STABILISATION PLAN

Ashburton Guardian, Volume 53, Issue 210, 17 June 1933, Page 5

STABILISATION PLAN

STERLING AND DOLLAR.

A GENTLEMEN'S AGREEMENT.

IMPORTANT PROPOSALS

(United Press Association—Copyright) LONDON, ■ June 16.

The "Daily Mail" says it has been definitely decided that the Bank of England and the American Federal Reserve Bank .should conclude a gentlemen's agreement for the temporary stabilisation of sterling and. the dollar.

The rate is still undecided, but it will probably bo 4.05. It is understood that M. Moret has pledged the Bank of France to aid both England and America to maintain the agreement, thus enabling prestabilisation, which is a necessary prelude to a final stabilisation based on the mew gold content of sterling. The "Chronicle" says: "The gentlemen's agreement does not mean that either sterling or the dollar will be linked with gold. It is doubtful it the figure at which the exchange will be stabilised will be announced. There is no indication that the American representatives can guarantee that America will not bo forced to devaluate if stabilisation checks, the inflationary boom." The "Chronicle" also says that Mr Neville Chamberlain is informing the market that he does' not wish money to leave England to purchase American securities, thus extending the Treasury ban. It is not intended to interfere with dealings in American shares already held in Britain, but, unless the market arbitrage difficulties are overcome, the London prices of American shares will be divorced from New York's. The Chancellor is seeking cooperation of the arbitrage dealers, but his request has not the force of law. air Chamberlain's request to the market suggests that the authorities realise that the pound at present is over-valued to the detriment of British exports, and suggests that Britain made a rash bargain in an endeavour to patch up an awkward failure at the outset of the Conference in order to reach, a durable agreement. "The Times," in a leader, says: "Mr Chamberlain's statement should completely reassure anxious souls who are apprehensive lest the British be rushed into a premature return to the gold standard. Few will cavil at the British decision to remain oft* gold until there is a reasonable certainty of the stability of exchanges and a higher price level. The debtor primary producing countries have only too much reason to know that the post-war. gold standard has become an indiarubber foot rule. Many of Mr Chamberlain's conditions for a return to gold are incapable of early fulfilment. The real merit of the statement is that it clears the air and enabled the delegates to concentrate on approximate stability between the principal currencies, and also on measures to secure the conditions necessary for the re-estabhsh-ment of an international standard."

NO AGREEMENT YET.

EXPECTED EARLY NEXT WEEK

(Received This Day, 8.15 a.m.) LONDON, June 16

Though it is officially declared that a stabilisation agreement has not been reached, there are reliable indications that a decision will be reached in a few days. It is expected that the agreement will be announced early next week.

STATEMENT IN AMERICA. WASHINGTON, June 15. The Secretary for the Treasury (Mr William Woodin), in a formal statement to-night, said that the United States Government had not .agreed_to any stabilisation of the currency. He stated that such reports from London could not be founded on fact. "The discussions in London with regard to the subject must be exploratory only," he said, "and any agreement on the subject will be reached in Washington, and not elsewhere.

DEVELOPMENTS AWAITED.

LONDON, June 16

What is going on at the Bank of England, in the direction of exchange stabilisation between sterling, the dollar and the franc,, is undoubtedly the ail-sufficing .reason why this morning the Monetary Commission and the Economic Commission of the Conference had the briefest sittings, and then adjourned until 10.30 on Monday. The Monetary Commission appointed a. committee to appoint a sub-com-mittee to deal with selected subjects of the agenda. It is proposed to co-ordin-ate the whole .suggestions of the week's general debate, under siih-hoad-ings including the production and marketing of wheat and other raw products? and measures and prohibitions affecting commerce.

STATEMENT AT WHITE HOUSE.

PRESIDENT ALONE MAY ACT

This Day, 12.40 p.m.) WASHINGTON, June 1G

It was stated at White House to-day that President Roosevelt had heard from Loudon nothing in the way of the suggestion for currency stabilisation. It was also assarted that nothing would be done, or could be done, by the Con-

ference on stabilisation, unless the action was approved by the President and the Acting-Secretary of State to the Treasury (Mr D. Woodin).