jul.7 16 J-o.q 17 Juq 20-21  i..165  3,650 3,725  Juq 22-Aq.2 7 3,250 Sept. 13-14 13,100 12,600 lep\. 15-16 Sept. 21  10,200  Sept. 24-29  )Mr  3.72-1/2 -J .73-5/S 3.56-5/s -J.12-1/2 3-37-3/11 -3.37-5/S 3.162  Juq 13 6ha  York to ••11  Jue•  ( ceah per franc)  3.12-1/2 3.76-3/4 -3.74-1,/16 3.72  10,450 3.150  3.s3-3/16 -3.s4-5/s 3.s1-1/2 -3.88-1/4  12,306  3-73-3/16 -3-75-1/S  l~,loo  22,870  3.43-1/4  -3.1'2-1/4  Oct. l On  Sol4  franc)  -J.42-1/8  le\herlanda Bank i•tncted the Jedaral Jle1erTe lank of Iev  1,225.000  p114era ln  ~reeaant at 55.07 and two  a■aller  •ev York  for ii• account under the !r1ps.rUte  order• at 55.22 u4 55.30 followed.  n  Ud  ao\. haweTer. becou a a\eaq operator 1a the • .,, Tork aarket \hrou«h Iha ltab-  i:: ~ ~ t lon hnd.  Oil Seple■ber  24. 1937, 1,935.000 p114•r• were •old at 55.30 ,  -.t· ..tdclt--11au _.tha---cuil.4u---11aa---&l--U6 ..pld.•'--_fna .._ tu~ and tbe Staldllaallon 1wad. carried. oat •■all aal•• at \hh rate \etween October 1 1 9haaca loagbt u4 lold tor the a/c of ,u lank of 1ranc•• file. 2 Clwct. Federal Reserve Bank of St. Louis  u4 b•'b•r  3, 1937. It  _,11 llaro1l 1939.  1  of lbe prece41DC .April for  •"'-•had. va1 ••••n•  tit aol NlleY 1,. leall-ca la p114•r• 1a ... Torie  r•-4.  ,u pvchaH of  11p  lo $10 a1lllo•• la p14 ln ~•lgia  Ia MklDC the la•I r e - 1 . uwner, lbe re4eral  ~ of . . . York lacla4ecl  ta 1,1 ca\le lbe tolloWi-c o'baenaUon:  ••arlac la aln4 tut 001141 Hou la Ille ,o14 •rkel ..., ••• apln lo haTe beoo• practlcalq aonaal 11 woul.4 N of laelp to u \o haft 7011 uplala vtw la 70v op1111oa it would aol apln \e •afflcleat tor 7011 tor \he lecrela.17 of \he fr••1U'7 lo \QT \broqh 1•4•ral lank of ... York fl•cal .,.., of \be UaUe4 Ital•• lllPC)rl flu pl4 1-r• a\ $35 per f l • \ro7 ouc• 1•11 the u..i Jllat charpa an4 leH 1/-./, tor baaillag charge, •• anncnm.ee4  ·••r·H  117  Jll■ oa Juur,  a•  31. 193~.•,1  Ia lbe tolloYiac ••tallecl lel\er lo the 1ecleral leHne laak of ..,, Tork \he hUoaal lllank at lelcl• oa Jul.7 31 ezpla1M4 \he altuUoa u4 1114lcated \ha\  lh• acllT• tear• prnalllag 4ur1ac th• •,old  •car•• of JaM ha4 aol  eoapletel7  4le4 4own la hrope: 8  A8 7011 are aware. •• a reault of \he a'beleaUoa of lhe b&nka which proT1d.e our aarkel wi\h dollar• )7 of gold •l•• \o the aterlO&D !reaaur, wheD the ra u nachea tbe gol4-ezpor\ point • •• haT• recentl.7 been la4 OVHlTH to lllpp}T lo ,_ •rket the dollar•  •an•  cub■artq  UCHN.J7  ta aaoh . . " " ' .  •er••  U h tor Ihle reaaoa \bat we b&Te reqa.atecl 7ou lo \hat •• 4eli••r to 7ou eol4 earaarncl h ov la retva for 1D•41a\• and ftaal plac1DC \o ov cred.l\ ot the equlnlen\ at tu pr1c• of $35 per ouc• of flu ■-\al. l•aa \he cu\oa&J7 a:peue of ■iDti~ u4 1ti. per cat tor haaillag cbarce•. »T 7our oable of th• 13th lu\ut. TOIi ha~• 1Dfone4 u that it ,o 7011 that th• coa41Uou of \he aarat !lad \ecoH aoraal aa4 111a, \b.eH apee1al arr•ceMnla weN ao loDCer, ~•ref or•. aec•H&J7. Uator,uaatel.7, \hal la ao\ 7e\ \he oaae. !he arbUrageva of our arbt a\111 4ecllae \o ahlp pl4 to • .,, Torie vben the rate wov.14 perall U. n la for 1bat reaaoa tba\ tobT \he rah for \he 4ollu haa •  •aul'••  ••eaed  1 8Pvclla•• 2 Federal Reserve Bank of St. Louis  aad Sal• of Guild.era for  a/c  laak ot letberlaJl4a• flle.  ?=-~==:5~  ..TUCed lo 5.91'35 Nlpe, a1'hoqb U la poHlble to aecun 4ollara gol4 be«iulac troa 5.94. Umer Ill••• ooml1Uone, •• Nli••• Iha, 70G will ACT", lf Iba ,btac ahoul4 oecv acaln. ,o reMW lh• AJT&D«••n,, which 7011. Mn ..... vilh u recen,17. fhh pracUc• •"•• lo u eaUrel.7 ln ooafon-· .... with \he eplrU of lh• lriparu,. acr••nl, the ••nnllal al■ d wlalah la \o taollUa\e all tbat eaA 1>e 4ou la order to ••RN Ille U 11 clear tbal lhh reauU ou oal.7 " alab11it7 ot Ule al\a1M4 lf the ln\erealecl oentral iuU\uUoDa are exeapt troa th•  -1•'  •xchanc••·  toru11,1e1 iapo1ecl apon prlftle en\erpri•••· Ve ehall N happ7 \o learD 70v oplaloa on \Ille n\Jec,. Ve 4o aot loub\ Iha\ it oorrHpoD4a a\lreq vUh ova. 1' pea Vi lhoul Ul'iAC Iha\ whea the ■arbt will reauae Ua aorMl aoU T1 \7, •• vi 11 leaTe lo U the NSJ>Ofal bl lU7 tor C&ffJ'lDC ov.l arbl tra«e in accordaac• with lla ued.a.• Aa a re1v.U of \bu• ugotlaUou a fllrlher  t29,479,ooo  111 eol4 ••• \oaght  b7 th• hD4 1D lru1ael1 'bel•••n Jv.l.7 16 aa4 AQcual 3 ud 1apor\e4 tor ••l•  '°  the Qeneral heaav.rer.  In the ••amrhll• a\erlinc waa and. uTer fallinc 1-low  4.95.  ••r'7 a\roac,  fh• ha4 waa u  a\ \heae ra\ea and releaaed gold  fro■  rla1ng lo oTer  4.98  ill Augu1t  lateralUen\ ••ller of ehrliDC  Ua eanarkecl accouat a\ the laDi: of  bcland •• follow a:  Juq 9-16 .t.upal JO  •10,515,000  1.136,000  2,047,000 2 2,slM:>,000 -  lep\•'ber 17  October l  In ad4Uion, ou special 1\erliq \raaeacUoa waa carried. out. 'h• hn4 purchaaecl £300,000 lank of Ch1M.3  fro■  ,u  ~  On Au«at 12  of hclud and 1014 ti \o \he Central  fhll lraau.cUoa waa p&He4 ,hroach '11• lo. 2 Accowit " ' th•  othen wre haadle4 in accordaDIL,e wUh lb• roa.\lne of \be frlparU te .&cr•e. .nt.  OJU.1' one -11 purchase of aterllJI« for 00Per11on into gold in \he b\ullon  -cl• 4vi  t•ber ) . !he lv.1114 bowffer, ,000 oa ·r1o4 ( .,1,aa1· 111Ter--Ool4--lel,«1U11--. ancl Gold Selllag _c,1oaa--Ba;r1ac u4 a.k ot Jelgt.aa• file. of Ool4--G.B.A. • tlle. I "P11ra&ae1 ad. 3 ~wtlon1--JuTing and S.ll1ac lonlp Jxcbanc--Sterllzac--Au\hort1alioa1• file. I ban aot 1-en able ,o tlad Iha naaon for \hl1 tranaacUon in the flle1.  IIUDI ... Federal Reserve Bank of St. Louis  Sal••  1h11  ooallm4 lo accuaulah p14 1a U• Accou\ A al lhe JuJc of Wnclalld al 34. 77  pu  eaoe pvol:aaalag  la all ~ ■llllou at Ihle prtCM, of which abov.t  wo-  tlllrta • • boqb, la hpt•'ber. fte hD4 ooaUau4 •• ltefore lo aell go14 to the 0.aeral ~•a•ver •• ti vaa accaula\ed abroad u4 cradual.17 laporte4, ltul alao lto"Cbt pld froa hia  for  •al• lo \he Bank of Chiaa. 1 !he eolcl lraau.cUo•• of \he h.n4 during '1lt.1 perlo4 of relaUTel.7 routine  operatiou (Jaq 1-0ctober 4,  1937)  1187 be .....r1sed •• followaa  1ovp,: lank of Jacland. (ut) Accoaal A (Boucht) LeH Acooul • (lol4) In Loadoa aarket 1ro■  •uoul  .~.000.000  6,.750.000  17.250.000  2)0,000  29,479,000  lank of lelgta  l(6, 1'29 •000 lank of hence •e\herla.D4• Bank Central Bank ot Clliaa  • 2,462.000 2,273,000  30,099,000 24,347,000  hneral hu1ver (ne\) lol4  r.e ..  •~.31+6,000  ,999,000  ~qht  Iner•••• ln eold calculatecl troa Specific .l&l,hor11a,1ona IDCN&H  1a gol4 •• ahown in wekq be.lance ah•••• $7,248,000 $7,022,000  Ia spit• of the •al•• aacl• to \he 0.uru !rea1urer the Jund at \he end of oo,ober va•  alao ■t  eaUr•l.7 a gol4 tud and it• dollar balanc•• had been  n4D.oe4 \o Jua\ OTer $7,000,000.  •f  tu principal lt•• ot \he balance ahee\  Oeto1-r 4 were ln roml4 flcur•• •• tollowa:  fhe $JO ■llllon in gold 101d to \he :Bak ot Chlaa ••• • , pap• l · laka from lbe Inact1Te Ool4 kcoal.l.,Uer ot Nr • .Bell to the !rea1anr of Jul.7 19, 19)7. 1 I11actiTe Gold· tile. \he United  1 ... Federal Reserve Bank of St. Louis  s,., ••  155 lolt ~:  a.u  ot Wng]a•A.  t52,555,000  .lcooal ~ .&cooaa\ I  66,910.000  91,000  laak of haace Ia lafabtSpi . .  112, 771. 000 13,156,000  ~, .uaq Oftloe  .ll ~e4•ral  •••rn le.ak  55,934,000  tl 75 ,IIAJ0.000 t 25,110.000 t 7,166.000 /  T.  ~  1u4 4vi-c Ill• Dollar loan:  hoa Dec•ber  1936  !reuUJ7 laa4 al>aorlte4 h.aiM11  lo lepl•Mr  t1.ato1,ooo,ooo  Oc\olter-Daca'ber 1937.  1937 lu IaacU•• la eol4.  Gold keoUAt  ot \he  file 4enlopaeat ot a eharp  4epreH1oa la Ula Valla4 Stal••• llownar, lad to a NlaaN of  $300,000,000 fro• 1h11 accoat in hpt•'bar, la aceoN&llee wUh \be tollov1 1q lu\nc\tou ••nt llo \lie !Naiver et Ille Uaitacl Stat•• '7 llr. •11:  •u or4ar to car17 out the latorul arranc-eah \etweell the l'a4aral leHr•• Joar4 am Iha S.crelaJ7 of the freaaur, 7011 are allthorlsed to truafer t300.000,ooo froa \be 1McUn gold la lhe general f ud. of lbe frea111J7 to the workiag \alaace •4 Ulen lake ltme41ate ■'epj lo 491>01U pl4 ceUfleat•• 1n 1h11 aaout lo the cN4U of Ill• '°14 •rllflcata fa..s., lo&r4 of Gfferaoi-e. !bl al h1•n• S,..ta, tor cre41 t lo 70v c•aeral accou\ •1th the J'ed.aral luk ot ... Tork, all affacl1•• •• of 1o4a7.• 1  ••WT•  "' 1111111- raaora NpJl to• that theN voa.14 be a further  4naluaUoa ot \he dollar.  Parll;· oa 1h11 accou\ aD4 partl.7 oa accomat of  Iha la\enaal 4ffalopaeata 1ll  ,i..  Ua1\a4 Hal•• tbe 4ollar ••• weak 4vinc the  lad 1..nar ot \be 7•r u4 \ben • • a cap1'al tru1fer of about $5()0.000,000  .  tna IM Ua1ta4 Hat.a. 1 8 1-.otln Golt• Ille. Federal Reserve Bank of St. Louis  Ill Wn•'ber .&aerlca Np.a lo azport pl4 on h.laaoe.  19 6 file 4owmrar4 \rell4 la Ille true••• leaporarlq ellecba. • • atroac la ... Ten u4 a hi&h 1•pna1ma• oTer ... Tork ah1pp1ag parUy appeared  I.ealoa pll prlce, aoaeU•• •tac hip •aoll&b to an• pl4 priTale pl4 arbUrap for expori ba4 hen pera1Ue4.  fro■  la .._  •ew Terk U  !hie aUaaUon later  lo l>• now •• Ille • aean•.  caM  u.ter  ,ua•  c1rcmutaace• Uae llabilua,1oa  eoapl•t• traufonaatloa. ( Cbar\  · ., · ) •  1  l'mli'•  t",366,000  aaaeta 1Dlllerweat a  of \he 1u4 • • pl4 ••• aow  lleU •• collateral for lh• Ch1uH , - . parchaaecl )T \he hn4 th• repur- 1 chaa••-•' vi\h \be  2 Cen\ral leak of Cb1M, ud waa couequntl.7 aol aTail-  a'bl• uleaa thh &CJ"....n, weN \uaiaale4.  fb.e Nll&inlnc gol4. fnel.J a\ the  4iapoaal of tbe h.n4 • • re4uCM to $JO,ooli,000 u4 lacrea1e4  ,o t129,li51,000¾  lL  Jl,._,{  1  ~, \he l>ectu1ac of Oc\o\er when the uw  u,  dollar ....,. were  ~ ~  aara,  .  altu.Uon had 4neloped  \he Sta'b111saUoa hD4 began lo ••11 la I.o114on the pl4 which U bad u4er ear-  ark al the lu1t of  Kaclaa4.  0a 0c,01-r 2 Ill• ~•4aral •••"• lank of •n York  • • laatrv.cte4 lo ••11 for the Jlu4 11p  fro■  1'• jccoa\ J. at the Jank of laglud  to ,00,000 oacea ot pl4 al J4 . .,,' per oace on or hfoN Oclo'ber 9 · u4  oa Octo\er ~ lh1a U■U  waa  ralae4 lo 600,000 ouc••·  On Oc\o'Nr I far\her  laalrv.cUona nre haud. for aal• of 600,000 omac•• al the••• price 'between October 11 u4 16 u4 on October 12 Ulla ll■ U • • alao rahed l,y a further  600,000 ouo••·  1Ja4•r the•• lu\r~1oaa all \he ac,14 held amer eanaark ln .  ~  Accoun A at  \!Mt . _  of 1Dclan4 ••• 41apoae4 ~,  aid  tu gold began lo be  talra fro■ Accou\ I. the 1a1,nc\loaa to aell 14 la Loll4oa al 4. wve !be WMkl.7 \alaace 1h••h for Oc\o\er 11-•n•Nr 13, 1937 wblch wolll4 alaoe 1M hlail of the chuce• are 111u1ng fro• lh• flln. 2 ... ,.... !~3 . . t ) llaere 1• aolhlq ln \he fll• lo la41cal• how th1a price vaa arrlnd at. ~ !here 1• ao 4ef1a1\e etat ...n\ la tile fll•• conf1r■1nc thh 'but U can l>e ln.ferre4 fro• th• balance aheeh. Federal Reserve Bank of St. Louis  l'e~lecl wllh TaJ71DC 11a1h 1111111 .,.._Mr I wan , ... h4eral ..... Te lank ••• lutrutel to ••11 103,621 ouce1 al  35.09. 1  0a ._.•hr 22 Ill• oal.7 p14  n-  aalatac uler •anark at 'h• lank of -.i•4 ••• •J.IJJJ,000 h £ccou\ •· ,w -11 eale•  ••n •'- lo  \be :laak  la lu uu.l we:r oa Octo1-r 6 u4 b•\er 3  aacraaUJic la all lo tl,52-,000 ta or4er lo proT14• ■terllq eoli  al ~-95-7/16 aa4 ,o  Im  leak of  2  -.96-15/16, aat oa •"•\er I  -.«laa4 oa a  Iba Jllla4 eol4  lr  tile hD4  ~.957,000 ln ,old  .. llar lliaala ($J5 leH 1/-) whiab U look fro■ Ua  owa hol41ag1 la • .,, Ton. 3  la a44Uloa. fro■ Oolo\er 11 ,o Dec•Nr 6 th• hll4 .,14 pl4 alaoet 4aiq lo lhe lluk of hao• ea a 4ollar Mala  aarecauac  $60,550,000.  4•11n17  la••• Tork la an  a■oat  U alao 41spoae4 •' lllla '1• of \he 12 kilo• which  U hel4 la Ua Accou, I al  •• ,u  ■-kiac  tu  laak of J'nace.  In apU• of \hi• large drat\  4ollar reaovoe• of the luk of haaoe the franc: r-lnecl Tlrlualq  "3.3i'~ 1\a'1oaa17 a\ a'bou\ .-OJJ ~ ad. \he luk of hue• collf1aecl 1\1 operaUoaa ill  the  •w Tork aarket  th• ha4.  \o aaall operaUoaa oa l,o\h 914•• of the aarke\.  Uler collflaiq Uaelf to  a■all  ~  la a441-  parcha••• earl.J' ln October u4 earl.7  la •onahr the ••U-rlu4a leak 'boacbt 1,1125,001 ouc•• (~9.175,000) oa Dec•iber 2 while \he hiaa -.nk l,oacbl u4 $79,800,000 oa De~r 20.  $27,971,000  la ,old  Oil  •n•ber  6 and 9  £11 '••• parchaHa ••re carried out at \he  ~reaaa.rz• • ••lliy price of t35 l•H lfl!. Ia or4er to proT14• \he lam Yi th 1 there 1• ao,htq la th• fll•• ,o 11141Cll\e tbe naaoa for lh1• ~ ln price.  of~-  AA lafereace ldgllt 'be 4n.wn Illa\ thi• eol4 ••• eold la the ■arke\ an4 no\ to \he :auk n l thh ehoul.4 'be oonfinae4. 2 ~1oa•-h11ac an4 Sellinc 1ore1p kchaJlce--1,erltac--athortaatloaa.• 3 OIi ...,_Mr 10 a fanher $15,000,000 wa• pvchaaecl 'b7 \ba :rum fro■ tile iuctt•e ..,.. .uoou\ of Iba frea■V7. fllere la aotilinc, howenr, in th• fll•• lo laU•I• lllal \be1• lwo \ruaacUoa1 cUrectq oouected thoach thh lafenace  • • ban '7 tbt pre••· IJ -h•ch J-ruce Joqb\ for Federal Reserve Bank of St. Louis  ••r• ,11. a/c of Ill• ._1c of lraac•• file.  •~flciea\ pld \o proYl.4.e \hh •b1lanUal 11&pp0r, for lbe clollar ancl \o  \u  -  ei,eolal d.tte!M!• of  frA-~ft.<  ,u  6?~  ••t  forelp oeatral 'buk1 • ..., arruce-Dt• ••r• • h  ~ ""1-- ~ ~ ~ ~.  % ·~ J  !he 1ecteral leHne lank of . _ Tork ••• l•tnc\ed to pvcha•• for the accout  ot lbl lbblllsaUoll hD4 col4 la u •oa\ aot to ezcN4 \he Yalu of  1apor\e4 cold rece1Te4 al Iha  1937  al the flat rate of  $)5  -'••81'  Otfle• la•• Tork \eputac October 21.  per ouce.  .&t \hla 11- pl4 • • 11111 flowing  treel.7 1Jl\o 1h11 coaa\J7 from Japan u4 oa October 22 arranc-enta ••re llade tor \be federal been• hak  fJL • •  York \o ncel•• telegraphic ad•loe of gold  recel•ed. f r • lap. . al lh• Saa 1raaelaoo •1at aJl4 lo parchaae U 'bT pqaent of  •35 per oaace ••r•  co■l»imd  a\ \he £a-. otflc• la • • York.  la \he followi-DC letter  fro■  Oa •cn-•\er ~ the•• lutrueUona  lb-. Wl to \he freaaver of the  U.Ue4 Hal••: l  •'fh• h4eral JleHrn hak of •n torte, aa filcal apa\ ot \he Uait •4 Slat••. ha• \Ha a1l\horhecl to parclaa.M fro ■ \ha Aa•q Offl e• a\•• York, for accouat '4 \he ltablllsation rua4 cold at •35 an oace la •oah appro%1•Un« \al ao\ exceedtag Iba •al u of all gold r•c•i•ed at all of lhe Valte4 S\at•• at.ate u4 £8197 Ottie•• hgiulag wUh lbe rec•1P'• reported in the 1\at•en\1 fro ■ \he N1a\a and .uaq Otflc•• cleare4 lnci■hr ~. 1937. !beH pvehaHa 'b7 the ,ederal lea•n• lank of lev Tork will 'be ■-4• 4all7 in lhe approxlaah equiYaleat 11110ate ot \be total receipt• ia Iba freaeunr' • aceouat nporlec! ta tu U.1'e4 Sta\H JUat and A.aaq Otflc• lraAacrlpt1 am telecr•• cleared each dq la 7our office.  •=anc•  Vpoa receti,, of -11 or lelecrQhlc report• 7ou are requate4 to Jlr. I.ochhead 4.d 17 of \he •oaat a of gold pveha .. d b7 all of th• Jlla\a an4 MNT Offlcee, aad he will 1utrucUona \o the l'ederal ••••n• le.Dk of ••• Tork relaUn lo pa.rcb&Ha fro ■ the Maq Otftoe, • • Tork, for accollllt of \bl hcbaJl«e ltab1UsaUoa l'mld.  ~•la•  1  cl••  "fl-actloa•--~lDC and Selllq Oolcl u4 lllnr-Ool4--0eneral• file. Federal Reserve Bank of St. Louis  ao,a•a.a'-•.lsaq refleolel • lr--  Iha hCN\&J7 4ealr•• Iba, lhe parclla••• lt7 111ata Gtftee• aa4 the 1-T \he .&.a..,- Office, • • Torie, b Ille 4&117 freaa1U7 atateMala azcept eimal\alleoul.7  eal••  ulloaa.  !be ~ecl•ral leaen• Jlallk ot a.w York will llak• pqaeat tor , . p14 pvchaH4 tr011 Iba .la~ Ottlce, • • Tork, 'b7 cbarctac tbll 8ecret&17'• Special .lccouat wUh the uout u4 cN41Uag 70v p•ral account with that 1-Jlk. !Ile a.aul pqaeal \o lbe fr••V7 b7 tba ••d•ral IeNne :lank of In Tork \hroach lh• Gol4 CerUfloal• ~ ot tu loar4 of Gcweraora ot thl •ed•ral ••••rn 171\• for lbl equlTalea, of lh• coli parcbaH4 le aot required. la lbl H trauacUoaa. •  l>ail.7 pvcllaue •4•  ~  •oule4 la tbl laat 111arter fro■  Ill• hD4  fro■  Ille O.•ral trea,urer ln \hie wq  et 1937 to alk»u\ $170,000,000,  aoagh lo off HI U1 i..av ferelp 1ale1.  1"l\ thh ••• far  Al the •114 of the. •4ollar acare•,  lllerefon. ,ha 1,ablltaaUoa ha4 ••• prMOalun\17 a tollar tud.  the golcl trauaetloaa carrla4 oa.t 4u.r1q lhla perlo4 •&7 be 1--.ri1ed •• followa:  t1s5,669,ooo  Oeural fr•aver Sold:  lank of hglaacl fro■ .lecoa\ .lat 34.79 per o•~ troa Jew York atodc fro■ I.Cao aat I at lltoa.J per os. · fro■ .Acoouat B at J~. 79 per os.  t52.000,000 4,987,000 2,524,000  55,966,000  .,_ of hue• letherlu4a Bank  hi•• ..HoA&l  $115,477,000  luk  60.550.000 51,244,000  101.1 g,ooo  ,0 9.000  Deerea•• 1a Ool4 ltoclc calculated froa Specltlc athorha\ ion•  $11'9,3so,ooo  Decna.H la lol4 8\ock •• ahovn 1n Veekl.7• Sheet•  $145.1119.~  1 Wlllloat the be.lane• ahee\1 for lhh perio4, ■taainc fro■ \he flle1, 1' laaa ' - • lapouibl• \o ••Uaate clo..17 lhe lraasacUona ln AccoDta .l ad I al \he Jank of Sncland aD4 a cUacr9PUc7 of ao• $4,000,000 in ~ ch~• in Iba 1014 ,,ock haa DO\ been reconciled. Federal Reserve Bank of St. Louis  TI.  Jlee\erlll . .Uoa, .&qut  :r1r■\ ~Crl■h u4 Vae\able bchancH:  J'anll!l17-  1931.  fh• releaae of $300,000,000 ln gold tro■ the I•ct1Te Aceout on Septe■-  ber  13. 1937 wa1  ' ion pol1q.  oDl.7 lbe flr■ t llep in ,11e abandoDMn\ of \he gold a\erilila-  !he Hcon4 va1 taken on lebraary 14 when the Secrela.17 aD.Doa.nced  \ha\ gol4 acquired la \he lllnta ad ueq Otflcea after Jana&r7 1,  193! would  be 1nclu4e4 ln lhe I11acUTe Gold l.ccouat onl.7 to the eneat \hat ncll acquhi-  Uona la arq one qu.r\er ezceedill.$100,000,000. retroacUTe ••  fro■  Ia or4er to aka thil pol107  JaauaJ7 1 certala a4Jul•a\1 ba4 lo be •4• la \he IllaCtiTe  Gold account, aoM of which affedecl • •  81a1-lll■aUoa  poliq CoTerai11g the InacUTe Gold .lccou.nt pvch&Ha  'b7 lhe StabiU.saUoa  aa4 \oll&ll\ fro ■ hi■  ~  -JIO  ,n,e..  fro■  ha4 u4er \he iu\ncUo•• of  ~  31, 1937 u4 le\1'11&17 1~. 1931 whea \bl aew pol1c7  wat la\o effect lhe ltaM.llaaUoa had. 1la4  MCOUt .... 999.999  ,be O.aeral !r~a,urer  loapr paaN4 lllroap the IaacUn kcout •• :._  •twNa Decea'ber  h••ver ot 'both  fro■  UJader \be • •  had. lo replace pl4 relea"4 for ezi,ort were taken  "T U. ltabillsaU••  •nea\er ~. 1937 wu  1u4.  •4• parellaH•  fro ■  \he General  1, lla4 . . ., oa IU'OU7 2, 193s fr• lh• l•eUTe  la Coli to replaoe 1D14 Nleaaed. for uport and had pur-  o!laN4 u4er \ha ce•ral 1utrucUoae f4 So'Y•'ber ~.  t27 .010,000 in  eold.  Ia  a441Uoa tha h.D4 had acquired •tro■ other Mvoe•• (chiefq parchaaea fro ■  Jlezico ~ fro■ \ha laak of hace)  u.4 ba4 •14 lo \he 9oTu·n111ent  of t9,093,000 la pl4 u4er Ille ..., reparcbaM  acr-••'·  acUoaa iacnaN4 Ha pl4 bol41ap tr• $ oa Deceaber  abou\ $'8,ltoo,000 oa ~-~ 1~. Federal Reserve Bank of St. Louis  1931.  0a hbr11&17  15 lhe  fheae  31, ·1937 to  hnd aold to the Federal Reserve Bank of St. Louis  201  CHART V  202  h • n l ~Nan.Nr all Ille pl4 wlllall 11 laa4 p_.ohaN4 elaoe hoa\er )1, 1937  •soe,t lu ~.999,999 \oa&bt troa Ille laaotlw Aoooa, lo replace pl4 aol4 fer •2POrl oa Jaaaa17 2. 1ebna17 lli of  !hla  n■11lte4  •••I $31,000.000.  la a ael eal• lo Ille heaeuer on  0a 1eltnar, 15, bowner. lh• 1u4 \oapt  t9,093,000 la p14 tn• the I11aeUw .lecoal lo replace Ue  ••noaa  •al•• to  Ill•  Qoyenmenl u4 aleo aol4 a futther $1,125.000 la _,14 lo tu !reaeunr.  Aa a reaa.1' et all lheH a4Jul•ala Ille hD4 tiapoee4 of Jut ner t22,000,000  --  oa 'be.lac• lo ti. fre&•V7 aa4 \toqb'--2-th  $5-7.eee,ooo  I  ana-tao1tt-., -wp  ••  .t•-' .. , .  c011ar, ~ >.  U\er 1h11 adJutlleal n• ooaplele4, leplher wt.Ill other  adJ•'•-'• tor  -11 1 , - ohlefl.7 la Ille tree eolt aoco•I fl I • heannr, Ille heaav, wae able lo 4etend.• ti.. uaol ___,  ot pl4 aftlla'le tor ,epo.s.t Ille -  J ....r, 1.  poliq •• .,  Ille pl4 4epo1lle4 .... lbe pl4 wll1oh M4 , ••ll •l•rll1se4 1', ,_  h•ral heannr or pvolla..._ '1' Ille ftaMU.aaUoa had. 11ao• Ula hciulag of 1M 7ear.  till• -  wu ~.067,079 at •• h'"-17 15 llr. Jell • •, a 1•1-  l•r ef l•lnotloa, lo tile treaaanr  pnuac  l•n• et Ihle leller wn •• fo11. . . :  1  Ille uw pellq lalo effect.  Ille  •••-,.•• an aulllor1•e4 u4 41reete4 lo •• 4epeall locle7 rilll Ill• 1Ner&l leMn• lank of • - terk fer 8"41' lo 7ov acooat, tile - et ~.000.000 la pl4 oerUtteal•• u4 eoallaae lo 4epe1U with \bat ltiaak HNaf\er aUl tarlur ao\ioe or a'11 ,._ acsr•pl• of $100,000,000 11 nacbe4 wi\llla Noh 1..ner, pl4 oerUfloal•• ••mTalat lo ,a. cla117 aocn\lou et sc,1' 1• 7ev aeooaat la MllUplea of •5()0.000, •• 11- 1-el• fl taib' fn&nl'7 na\eauta. •  m.e.p, for  Ill• lraaaacUou wllll lluioo  ..a  huae ule4 a1tow Ill• l\abi-  llaaUoa hal _. iMcUYe ta Ille fonlp •zchupa 4vl!I Ille perio4 een the 1 !be a'bow le\alll an \akeD tn• lbt.1 l•"er et lu\noliou fltaacU·.- Oold. 8 ) a4 fro• Ille klaaoe auet u4 apeeltlo aa\laorlaatioa• of ti. ha4. Federal Reserve Bank of St. Louis  2CJ  ~lac  ~ l o a p1ltq aa uaa...-t1....  ...,lwl.  pJsmrl ad PIii tau dtNI.  t•~ aupl8, ltia4 -...  earl1.H .,. dw  lie derUac  ••lllliMr 3.  hill  MWNI', le •• o4'e •l'Uft fer U.. parollaN ..._ aa1e et h'wa tor  • • laak et ,..._ -.. ..... Dt11 1ler 31.  u feU.wea  1937 ...  ·--  ~~  15, 1931, eta wn  ...  (000 Nd.lMI.)  ~  !m  I.ti&  »eJt 6-o ).'9-3/1' Ced•  )J,500  Ju. 10 Jaa. 14-17  Jo. 20-h\.l  h\. 10-ll :r.,. 15  '9,650 5.:,c,o  3·»-1/• -3.n-11'  tUft&llod •  - · · )191°  tr..  ,.no  3.n-15/1 -J.'JJ-1/2  l.'50  3.21-,,- -3.31-5/1  3.&-1/1'  ._ a.o1ta1 •• tftlll la Ula  tw , .. ,.,... Ir I - - ftcwn• aa 1M  Mdia •f ~kaar7 u4 ti.• hM  Uac lraaMOlloa m1ac U. aoll\ll, a aa1e d 055,000 11111A _.  a.  ..a. ealT w  ater-  •~"at 5.02-1/2  •»•--.. la 1M --.1 a:, '7 1111 ..., .... et pl.4 fNII 1,. MCJtal  ••  hi.a"'-- 1,. ~ p l . I . l a ' - ' eHallU le t1.27'.000.  II a1N NU.  $20,550,000 la pl4 .. U..  le  .,,,75,000  1e 11111  la ..,_  flnt CHell eriaia.  a\  $~.7T  pd'  •t •naMr 1935 lo - • l ftlil .....  1'd nhH4 11 to 700,000 o  1 •~ Federal Reserve Bank of St. Louis  ..a w11wc a.u•  ftlf  H •  ni..  et .._  100,000  a  21, .._. 11  11  Ir 1M  ~ 15 ..._ ti..  York ••k1ac 11 to ,11  •I UIIII tft• I • 1.lloo,000 ~  20, ..,_  111U ~  llerl.lq tell •• ~-" •  Jlllft)l&N 111P ••  17  n ..._ ~ 9.  aatln fi;pperl et Ula f•Ni&a nebe•••  laak of • .,.., Gdled. to , . h4ual 1-Mrn laak ..,, 11• efter  ~  lnnaN n.'-k '-'.... l ' e ~  MN  - ~ et Ille  Ida• .._ fnll  n-  el p14 hOII 11 L  II -  llaftdl 17  !Pet alll U. odheak Federal Reserve Bank of St. Louis  l  l i i r  I I ' J ff. I~ I. ~ I I  I ~  :1  : ~  ! r. ..  ~  I.. l"' I:.- ..If:  i- lI Ir I~ If I ; f r ~ -. r r  f  M  :  r  - i  r.:;  rfr f  ~ • ~ ! 1 ~ i l i l i  f.  :a~ •i.  fl I  r  §  i!l  i  i~  (  f i  f  i (f f i }~ l ! ~ ' I ~I  I  I  i  J  E  I  I  ~ ~  r. ·  I  ~ 5  1  ~ol.-  f : : .  §":t•"  Jf I £{  f 1 , i r ! I l fII-  f  ti~  §  I_l~,i i; i: i ! ; ; j r ! , ~ i ~ i r f:: i: Ii 1111 J! ; ~!I!;: ii; =if Ii! I: I: i ···lq £ I . I ' ( l i } t ! f ~i i I i ~·,, ·, ! ~; s J; It I If~ ! l ; ~ i ~; i e I I, I' i . i ~:! . t. ' r I~ 1l ~ I J u ,,·fr la( i , , . :. l ·e'~ ~,1i ,I I, ~ f !, I• Ii :~ rI 1I :! ~, ;, l1 I1 ~I i .i, I ;· ~I ! ~ I !I i ! I ! fi If' ~ I  ci;~1 If . ·~ r r . I  cu.,  Ille h•ral freaever Ille . .w.lTal••I of pl4 1aporle4 la\o tbe Unl\e4 Slat•• u4 \cnachl )7  ,u,.  tu  Ualte4 Ital•• •1ah u4 Aaaq ottie••.  ••betaallal alld lhogp a few -11  Ml•• WN  fh••• pvcbaH1 ••r•  aad.• lo Iha Ge•n.l !Naa-  ver la llarch ..,; u\ pvoha1e of $2S,OOO,OOO re1ulte4 1'7 llarch )1.  cha•• ot \hat 4q ••• lh• lad fro■ \he Geural frNaver - - · • u\11 Ille 01a\'bnak of the world war.  M a re,a.1,  u,  ,,  leapora17 peak of $85,126,000 oa April 21 ( Obar\ ~ ) •  Ille pv-  lb.e hD4  pl4hol4lap ro .. lo a jll hi  t5, 000, 000  of  lheae hol4lap waa hel4 la aaf•keephc la the Ua11e4 Ital•••  .u 4oM4.  of ~rll 11' Iha pl4 alerlllsaUoa pol1q of Ille Vailecl ltah1 waa abue;-r"  the 'balaace of \he I11acll•• .lccou.l of  tl,112,97-  u4 Iba frM pl4 in the  workiac f1Ul4 of th• tna111r7 ('201,933,000) wr• tun 4epoaUe4 la the Gol4 C.rUflcal• hDI of Iba J'e4eral 1e..n•  loan.  lac14eat lo Ihle lraufer the  lulrucUoaa of •o•••r - coac•nlac 1M pvo!ta•• of laporlecl gol4 )T lh•  llablllsalloa J'lm4 ••r•oaac•lle4 aa4 fU"lher aol4 ,raaaac\lou ••r• carried out wUh \he ha•ral !reanrer uiler •lhorl'J' 1  ot lbl hcNl&17'1 lelter of IOTnber  6. 1936.  froa lh• 11• ••• Ill• p14 1lertl1saUoa pollq ••• aba.aloae4 u\11 \he flral  ~  MgUI Ille trueactloaa of \he '11114 ••re uclulnq with \be lank of  hc)awJ aa4 the luk of haace.  Dllriac April '-'h alerUac and. fnace contillued  lo '- fln aa4 froa . .11 12 lo 27 ti.. ha! aol4 28,750,000 true• u4 boucht  oaq 5,100,000 fraaoa for \he acco\UI\  p•rall.7 abo•• -'311-1/2. •  ~~  ~  \lie . . _  et mace at rat•• which ruad  !hereafter tbe rate lrob u4 b,- llq  5, la apll•  of further •a.ppor\ la , .. York, fell to lbe lnel of .f2~. la Ill• 1at•~l 1 Check. 4etall1 ban ••• lake• fro■ tu leller ot lulncUon1 ••nt . )T llr. •11 lo th• freaaver of Iha tlll1'•4 Ha••• oa jprll lS, 193s. •1aacUTe  !he••  lol4• file. 2 •hench haac• »o1apt aa4 lol4 for th• a/o t4 the la.ak of ha.ace• tile. Federal Reserve Bank of St. Louis  206  the,_. lla4 ~011PI 37,000,000 truce u4 ••14 Gq 3,500,000 for aocou\ of lM :laall: ot haaff.  .-a-4 to Ill• la • .,, Ten.  ■1...1t._1 ut *°"' ttaoroattor tbo fl11Cl•Uou ot otorllac \ Co•••-u~ 11 allow4 la ~ Jaavar,, a 4eoltalac treat. !be opera,  6.  lloaa OUT1•4 0111 '7 1M ha4 fer tbe luk et 1ruce la Iew Tork  lo Aacul 1 wn •• fellow• 1  ...,.  lol4  llaT 21-Jae 15 11,000  2.76-1/1 - 2.71-15/16  , ... 21-30  2.75-3/16 - 2.76-15/16  31.soo  Jaq ii.-  Alie- 1 Ia apt \e of ,iw wealcnaH u4  rea4Jua\■ea\  J(q  5  -r@:Jf tfJJ  95,195  (cen,a) 2.79-1/2 - 2.10-1/1  23,515  2.71  59,ltoo  2.75-15/16-2.76-15/16  (ceata)  ..,. 7-20  fro■  .....  (000 oaU\e4)  JalT 1-13  J  ¥Ma Ille fl'DIIO lla4 ......_, tilt ■ 1e.,.1 la hv Tork U waa  -2.71-15/16  of \he fraae la hw York \he  luk of 7ruoe ooaUIUl84 \o \e a 1\e&47 luver of gold. from the l\abiUaaUoa ~ hD4 fro■ jpril 11' to Jlq 23 Mil at\er ho a-11 parch&••• at \bl ell4 of liq  11 'beeaae a fr•qma\ Nller '-"' la aall aoaata fro• Jae  23 to Jul.7 7.  Dvlnc Ulla perlo4 lbe ha4 eo14 ~.000.000 la pl4 lo \he leDk of lranee of which \he greater part • • eol4 at lhe 11• of the readJuatHnt of Nq 5. VUh \he ezoep'1oa  pt•  alacle pva&,-e la Iew Tork of&,000,000 from the  ~~~~  herlce• •1abuk •• IQ  21,_tlle  pl4 truaacUoaa of \he hn4 wUh ,i.. lluk  of wen oa a lllall aoale la 1M  et alerllac a\ ral••  fro■  --97-7/16  le  lffOM  5.01  ,aarter of 1931. Moderate aalH  la jprll u4apla la  Jae  al abou,  nq truaacUo•• oarr1•4 ••. la orier le pro•14.a ,he aterliac  --97 wn  lbe  fer IMM  Nl•• pl.4 waa releaaecl fn■ £ceou\  A aa all eol4 la AcooWlt I )lad  hn l!f!!lo4..f J - 1i. uotllor ~ 1000 1000 of pl4 - • llolljpl b Loa4oa 'but  i~- Federal Reserve Bank of St. Louis  .  207 lllla w.a 1-41&1•17 bpone4.  ha4 fro■ Ille . _ of  ftla wu the lad parehaee 'b7 Uw ftablU.saUon  lmhr Iba ten• -, tile h1:,artU• • • - • • • U l tU ou\brealc ot \Ile - r Ille h.114 na\eN4  r-•  W.Clu4 at ,i- e\erl1ac-eol4 prlo• • • ' • to 11 u.117  tu  a\erllac  ■arbl  la £Dcual U l,oqhl alerllac ta • • Tork  tor oollffraloa lalo 1914 la lhe 1N.1.11on  ■arbl  u4 when U r••aed. lh 41red  la4 la Octohr U 'bcnapl  fro■  Iha pl4 earu.rked  for the lank of hglen4 at Ille ~e4•ral BeHrn Jlu1c of Wev Tork oa a 4ollar  ----- ---------=-----------..1..  ---------  hrchaH1 al tJli. 77 fro■ Iha Baak of JDclan4, howa·Hr, eoa.Unued and  a aaall IIIIOlllll wae parchaaecl ill Jvl.7.  the pl4 lramacllon1 of Ille hD4 fJ"OII laaaar, 1 lo £Dcual 1, 1938 M7 'be nau4  11:p ••  followa:  Joyb\: :lank ot :laclaa4 Accoul .1  -6,UJ,000 ~coal• LeH loll 5,667,000 Ia LoZMloa aarul luk ot Cblla 0.-ral freaaver (Mt)  $29.260,000  $30,476,000  1,216.000 10,530,000 175,000 51,066.000  t92,247,ooo luk of l'naoe (ul) ~ - 1a1 ... 8"r1p• tike\uk . . . ~ . .ZlOO  (Mt)  $110,572 .ooo  20,550,000  9,975,000  "<>.ooo  71,537,000  lacnaH la Gol4 8'ook oalcvla\e4 troa lpeclflo Alllhorlsalo••  t20,710,000  laoreaH la lol4 ltock oal01lla\e4 froa •••kl7 \alaace ahe•I•  1 (11 o'iz. ," e1 a> Federal Reserve Bank of St. Louis  208 TU.  DeollM la llerllq P4 Ill• a.toll Orlale:  _____  ADca,a,-WoT•\er  193s.  Iba read,Jublea, la Ille fraac oa liq ..___ 5, 1931 ea4e4 lhe perio4 of lhe  ••maat• L whloh  or •tloaUDC' fraac aa4 1-pn lbat of Ille ao-oal.1•4 •DaJ.a4l•r• franc  ••• pea-4 to ,,arllnc ~ abou,  - -- -------  179 fraao,  per ~ua4.  the n.bteq~•'  uellae la true• waa \btreton a nflecUon of a 4ecl1u la Mid 4ollara which Np.n al lbe end. of Kay aa4 eon'1au4 a'11 a -  of aboul 4. 70 •• reacu4 at th• ea4 ef 1931.  po1nl of real dance  Attar a 1llcbl rea4Ju1.. nt \he  p.ll4er, belp an4 IM lwt11 fruc wn aa1alalM4 eta\le la 4ollara.  !he qa-  ' • of uchang• rat•• ene,1ac - • ,i.. aoulrl•• ...1-n ot the ~parUI• .1gn. . ., • • a, Ihle llMaOI a q ■ I• of ela1-le  •zabaace ral••  which \he h•ch franc u4 Iha poua4 alerllac aon4 hplbar la  \al OM la  tu  l•ru of  ,he r..-.tatac fov carreul••·  »,  Mpal lbe 1roriq lealioa la ~ope 1la4 oaue4 a auba\aaUal eapilal  IIOftllUI  '° ,. Ua1te4 l\&'9• aD4 lbe hlld. , ..... aeUT• la  ■ appori  of alerllac.  lroa A.apal 2 lo 30 1' Machi lll . . . York a,7,,000 ., ralea cleclialq tro• 1 »..90-1/1 lo ~.16-1/16 for eoanraloa ta,o p1' la lhe bullion aunt, u4 al  the,... llae U \oapl pl4 M&Tll.7 fna \he laak of Kaclaa4. proaoll of lh• Jluloll crtala ~ ..1-r 20 lb• hM M4  ,u pnanre ••  llel&bl  et  the crlaia oa  aterllac • - - lal•••• an4 '7  '°11P' a fu-U..r ~7,567,000 ta  llhloh wen allll 4eclla1-. lo ~. 73-3/1.  a.p, ..ber -9 aD4  u4ar 1'• •ua1111 ofter at $31'. 77  Of IJlle,  l;i.  ••re alao  lfUb Ille ap-  •e• York al rat••  ~.250,000  Pvobaa•• froa  waa hQ&bl al \he  ,u  laak of lqland  uonaa.a aa4 th• ll■ U of Ulla  efter • • nl•.. uUl U reacu4 ~.200,000 011aoea pot fNII lept•1-r 12 lo 17. boa Septnber 15. UNOTer. , . prloe ••• cn411allf N4w4 uUl 1, reach.a 1 !hroQCbov.\ lheH ••c\loaa pvaba•• of a,erltac la Wew York for coueraion lalo gold ban beea ua111N4 to 1- for eoaTeralo• la Ill• Louoa •rat and not 1', Iha Juk of hclu4. If Ihle la ao, eorreot \be approprlale ,ill tazt 1- •4• throQCboul. Federal Reserve Bank of St. Louis  •h•••  209  ✓  /  $J4.6o oa Sepleaber 21 la or4er lo lake accoul •f lalcb•r war rlak luV&llce  *•• 1, •••••'al $.3~.7625 .1 L- Sep\•'ller 26 \he \o\al parolaH■ ■1- Ill• lleg1imlJIC ot J.ugu\ aa4er \he■e I I • • aol apia akb1lt•e4 •Ul Decahr  rat••·  aalhor11alioaa M4 reached  *237,000,000, tu pl4 equhalent ot which • •  plAON Uller earaark la Mcou\ .t..  J  ~ hn4 •aa aleo • he•YT ba,er ot pl4 froa  lepl•\er,  5  other catral bana 4urln«  Aac•I 12 u4 hpl•hr 26, t7.~,000 la pl4 •••  lleheea  9 ,o 21, t33,J06,000 wa1 'boupl  from \he Jank of haace, fro■ Sept•ber  bough\ fro■  2 u4 oa Sept••r 27, $5,628,000 ••• \ouch\ troa \he hiH  th• •etherlud.e luk  In October, haweYer, pvchaHe of pl4 fr• th• leak of lraAca becaae  lank.  T81'J 111&11, 110 &014 ••• aol4 lo  $16,lSS,OOO in pl4  Iba lw1•• laat aa4 the •eturlan4a lank aold  \o \be ha4.  ID a441Uon  $9,0.30,000 ill pl4 \o th• h.114 oa Oc\ober Ii.  ,u  1-nrlpe •ikabuk eol4  la ooalrul,  uav  :pa.rcbaa•• ot  aterliq for coanraloa la\o pl4 ooaUau4 at rate ■ ,wt. \hln the ranee ot 4. 73 lo Iha  »  pl4 eoatiaae4 lo \e \oa&bl la Louoa froa Ill• lallk of Kagl.ud under  hnd'•  Yon  fro ■  8'u41a« otter, u4 \he 1u4 pvolla1e4 $172,375,000 la pl4 lD ... Ille ._k of hclaa4 1dllch releaM4  1e4enl haem . . _ of lew York.  ,u  pl4  fro■  Ua aanark at the  !MN parcla&Hs ••r• reaUM4 la ln•b•r  and a fv.rlber $112,21~,000 1a pl4 ••• \ouch\ la \hi ■ WT fro■ loY•'bar 14 to 21 .  Ia lept•hr Iha ru4 Npll lo ezacu\e er4er1 tor purchaH ud aal• ot  a,erllac la ..., Tork tor , . accoual ot 'he frtparU le AcJ"•-1.  ,u Juk of  .l pm-cbae of  a65,000  a\  Kncland Wider ihe  4. 79-1/2  Oil  l•r■•  ot  Sep\aabar 17  wr• lbe oal lranaacUoaa at 1'. 77-1 S on I l•b•r u4 a •ale of a,IJ , •Jaak of -.laad--Waekq Gol4 i..t,er• file. 2 On Sept• lar 5, 193s Iha fraa1V7 aake4 the 1e4eral IH•n• 1tuk of law York lo adnH \Ila lalharlan4 ■ 11.ak \ha\ U wo1lld. 'be ln order for lh• lo earmark pl4 acataat 4ollar1 which lhe7 alp\ llaYe lo aall to Mlpport Ille pil4ar. Ille li■U - · $25.000,000 aa4 Iha pl4 - · \o be bel4 paa41ac ahlpMD\ lo \be arranp■ante wen for \he aocoul of tbe 1ud.. tlll1W Stal••· "Pvclaaaea aD4 Salea of Qol4. G.•. A. • file. Federal Reserve Bank of St. Louis  th•••  210  W.glaad 'bepa lo eupporl lb•~ a\erlt..c ac\i"Nl.7 111 the • .,, York arke\ "'7  nl••lac Ue pl4 tr• earaark al the 1ehral •••n• le.Dk ot •n Tork and  ~--~---------------r-- !he  • Bank of •n York lo pvcha.•• a\erliq.  luk of haace, hovenr, acUTel7 aupported. Iba franc ln ••• York \hroapout  1-weea J.apa\ I aa4 Sepl•\er 21.  1' Mpn lo llake a fn Dall aale1 oa  lept•\er 4 an4 'b7 the eJMl of •n..1-r ha4 repvcba••4 about 100 ■illion franc, . fheae lraneacUona wn oarr1•4 oat •• a  c!:2:"l•iar •rkel aa4 lbe fraac  reached  a general lnel of alM,at .126) \o •.112~ al 1111 • • of •n•\er vbea uo\her  •  •  \eaporaJ7 elabiliaalioa waa accoapltahect.  lo hold pl4 aD4 oa lepl••~r l U 1-pn \o ••11 cc,14 \o lh• freaaur, oace aore  ln large •out 1.  collJ)alll•••  A  I\e pvcha•••. bowe••r. aol oal.7 • a:eected the total of 1\ 1  ••r1•• of apeclal arraac-m• ha4 \herefore lo  lUal• \he lapcrl of p14 lo Iba Valte4 stat••·  be  -4• lo faci -  Coatra17 to Ua uual  practice, the h.a4 bepa lo ... foN1p ebipa aa4 to laeve a part of the &0ld the Offenaeal'• ••lf-luvance faolllllea. 2 >, lhe lMtncllou h••4 to th• 1e4eral  ••en•  1-pa lo laclad• nplaJ-17 the •'•'••al Iba\  luk of • • Tork lo iaport aold  tu  1•4•ral laaerT• J.nk colll.4 pl laeunaoe ap1ut of lhe Tal ue  lh.e a4 of S.p\-Nr  lfN••1ll'7 uderaioocl that the  ■ariu  ot the ahtpaeat al Ille ralea ai,.clf1e4 '7  rl•k oal.7 tor a portion the Go'hnuaeat -tha t  U loul.4 DOt pt ia ■vaace apiae\ rtab ot war, etrlk•, riol or clTil coamoUons . 1 .,r... actlou-->DTtnc aa4 lelltnc 1orelp hcha.ace--lterllnc--Author11ationa• 2 ••oraD41111 of llr. J.ochh-4 lo Jlr. Olipbut S.p\•ber 7, 193s. ■r. Dletrich'• •aou. 193s-1939• tile . Federal Reserve Bank of St. Louis  211 M a coaaeqaeace the ~•ral •••"• lank ••• 1aatruc\e4 lo recor4 the ahlpaent  aot prift\el.7 laewecl.  In ad4Uloa lh• ~  ••h of &014 nl...aed. froa \he 1', U.11e4 Ital•• lo aolTe the  •w  proble■  T81Hla.  u4  Oil  1  fr•••ll!'J'  la Sept•'ber Md• fov ahip-  of bglud'• .t.ccout A lo lh• U.Ued ltatea  fbeH arranc--nta 9'111 were aot eatflcient  Sept•ber I lhe Jed.eral h1ern of  •.w Tork  ••• 1utructe4 to ••11 to lbe Qeural h.D4 of lb• tr..•'117 at th• flal rat• of  $35  per ounce aol4 wblch vaa orlcla&l.17 pvchaeecl abroad tor 11- ltabiU.saUon  hn4 aa4 which ••• wbJect lo lbe or4•r of lbe Jederal h••"• Bank at the t i •  apecltlc authorlsaUoae tor nch  ■ ale  wr• ctna b7 lbe !rea91U"7.  Ill.Ch gol4 •••  to 'be bel4 '7 lh• Jecleral aeaen• lank of ..,, Tork la a Qeci&l outoq account 2 for lh• !r. .eanr ot th• UaUe4 Slat.a. ftllal.17, proT11loa vu -4• for holdlag  10•  of lhe ~14 trauferred. lo \he fnanrer  b7  \be h.D4 la \he United.  Ital•• in a apeclal c1l9'od.7 for th• freaaanr of the Uallecl S\alee. Ua4er I••• arruc-at1 lbe ltabilbaUoa had. ••• able \o bol4 taporaril,1' ■ore  lban  tu  total of 1'• act1Te a1H'8 la th• font of  aol4.  Jor  eza■ple.  on  S.J)hahr 25 Ue eol4 hol41ac• ••r• •• follova: Abroa4: IIIDk of lncJ.aD4  $115,636,000  .Accout A .&coout J  ltg,192,000  t165,  Ia fraaail A\ tbl J'ederal hHrn Jank of In Tork  33,451,000  Al Iba IJ1a7 Office  19,423,000  t291,56o,ooo  !olal .tcalne\ \hll U bad a llabll1\7  3,158,00C  1'•• of  $liJ5,000,000 for pl4 bel4 in caatod.7  for \he !Naaver of lh• UaUe4 l\a\ea, re4acly Ue ova pl4 a1Hh t,o 1 Ir. Dietrich'• •aol4: 1938-1939 1 file. 2 Letter of Jlr. !qlor \o \he freanrer of the 11. I. la "PvchaH1 and. SalH of lol4, , .•. A.• file. !hh proce4un eolft4 lhe probln of allocaUnc lo the hA4 \he 001\a of laporUac gold boacht b7 lt ail4 eol4 to 'h• !rea1urer. Cf . Muoru4ma of Ioffllber 14, 1936 fro■ llr. O'Dulel \o Ir. Jell la •JuTinc and S.lliDC Gol4• file. 3 LeUera of Sapteaber I. 1938 \o ,he hcleral bHne luk of lew Tork and to the !reaaver ot the Uaited. lta\ea la Jlr. Dietrich'• •0o14 1931-1939• tile. Federal Reserve Bank of St. Louis  212  •1116,560,000 vbloll appean4 o•  L  lr  \he 1-laace eheel.  arraace-•ta Marl.7 $500,000,000 la pl4 • • 0.-ral !Na■ver beh. .a Aucil■\ 1 aa4 lo••b■r 21 ,taeH Tarlou  \he hD4 lo  ,u  Ulat 4ate 'h• h.D4' 1 eale• lo the ~9111'7 reeal\e4 for  ,he  J  U ■e  fl rat  aol4 Oa  ln a  aah\ulial re411eUon la lh pl4 hol41Jtca ( Cllart ...(). fte pl4 tn.aActiou  ot \he ha4 fro• MCU•I l to •o••ber 21, 193g  11187  M euaaar1••4 u tollov1:  •ucht: ho■  Jank ot  34. 77  :lnclaa4 tor Account  34.60  j,  per ouce hoa gol4 earaara4 '7 luk of bclan4 ill In York In \he LoD4on lN111oa aarkel b7 ooa••r1lon ot 1\erlinc pvcbaae4 1• al  lo  lev Torie  $3()2,000,000  203,700,000 19,717,000  !o\al boqht la -.aglaDd  $595,417.000 1,191,000 17,llS,OOO  Jank of J'rance ( u\) ••\heJ'lan4a Jule (ut) S.111 laUonal Ju.k laDk of .._.11  5,621.000  1,562,000  -627,916,000  !olal Ooli Jo~\  lol4:  luk of halell&la  $  9,0J0,000  l495,646,ooo  haeral fnanrer !olal Ool4 lol4  t511,6JS,OOO  lacreue la pl4 1\ock calculaled froa apeclflo au\boriaalloaa  Aclul lacNaH ta told a\ock •• •h~ '7 veekq \e)eDC4  ba••  1,014,000  5,91'1,000  C.atral . _ of .vpDUaa herlp1 tilcabau  ah••'·  $116,278,000 tl.04,650.~1  1 I aot been able to f lnd lh• aovoe of 1h11 4llerepanc7 of about $11 ■11llon. It la probabl.T 4ue lo lh• rather cr114• •lho4 aftilabl• to ■- for NUaaUq gold porchaae4 ua4er lhe 1\aal.lac ofter td lhe hnd u4 e&r11arked 1n ~count A at the Bau of hclaa4. Federal Reserve Bank of St. Louis  ~aa•1Uoa lo a . _ llerllq-Dollar la\e:  TUI.  Sonaber 19J8-JanaaJ7  0a •••Mr 21, 1938 alerllac tell tor lh• tire\ tl•• below 4. 70.  1939. !he  hB4 coa\ l o ~ la lew Tork al 4ecl1a1ac rat•• an\11 JaaaaJ7 3, 1939 wllen 1, reached  al ~.67-3/16.  4.62-11/16 u4 -4• a  flu.l purchaa• of  1277.000  on JantJ&r7  ft11 'brouch\ 111 purcba••• fro■ lofflll>er 22 lo JUll&J7  £4,410.000 ('20,503,000) u4 the lolal  9  9 lo  uou, of alerlinc boqh\ ta In York  a1ac• Aucut 2 \o £21,)66,ooo. 1 Ia a44111oa the hn4 pvcha1•4 $25,000.000 1n gold fro1t the lank of :lnclaD4 •• earaark tn lbe Jed.eral Tork oa J>.c•ber 21.  • lank of •••  bc91>t for \bl -1• of G.70,000 oa Juua17  5  u4  6  and  th• relea .. of \he correepon41q aaou\ of pl4 fro• Ua .1ccouht I at \he  lank of IDglaD4 Ihle coaplelecl the taleneaUoa et_ IM had ln the ahrliac _______________ .....__=====:=---=======:::::::::--=---==:::::---===:::::::;;:_, __ ..,;;;;::::>,;;;::;;;;;;;;; _ _ _ _--====:::::::: ll&J"Dt for Ua owa accoul.  Oil lda&r7  tor lhe accoul of \he IMk of  -.SClu4  7 \he  a\  J'u4 aol4 £120,000 ln ..,, York  ~.6&-1/4  u4 •cianiq .TaaaaJ7 U  U 'boupt alerllnc replarl.7 tor account of lhe luk of ~land under \he  tena of \be trlparUh .tcre..ant. ,fhil co1ac14e4 w1Ul aterlh.c ral• al lhe lorl4 Var. ••• la  tt»{rwnc of  the  .  fttl• the reM,•al ot ahrllac lo 1 ta ••• polnl ot red dance  prop"eH  th• Ju4 414 aol hi' U7 pl4  fro ■ the  Ink of ln«lan4 in. London  1m4•r tie 1tu41q otter, hi oa hca'ber 3 U 'boapt $8,020,000 and on .Tu11U7  3, 1939 $25,192.000  111 &014 fro■ the lok ot ha.nee.  !ha later pur-  chaa• • • for 4ellnrr lo \he MMJ Ottlc• aJa4 1al• lo \he General frea1arer  a\ $35 per ouoe.  fhaa• were lh• lu\ pre-var  Uon hn4 b7 t!Mt luk of Jr•ce. whlcb,  al•adz  fro■  •al•• of 1014 lo tbl  Decea\er  Stabilila-  5, 1931 oawar4a, became a  bu(•r of gold fro ■ \he hat la aall •oua,e u4 for loy periocl1 vaa l •Purcba•• of Sterling tor Coueraioa la\o Ool4• file. Federal Reserve Bank of St. Louis  214  alaoel a 4&117 pvcbuer.  1  »6  ·~ :  Ille  u ..  eterllac • • peUff at Ill• li.68 lnel  tile lak of ftrm !1&4 \oapl 1-ck •arq $1,000,000 ot the pl4 eo14 lo Iba  hDI la Dec•hr 19)8 u4 Ju•17 1939.  Dvtac lllla perlo4 of nadJutant  the lra41ac open.Hoa, of the lulc ot haace 1Jl trance ill lta'blllaaUoa  ~  lt-4,150,000 traac• tr• .02.61-7/S  \o  were  Oil  •ew Tork throap th•  'both •14•• of lu aarket u4 la ao4en\e aaoule.  were pvcbaN4 u4  22,915,000 nn  aol4 at rate, ranctac  .0263-7/1. 2  Bu.v ••l•• of pl4 1lr \be had to Ill• h•ral lnuver p-eaU~ reclace4 / 11• cc,14 hol4111p \nu-4 \be ••• of (Cllartj ) '-' la eo■'~i•Uoa  •oi,••r  with alaor trueaollou wl\h o,ur ffalral \uk1 lbeM ••re Jut aatncleat lo keep Ille ha4 '• col4 at a lnel of alMtal N,0,000,000 alll Jua17 16 7 l'i '\ 1, the pl4 lnaaacUou of the hll4 turlac lb• perlo4 l'o••'-r 22, JU1.UZ7  19)1 lo  16, 1939 11a7 • a-.rlsecl aa followa:  !!!4hl: laak of •&J•ad kcoat I (I.oa4oa) Accoal I (In York) laak of lraac•  -~.079.000  -44.512,000  20,50),000  •• ,aar.ark lor hl1T•J7 to Geaeral !reaa.rer laaoo 4• Coloabia luco 4e Cbile  •  121.000  25,192.000  1,1-3.000  534,ooo  •12.279,000  101':  '135,311,000  h•ral !naiver  hoa eafebeplJIC  t1og,-19,000  25,192,000  lak of h•c• pl4 •tb•rla4• ~ Janco 4• ••zlco  1,025,000 1,125.000  137,461.000  hcliae la pl4 hol41JIC• calculated fr• apeciflc aa\horl..U. . -65,112,000  ••etl.7  *"'•  .&ctllal 4ecliu ahowa 1'( baluce t61,977,000 1 "Pvchaae1 u4 of Clol4--0 ·• .j.. • t 11• 2 •hach trance aJl4 lol4 tor a/o of Ille lank of huoe• fll•. Federal Reserve Bank of St. Louis  lal••  .,up,  215  IX.  Peaiac ,i.. l\erllac-Dollar hdwlce .., • •, IJ.61: 0. l•aar, IJ,  1939  Jaaaa17-.bpat 1939.  llr. Loohh-4 of lbe ltab111saUoa Jmaiif prepared the  followlac . . .oran.41111 tor Secr•laJ7  Bu•• 11Mllca•lDC lbe atllla.4•• of  \he :lrl\1eh u4 heach au,hor1U•• Iowan th• 4ollar exchaap at \hat  ■oaea,. 1  •0ttlclal1 ot both \he . .Uleh frea■UJ7 and. the luk of Jn«lud coa\laua peadll11Uc o••r \he outlook tor ■ '•rllq. file precloainat• factor la tha Nliet Iha\ ture wlll 1-e uolher war aaare la h.rope la \he aear future. !liq fHl that U7 1A ,he polUlcal outlook will a rhe la 1\erllac, •• Ille Mala ot tu preant probl• la prhar1l7 pol1'lcal. Iha lrlUah ha4 ll loalac oa u anrace ot tro■ 15 lo 20 alllton dollar• per 4q aa4 lhq ban 4ecl4e4 oa the tollowiac procra■ la order lo realet the pn1nre apiut eterlia«: ( l) -' ooapl•t• •1-rco oa tonlp lell41ac; (2) -' cnpl•I• •lie.rec, oa f orvar4 pl4 operaUoaa: (3) A 111pe"11ioa ot escbenp lraa■ acllon•: (4) hpleai■--1 of the . .1Ueh -•ll•aUon had • a traaater of col4 fro■ the laat ef ~laa4 eo•U•  lapro•-'  \hi• wek.  l\erliJal, att•r a 4ecU.u \o ~.62-1/li \hh aonlnc. baa etreqth-  ••4 ....., ,o 4.63-1/2.  Ia coatraat \o \he teellq preTalllq la ._.1&114 \he 1ruch am I M . _ ef haac• are ooaparatinl7 opUahUc. !hq haTe ooa'1am4 lo repla col4, Ihle pin aTeraciac onr $5,000,000 each 4-, u4 ow1q lo Ille re\vn ot fu4a lo \he hench ■aru\. baTe 1-ea a\le lo re4ue '1le 4hoout ral• troa 2-1/2'/,, lo ~- 1raac• are 1aole4 la lllh aaral al a\oul 2.62-1/4.• !reaaV7  the•• coa\J"al7 aUUwl•• nre reti.e,. . la lbe \ran.u.cUoaa ot the had a.  acUon \akea '7 Ille kUlah aalhorlU•• to ••' the 1UuUoa 1•  l.eacrlM4 ta a ••ooa4 anoraa4aa froa • · Loehh--4 ,o llr . . . . . , lwo ..,. later:  •111• ...  "Tea\eNQ nealnc .,,erworlll oalla4 fro■ Loa4oa aa4 a4Tiae4 \!aat ba ha4 \Ha requele4 '7 \lie ~ ID7 lo ooayq th• tollowtac latonaUoa lo lecre\al7 ._.ce•llaau:  (1) Al - o'cloelc lllta attenooa ,_,. will •aouce a transfer of pl4 fro■ the leak of lacla4 lo th• lqaalisaUoa hM. fbe7 had orlctulq 1atell4e4 lo traaaf•r 6o •illloa poad.s, k\ Mft aow 4•c14e4 to lrulf•r all th• pl4 aequln4 '7 lbll Jaak of lacl.u4 liace · lbe7 . . ., oft Ille Gol4 l\an4art la 1931. !be7 are lakiac all lh• gol4 in \be llau 4-i,ar\■-1 of tile luk of -.lu4, wi\la tu ezcepUon l Mr. Dietrich'• 2 Ib14. Federal Reserve Bank of St. Louis  1 Gol4  19JS-19J9•  tile.  2  c:::'.  J. 0  et 126 atllloa poail.a which••• la •1uah poH••aloa after llle7 . . ., off tile lo14 l\ukrcl la Sep\•ber 1931. Ihle lruater will uoal lo 200 ■illioa polllld.1 at tu 014 rate, or roachl7 350 ■U­ lloa pou4a al curreat pl4 lenl• ($1,70(),000,000). !he obJect of lh• lrauter of euch a larp a■ouat le to aab U clear \qoD4 arq d.oubt ~ t \he hch•np h.114 will N ia poHHaloa of 1o.ftloleat reaoarc•• \o ••I a.a-, call oa 11. · (2) 0a Sata.rclq U will be uaoaac-4 Iba\ the frea11127 la1•114• to 1atro4ace l.acialaUoa lo uea4 Ille Curreaq u4 JaJlk lot• Act ot 1928 whaa Parll-•1 recoueu1. fu7 will pro\abl.7 r••lu the gol4 la Iha -.U of bclu4 al Illa\ u .. fro■ lhe 014 11a,11to17 gol4 ral• lo aoaethiac ... r \he preHnt . .rat ln•l, but lhla wlll aol .... Iha\ tllq baTe e1\abl1ahe4 a f1n4 price  for gol4 .  er••  .u thq \elln• Iller• will N a 4eal al o0111Nat aJMl apeculatloa thq haTe requete4 parUcularl.7 \hat we •ke ao coa•al oa U oa lhb al4•. •• 11 alpl •ba.rrau Ill• lo ban Tarloua lDterpretalloaa place4 oa lhelr actloaa 'before ••'•· Va4er  th•••  circu.lace1 lhe laak et  ._laa4 ~cue a replar 'baT•r of  aterllq la lw York, acqulrlq \he 4ollar1 1'7 rele&H ot gol4 tro■ earaarlc~  la tile aaral wr•  fro■  J...-.r, 27 to  -.rch  15,  fr• liq 21 lo Jue 11J, u4 fro■ lllq 1 to J111J' bolllb\ al Ju\ ner ~-  67 "11  fro■  .iprll JO \o llq 15, and  26. Ia  Juu.r, alerl1ac •••  fro■ llarcll 16 oawarcl lu rat• ••• apt, w1 th  oaq ou or ho all&bl 41'Nr1loa1, al Ila• lri Uah authorlU•• w1 Ill l.ollar•  ~.61-1/1. { a. h1l4  197  coaUa-4  aa4 larp  fro■  npp~  parcball-. pl4 la Lon4oa troa \be  'b7 1"111.a« gc,14  :la.Dk of IJaclu4 la accordaDc• witll lulr 9'u41ac etter u4  lev York  '°  in  Iha lank of ~laa4•a eanarbcl bol41aca ~ II • • alao a frequent  b~r  fro ■  ~ ' - c•tral  1ruc• which coaUau4 lo  ~  ba.DD wllh Ille escapUoa of Ille llank of  p14  fro■  •••r. lh• 7u4 accmnalale4 plcl oa larp  \hie ha4 uUl  •oal• a'Woa4  Jal.7.  fro■  On belaace, how-  the  ■iddl•  of JaaU&J7  lo the outbreak of the Wor14 War aacl waa a nplar ••ller ,o the haeral freaever. !'he relaUoaahlp \elveea 11• torelp pvchaH• aad. ..1., to the 1 fhia 11 aol ,,ated 1a the fllH but wa• Ille proce4ve a4er lh• !riparUte  Acr•-at. Federal Reserve Bank of St. Louis  Conflra.  .  V Federal Reserve Bank of St. Louis  .... ,  CEJJ{T VI  freaaver ••r• reflect•• la tu ••b■taaUal n11e,aaUo•• la 11• pl4 hol41raga.  (,  1J) • .&c~Uoa ot Ool4 tro■ .JaauaJ7 17 lo .April  A.  ho■  Jaa•r, 11 to  26  J,  19)~~  lh• hll4 pvcbu•4 a,"'for \ha a~cout  of the Jallk of :ID.claa4 at fro ■ 4.67 lo ~.67-5/1 aa4 •4• ou pvchaH of ~~  13,250,000 trance la Wev Tork tor the lank of .rraace. It aleo  ■-4•  ou parch&••  of $10, la gold troa Iba earurlm4 acco11at of ti. leak of •nclaDd •4  conUaued. to ••11 -,14 to the ._k of hace. fonlp escbanc-aa lacnaaed  ••JT n'9taaUalq.  cha•• gold troa \be hlherla.1114• llllk aa4  In .rebna17 1'1 npport of \he U \epa on JauaJ"7' JO lo pur-  mallaaecl lo to so uUl the outbreak  BT llarch 22 lbeee pvchaaH ha4 •oa\e4 to th• •batanUal  of \he war.  of $SO, SS5. 000 , of which a part ••• hQ&ll, for aal• to \he !rea•UJ7.  •t111  On Ju -  11&!7 J) U alao parellaae4 t2(),026,000 la 11)14 fro■ lbe h1u IaUonal llallk fro■  Ua earaark ln lew Tort: whlcll 1t kept la aafekeep1JIC, and. in larch it pvchaaecl an a4dU1onal $40,471.000 froa the■ for aal• lo the fna•lll7.  the hnd bepn to \ab &014 fro■ the lank  et :lnclui in Lonclon at )4. 7625 per  ounce an4 'b7 jpril 30 \heH pvcha1N laa4 uouale4 \o about aleo 'boqb\ pl4  fro■  In ~•bru.JT alao  Ill• luk' • lev Tork hol4lac on a lara•  $,ooo1. n  •cal• u4  in larch  th••• pvcbaH• colnc14e4 wUh renewcl pa.rcha••• ef a\erliac ln lew Tork on \ehalt of  -ril  6  ,u  leak of :lnalaa4 aaoaatlac lo G, 731,000.  2  •twe•• llarch 3 all4  \he had alao \oapl \el.pi tor oonera1oa lalo pl4 la kuHla lo the  lo\al aaomll of 1~.999,000 belpa al .1613,  1aporh4.  bnac  Iba pl4 eanaarke4 for ih  fhe :Bank of hance, hownr, ooaUa-4 lo bk• pl4  fro■  119111 l'und.,  lncreali 1'• vchaHa uaUl U ha4 bo I froa Jaa 1 lo ril oTer l K1U11ated •• 1Ddlcate4 Oil pap :-11,,. 3 . 7,35 ,000 of th• eol4 boa«ht fro■ \he Bank of bclan4'• earaara4 pl4 la Wew Tork•• for aal• lo the General frea111rer. 2 ~anaactloaa--BaTiac aD4 S.lllag ~orelp. kchaqe--fterliq--.lulhorl1ation1.• Federal Reserve Bank of St. Louis  219  t9J,311,000 la eo14.  .&I llll• ,1.. 'h•  hat••  operaUoae la •ev Tork tor the  1aak of hue• were roatr1cled. lo the pvchaH of 21,250,000 true• tro■  llarch 17 to llaroll 31. la Jlarcll 193-:  tu  hll4 vaa \hu la the -.rut either tor lh ova accoa.nt  or that of olllor catral bank• 11114or the !rlparU to Acr•...•t la aapport of  alorliq, l'Nacll true, and 'belga1.  II oa4ea•ore4 lo enon4 1h11 1a,eneAUoa  lo lwiH tnaca but lA ,hl, ca.. foad lhal Ua aa:ppon ••• aot ftl'llq coaecl.  ••1-  On March 30 Swiaa true• " " offered. 'b7 Part, and. I.own ln Wow Tork  with ao blJT9r• an4 \ho ha4 lalornae4 u4er the !r1parUto Acre•ent u4  'boupl 250,000 ht•• traac• a\ 22.112. a4n1lac th• lw1H •auoaal Ink \hrouc}l ,ho federal ••em Jut ot  •ew Tork thal  U wul.4 requ•I ,h.. lo conort the  true, lalo pl4 for ulpaut al aa oarl.7 uto.  !be lwiH •auoaal Jui, how-  nor, 11141oate4 \hal U !lad. the aUaaUoa well la llan4, Iha\ 11 ooul.4 nn lh• ra\o  11p  lo  22.50 lf  1' •  4011"4 -, laleneaUoa ta, lhu •rappiac the  apeculatora onr the tauckle1•, u4 laUaa\e4  ,ha, lhe7  woal.4 ratbar aot  the 1e4oral laaone Jllak lahrna• wilho11t lbetr ia1tncUoaa. laDk ottered to pu-cba•• tho f raaca  fro■  fhe lwil•  Iba 1e4eral bHno t.t 1h11 ••• pro-  f•rN4 lo couoraloa lato pl4 aa4 \be fr&AC• won eol4 lo llaea at price, 22.1'2.  ha••  tu  co,t  llr. Knoke of th• 1e4eral JleaerTe luk a4Ti•e4 \be hill lallk  Iha\ he wou.14 lA \he future be gu14ocl b7 their wi ah.ea  nt  naern4 lbl right  lo lalonae under \he Tripant\o 1f epeculat1•e. aad.den, or 1lMzpecte4 4•nlopaenh ahou14 r•D4•r aGCh acUon coapelllq. 1 flll• waa \he oal.7 laternn-  tion b7 the Stabilisation had. in tu  Swl•• true  ■arat.  1 Meaoran4ua t4 a telepllone co nnraaU on bot""a 11.r. laob u4 Ir. lchnort of lhe lwia1 laUonal Jank, Jlarch JO, 1939. llr. Dlolrich'a •atabilhaUon• file . Federal Reserve Bank of St. Louis  !be ezcbaac-a atab1llsat1oa operatioa• 'of \ h e ~ ••r• aow, ezcept for \he pvabaa• of pld  fro■  \he !au of Kncland. ill LoD4oa, ,ha ou ••r1•• ot  operaUoaa wUh th• KaUoaal llank of Jelc1• aD4 th• etncl• lruaaactloa ta  lwiaa fraac•. conf1ae4 wholl.7 to ••• Tort aa4 \he proce4ure b7 which 1014 boqht  troa forelp Mntral bank• ••• place4 la aateteepiq ta the had u4 \hen aold. to the !Naiver •••  DO  loapr •• 1.llporlaa\ •• here\otore.  wu lraaaterrecl direc\17 \o Ila• General heanrer al lhia  Oal7 e1s,ooo,ooo  U••  '7  lu  ~  troa  gold. al.Naq ill Ua cu\oq. file pl4 lrauacUoa1 of Ill• hll4  troa Jaafar7 17 lo April 3 aolecl a'boT•  when ooa\1M4 vUh oenala ataor lruaacUoa1 u4 \he pvcbaa•  ot $29,959,000  1 ill pl4 fr• Iha Cea\ral luk of Obi.Ila 11117 M ellllllariaed. •• follow•:  loapl: ~  $166,232,000  of hcland.  Ia l.oD4oll tor ~ooul .l lro■  -,14 earaara4 in Wew Tort  $1S,5()0,000  77,732,000  le\herlaa4a Jut · h1aa lat1oaal laDt •atloul luk of Jelclaa Cea\ral laak of Ch1M  I0,05,000  60.~97.000 3,s70,ooo 29,459,000  2.oso,000  laaco 4• Coloa~la  .,~.623,000 lol4: JeJlk of lnace 0.aeral fnaem-er ho■ aaf enepiac Ool4 bofl«h\  fro ■:  lelherlaa4a laalc Swiu hUou.l Bau .. ,tonal lank of Jelciaa Baalt of !anco 4• Colo■bia  -..«lan4  93.311,000 161.197,000  $  $11,000,000  )7.092,000 llo.~71,000 3,s70,ooo 67,3s4,ooo 2.oso,000 262,215,000  Increa1e 1n gold atock calcula\ed. froa IJ)eolflc aulhor11allona  • so.4os,ooo  Actual increa1e 1D gold a• ahowa lll ••etlf \alaace aheela l See page 2 I haYe not been able to f1n4 \be rN90a tor this lhcnJ)&llC7.  • 71,587,000 Federal Reserve Bank of St. Louis  2  221 llr. Loollh-4 •-aeate4 at thl• U• tha, the had eho1114 keep $50 ■illlon  la pli a\ Ille l'Neral leeen• lank of Wew York 1"1.1 \he lecre,&17  wa•  ao\ pre-  pare4 lo 4o eo aa4 dated. Iha\ lf &JA7 1uch actloa wa• 4ealrable \he ■an■a  eo hel4 allov.l.4 be $25 ■lllloa.  1  !he Probla of Ool4 lhlpaeale '7 Parcel Poat. ~  B.  .  larl.7 la .lprll ao ■-what  1939  a probl• that ha4 been  a eolutloa ••• reache4  lrrUaUng \o the .-i U1h autbor1 U•• la their acllliaistralloa of \hi  friparti \e Agre•ent 11nc• lh• Jluaicll•-lhe 0.1pNBI of pl4 to \he  MIil•' 19)8 ,. llarch 1939 $9() ■1llioa of gol4 iato Ul• Ua1'e4 ltatea '7 paroel poal. Ille•• ahlpNah •re a\ ftr1t ho■  t1n1'e4 ltd•• 'b7 Mll. l■portecl  Vlll  -■all but lhq aaouted to .E),000.000 la Ju11a17 u4 ~.000,000 la Je'bnar,  1939.  !ha 1••1Uoa of fia41ag NM va:, of 1leppiac 1h11 lraff1c ••• lheretore  ra1••4 ritb lhe J'ed.eral leMne lank of lw York~ \be Jiau of bglud in  1ebnaaJ7. OD  2  aacl oa llaroh 25,  1939  th• lri'11h  \he nbJecl wll1ch - · lraa•1U•4  h•ral.  Oil  tr..•V7 prepared a tonal note  Jluch  29 bJ'  Jlr . . . . . . lo the Po1t■al\er  111 Ihle aote the lri U 1h !reaaV7 pointed. oa\ ,hat pl4 va• 'beiza«  Nagh\ la LoD4oa and ebippe4 lo Parle tor 4el1TeJ7 lo tbe hach poaW aa.\hor1-  llea.  n  waa aalle4 lo Wew York la paclcace• each eoatalatac a  fhia bad \he effect of  allkt.a« a uv pl4 export  alacl•  1014 bar.  polat. I.on4on lo In Tork.  wblch could aot be equalled bJ' N4uclq ahlppiq freight~-  !bl IJ1.Uah  Trea•llr'T bad aU•ptecl to atop ,he pracUc• bT aaki-C la•uraac• rate• prohl bi U ba.t 8wtH coapaaie1 conUAued. to vrU• the luvaace.  4oubl7 obaoxioua to  th-■  Te  !'he whole procedure was  because 1, increased th• pl4 flow froa hrope to the  United. StatH ud 41aloca\e4 the or41Dal'7 Mtho4e of  ■aucnut  and. oontrol. 3  l Ne■oran4a in Mr. Die\rich'• •1tabil1sat1on• file. 2 Nnorud• ot lht 1-4eral llank of.._ York ot lepl•'ber 14. 1940. and letter of llr. Baae• to \be PodMater hMral of larch 29, 1939 la "Dhpatch of Gold bT Nall or Parcel Poat Jlarch 25, 19.39 ,o lep\•ber 16, 191'0• tile.  •••n•  3 Co■-a\1 of \he S.coD4 Federal Reserve Bank of St. Louis  £1111\aat Poe\aaater hneral oa \he  ~ '1 lh note.  Ibid.  222  la Mmtatuc •• tllle Ml• De Poabaeter - r a l alate4 tu.I larp •ulp••• d  pl4 ._. , . . . neelftl la 1M, ,-rUnlarl.7 fna huoe,  acn,t •  ... .lutnlla, u4 111•1 Ille Beputaeat lla4 \Ma laportue4 fer Nllef "1" tu  et•• Alp ooapa•1•• lllltoh neelftl u1T , ... IOllhal larltf fer •ffJiac Ill• all• ul . ., Ille fnl&lal •• ._. lta -  eo14.  Ille 17al\ell hat•• Jteal Ottloe aleo  nuo•• for wt.1hlac to nep tlae alllpanla, fer ti._. lo Mfepari  lll---lhe Autrallall e!alpMata  tna lea haul•• le . _ Terk ul  tbe luopeaa  ablpaeata froa Iba 4ook lo I • Aa~ Ottloe--ul fvtlllnen 1M pJ.4 'en oat  tu -11 ,-.. u4 .,, loet. lllen MA a l ~ '-ti -  lle14 -,.  1  1M heaell  poslal •lboriUea aboal4 oooperale la , . . . .tier, 1M ~ - - , fell, al._  h•oe waa  pl.Mce4 lo ....1'  M a n-11 Aaerloaa ,-atal  Ille hlpartt le ---H ■ tal.  •• et Ible ••ob••• ot n - .. NplaUoa . . . . . . . •-'lie•• .lprt.l I, 1939, prolalMU.q IM et ••altallw  cnwl■c  lr-porlatloa la 1M r ...Jer all• er ,-nel peal f,u U7 fonlp ooaat17 la\o ,._ Ulllte4 llatea d  $50. ut •• April 10 n11-. lhnalll •  .,u ..1a.  hllln er tut  llr. i.e..... ahiM , . .  Jwnac a  ftl•  -..tu• aalllorlH••  et eftr  ef llll•  na,• ..,.,..._,.  Wllll Ulla lroa\l••- a.tall tt.,_et fJf IM -•lrel aalbrlUea eoattallM, after jprll  1 -D1.,.,o11 Federal Reserve Bank of St. Louis  1939, le t ... lb aaJff ~ • l • et MMlhc the eoal1UN  et lol4 "'7 Jlall or Pareel ha\  llarell  15, 1939 I•  lepl•Mr  16, 19llo• .  223  Loe• of h14 1-7 the hn4 ~rt l 3 lo JIily 31 ·, 1939.  C.  Da.rtac lhia peno4 the operaUoaa of tu hD4 for the accollll, fl forelp ceatral buka followd. tbe llA•• alr-47 ••tablhhed.  £9,027,500 nre  pvcha1e4 tor \be accoua, of Iha Juk of Jnclan4 ln hw Tork all at 4.68-1/!.  Jul.7.  Pm-cha••• of traac1 aD4 gg.114era, hovner. conURaad to be  15,000,000 franc, were 'boqh\ ln £pril at a\out  2.65  ••11.  about  eenh &D4 13,750,000  fr . .c• on June 30 at the aaae rate, for \lw accout ot \be Jank of lruc• aA4 Wllller a atucllac order fro■ lh• •1mrlaa4a lank 6,190,000 ¢14•r• were pvchaHd for 1t• accomat at  53.os. lo further hlpa ••r•  With \he ucep\loa of a few rUDd  fro■  ■iaor  lloqh\ after jprll  6.  traaacUou \he eo14 \oapt '7 \he  ceatral llaaka cl.vine \hta period wu all pvchaae4 ill .lprtl.  le\veea  .lpril 10 u4 2S lhe 1u4 parchaeecl about •135,000,000 ln cc,14 froa \he Jaak of hcl&Dd  (t95,  $a>  la Lollioa aa4 $110,000,000 ta • .,, Tork),  fr•  the lriH kUoaal llak, tJ.5,000,000 fro■ \he le\herland.1 luk an4 $15,000,000  froa lbl -.,1011&1 laak of Jelp1111, lbe ,reater part of which vaa eo14 to the frea11D7. the  ~  Danae lhh period of on th• excbanpa ao gold ••• aolcl \o  b7 \he  Jut of ha.De• which, llowenr, acatn becaa• a large pm-cbaa•r  la liq. Ja,a u4  Jaq.  .la a rea\llt lh• col4 ho141n«• of \he  tam.  were re4v.ce4  I  to aboiit a leTel of $80,000,000 (Cbart /: ) • file pl4 tran,acUona of \bl 11IDd 4ur1a« \he period  31, 1939 ;, I  lie•• Federal Reserve Bank of St. Louis  11&7 be eaaar1se4 u  ael laHa all• te fl•  fro ■  April 3 to  followa:  tu Na•••  fe• tlt.h 4l  1e•-,••ef'•  lvJ.T  .•  22 4  ,:  . _ et -.Cl•4 £oooal .A (I.oa4oa)  •100 ,260. 000 lto.~12.000  Ia..., York  ••UlerlaJula Jut hiH •auoaal laJlk SaUoaal laJlk of  luk ot lulco  •1140,732.000 39,076,000 20,011,000 17,750,000  •lei•  IJ,5()8,000  C.atral -.ak of upaUu laJlk for Ia\eraa\ional le111-,a  2,500.000 1,203,000  lol4:  O.ural freaaunr ho■ Cutoq .&ccoale Ool4 'boup, fr•: lukot~aal Mai lalloaal Ink ••tioaal laak of lelciaa ••therla41 laak C.alral lank of fa.ra7 luk of Oaal-1.a luk of 1raace  ti".1".000  t2J5,2J9,000  llo.~12.000 20,011,000  15,1196,000  15,116,000  2,250,000  1,050,000  56,  29 :> ,497 ,000 Decreue la pl4 calCGlale4 Deena■• Federal Reserve Bank of St. Louis  la gol4 ahowa '7  fro■  WHtl7  epeclflc aalhort. .uou  • 69,717,000  Mlaaoe auela  • 71,370,000  225 X.  fte hD4  Danae Ille Var Crlala: .t.acu\-lepl•\er 1939.  Iha nlaH•• oa1a ba4 preftlle4 la \he ezcbanc• aarke\a froa Jlq \hroqb  lv.17 •••  ln-oan ln .lapa\  oatltnalt ot tu war. tba  'b7 ,11a cr1.a11  ialled.ia\el.7 prece4111g the  {Danae J.acut aacl •arlT hpt•llor  ~ - " larplT eoacoatratocl la tho  atorllq  th• acUriU•• ot  ■arkot.]  Oa £a&ut 1 it  ·n aterecl lhls ll&J"DI •• a pvchaHr ot a\erllac ill ••• Tork oa behalf of the llaak of bglaa4 u4 conUna4 to 'bUT 1a  larc•  •ouh uUl AQguel 24.  Q,432,500 ••re bou,h\ bT the h.D4 for Iha luk of ~1-4 ln Ihle per1o4 am al \he .... HM 11 purchaae4 $115,241,000 la p14 fro11 Ille lank of ~laD4  ln •n Tork.  tac  U aleo 'boll&ht tss,095,000 ~ pl4 ta l.oaloa al 34. 7625, lacnaa-  1'• atan41a« order froa 700,000 \o 2,100,000 oueea for \hie parpoH, for  lh• period. .lapa\ 21 lo .UCUI 26. th• wekl.7 balance aheel  .April.  nt  Ool4 aller earaark la Londo• appeared. la  ot Iha had for .lapa\ 2- tor Iha flr ■' liae dace  On \hal 4q ~.000,000 were lhowa ln Accoaal A at \be luk  .  lhh ••• 1-ediateq lapor\e4.  of hclaa4  1  !he aterllac lrueac\loaa ot Aue-al 24 were ,he la1t carried out with aterliac at ~.61-1/1.  !ha flaal pvcba•• of p14 fro■ \he lank of  eanark oa \hat 4q ••• 2,03s,a3 eao•• (enr $71,000,000).  \he  :an Ueh aa\horl U•• oa  a\,  2  '• .UC-t  25 Uae  cl••  b1l■JN1 •'bled. to  ~cbe•c•  fro■  \he l'•~•ral •••"• Jank  Uan pl4 4eallac prlcea, 3 u4 on Sepl•ber 6  lh• freaa11r7 noel•e4 a cable oollf1ra111g Iba lruster of the  pl4 to llae  la ,p1,e of Ihle  24 -4• the 4ec1a1oa lo r•n• th• peg  leak of  of••• Tork lbal n oolll.4 aot  :laclan4'•  WqllalisaUoa Accoal which W  ~  of Knglall4' •  hea renaled 1a lhe Boue  i.  of CollllO•• bz llr ll•a la auwr lo u1Uoaa. !be laat 1\ea i lol4 ia fraaaU 011 Aacu\ S waa ,000,000. klanc• ShHta. 2 ~ ca'bl• of Aacut 24, 1939 fro■ llr .kllerwor,h lo lecre\&17 llorpa\hau 1\atea Iba\ '11• Br1Uall lla4 4ec14e4 lo lei derllDC 4epnclate. Ir. J>le\ric,h' • •Gold 19JS-1939• file. 3 llr. Dte\rich'• •Ha'blllsatloa• file. ~ lb14. Federal Reserve Bank of St. Louis  ••ekl.7  226 1• Ill•  hat'•  1lerU.q le•  tU.e of epeclflc aa\!lorlaaUon• for Iba parc!la•• •4 •al• of  •al• ot a,ooo at the war tlae rat• of ll.03-5/1 •• hplnur 12.  0a thal 4q Ille ha4 lla4 lrauterre4 lh• balance ot n,676. 15•. 114 ltiel4 bT  Ill• laak of :laclaa4 la Ul• l'e4eral  •••n• £ceoal 3 lo lu Acc:oaa\ • ·  lhu oloeiac lbl •ooalrol• accoul ope-4 u4er the !rlparUt• !lie •lh•rlaa4• ~ oa Sept•ber  5 caltle4 to  2,  Acr-••'·  ti. l'ec!eral •••rn luk  of ••v Tork 1taliq lbal Ue 11u4111g or4er lo ,.,. p114en al  53.os wa, 1Ull  Tall4 u4 lhal maUl further ao\lc• U wuld coaUau lo proTl4e lhe 4ollara )J' aulhorislDC lhe1e4eral le1ene ~ of • • York lo re1.... pl4 froa 1'1  earaark.  1  !he llllk of haace conUnucl lo \v,- pl4 froa Ill• hll4 la aall lot, On .lapat  lo Sepl•hr 8.  23 u4 21' U  S,200,000 franc• for U1 aceout at  &110  2.65  11p  lutnclecl Ille ha4 lo pvcbau  oeala  nl  wUh Illa 4ee11loa to ~low  derlinc lo 4-,reclate 11 rneraecl lh po•illoa la the •rut &D4 hcaa• a ••ller of fruoa la Sew Tork al rat•• which recul,arl.7 4ecllM4 lo 2.31 ceate oa  lepl•ber 6.  Oil lept•'ber I aD4  aal•• for the accoul et the to 2.28-5/S ceata.  9 Iba lad of  ~ of Jraaee of  lh••• traaaacUou look place, 3,100,000 frae1 at  fro■ 2.27-1/4  0a lepl•\er I tu lta\llhaUoa 1ma4 for the flrat 11•  alace ».caber 9, 1936 'boapl true, for 1ta own accout.  U 1aatncl•4 the  7e4eral leHne Bank lo pvcba•• ), 100,000 fraaca al 2.25-3/1 cat,. to ban th••• traMfen-ect lo the  ~  of ~ c • aa4 ooaTerte4 lato gol4. toceUl•r vUh  \he -11 klaace reaalalnc 1• 11• Wo.  u4er eenark.  ~  Jlml4'•  3 accoal, aD4 to ••• tbe &014 hel4  •coatrol• accout at the laDk ot hue• waa \hua alao  cloee4. 2 Oil lept•••r  g  th• h4•ral •••n• lat of • • Tork 414 aot recel•• lta  .: 9hanch hue• loq,llt u4 lo14 for a/c ot Ille luk of haac•• flle. 2 lfw,n...,_ taw llr. ~ lso.tal7.- -:llr . . lletdcm' • •1ou 19JS 91 f!ltt-, Federal Reserve Bank of St. Louis  eu••--•  227  oaled. thh lllforaalloa \o \he !reaa1117 tocelher with Iba reault1 of a t•l•-  phoae coner .. uon wUh Paria vhlch lD41cated that 110Ml&17 poller • • coaalcleralloa.  1  ,i. whole 1uaUoa of 1rench  !be reau1, of Ihle oolltereace • •  the paadag of hallc• to a re11M of •xcbeng• oomrol whleh ••• recopilecl -, llr. •orpnlbau ln th• follov1ac  pre ■1 releaa•: 2  •fbl Secre\&27 of It. fNaav, etate4 that be had 'been a4Tiie4 b7 \be N11liater of ftuac• of l'raace of U• ...rpaq- action of the heach Oonrnaent la HtUac up a .,..,. . of ezchance control la hue• an4 in heach lerrllorl•• onrN&a. the Secre\a17 aalcl that \bl  United. Ital•• GoTermaent ncognl1e4 the ...rpaq coD41Uou which lapellecl 1h11 aeltoa, aa4 1tatecl \bal Iha !ri-Par\lt• 4eclaration coallnae1 la effect.•  let•••• lh• 4eclatoa of  Illa leDk of -.i.claa4 to allow aterlinc to tall  u4 Sept•laer I the Jlual pvchaae4 pl4  fro■ \!Mt  earaarlca of other -'b•r• of  the hlparUI• ~ a l 'but oa J.acuat 31 th• lalioaal Ink of Jelgiua reparchaaecl a\o11t ou lhlrd of the  ha4.  t6.s61,ooo  la gol4 witch  u  ha4  J•t 1014 to  .lt the • - Uu the l\ablllsation 1un4 aade nhlaatlal aale1  u.  ot gold  lo aon-laropean coaatrl••• Nlllac about $9,000,000 to the h,al !hat Tr•••lll7•  about t2, 000, 000  lo tbe Ital• luk of lb•  Ill• C.a\ral lenlc of .&rgeaUaa.  aearl.7,ooo  u. S. I.•. ,  u4 aMu\ $11,000. ooo lo  II alao lruatern4 lMtl•••n Aqmt 14 and 2S  l• coli \o lh• haeral fnan.rer, but Ua parcha••• fro ■  lh• Jaak of ~laa4 bad 'been ao larp Iha' oa \alance U 'bull\ llolc11nc• \o \h• lewl of a'bo•t )(a;,  19lio ( Cbart  t170,ooo,ooo  lh gold  arou4 wllich \bq tlactualed unUl  ,n) .  flle lraaaacUou  ~  (Aupal 1 to 1-i>t•'ber I,  \he J'u4 1• pl4 4vlac the perlocl of 'h• nr cri _ l i•  1939)  aq ~• 1uaariae4 a1 follow■:  1 ,._oraJl4ua fro■ llr. Oochraa lo th• lecrela17.  2 llr. Dt.lrlch'1 0ol4 19)8-19)9• file. Federal Reserve Bank of St. Louis  11p  8  llr. 1>1etrlch'1 •0o1c1 19:,s-9• tile .  ...  228  ,,_  luk et  -.1aa1  Mooal .l at 3~- 7625 per ouoe (la Loa4oa)  tu,095,000 115 .21J1, 000  la•- Tork  •••rl&Ma  13,1116.000  Jaak lwlH SaU011al luk •uoaal .._ ot Jelsl• (u\) llaat tor latenaUoaal•  10.031.000  ~.311.000 2,9)7,000  t,05,761,000 !!,!!:  lo7al  !bat !rea11117  ltat• lank of the u.1.1.•. C.a\ral laak of Arpallaa Ink of Jruoe (Mt) hmral heaaver  t  1,999,000 2,150,000 11,)77 .ooo 1,683,000  196,190,000 221,099,000  laCJ"eaN la pl4 oalculale4 froa apeolfle •lhorlsaUou luna•• la pl4 •• ehowa la Federal Reserve Bank of St. Louis  •••klT h.laaoe •••'•  • 14,669,000 • 10,"65,000 Federal Reserve Bank of St. Louis  229  CHART VII