Word: rumor
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Dates: during 1930-1939
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...After weeks of hard fighting and skilled maneuver in the mountains of Vizcaya Province, the Rightists under General Mola finally captured Durango and Eibar, key towns, but 16 and 25 mi. from Bilbao. With Eibar in flames and the road to Bilbao teeming with Basque troops in "headlong flight," rumor spread from Hendaye on the French frontier that the Loyalists in Bilbao had asked foreign diplomats at Saint-Jean-de-Luz to attempt to arrange a peaceable surrender...
...Treasury's gold price would be: 1) directly deflationary and 2) a quick method of halting the flow of foreign funds to the U. S. Since the intertwined problems of inflation and "hot money" are very much on the Administration's mind, last week's rumor about price-cutting in gold seemed by no means fantastic. Where it started no one could be sure. One story was that Russia sought a 60-day guarantee on the $35 price for future gold shipments, and having been refused for the good reason that the Treasury's buying policy...
Whatever the source of the rumor, it would not be downed. Repeated denials emanated from "high Treasury officials." At his mid-week press conference President Roosevelt said he had given no thought to a reduction in the gold price or to any other device for shutting off the gold inflow. Secretary of the Treasury Morgenthau also tried to down the rumor but only made it worse by replying to a direct query on whether a change was contemplated: "Not right...
Meantime the dollar was soaring in foreign exchange, the franc had another bad spell, and a near-panic occurred in South African gold shares on the Johannesburg Exchange. Not until after President Roosevelt emphatically denied the rumor a second time did the world's money-changers shake their jitters. The President said he knew of no plan to tinker with the price of gold, that all he knew about it was what he saw in the newspapers. He said he understood the story originated in the foreign press. Nevertheless, suspicion remained that the great gold scare had been founded...
...York Times's Arthur Krock suggested that a hint of cheaper gold prices might be useful in negotiating trade and money pacts with Britain, the Empire being by all odds the world's biggest gold producer.* Even if the Administration did not loose the gold rumor as a trial balloon, it certainly did not shoot it down on sight...