On the superficially simple method of announcing that the Treasury will not buy any micro gold for time being, his comment is: "Such a step, taking unilaterally, would have disastrous effects on our economy. It would disrupt the foreign exchanges and gold bullion markets and would very soon cause such drastic disturbances in international trade, and even in the domestic sphere, as' seriously to impede the recovery' of business." It is, of course, obvious that the immediate effect (unless such cessation of gold buying were to cause a complete reversal of capital movements) would be to cause a sharp rise in the dollar and so to cripple American exports, which, it may be noted, in Mr. Morgenthau's view "play a role in the level of business activity much in excess of the magnitudes involved." Similar considerations apply to the more usual suggestion that the price of gold might be reduced. It has already been shown that there is little sense in the contention that $35 is "too high" a price.
Text read from the printed page and cleaned; old type leaves the occasional error.