DEAR MONEY.

Auckland Star, Volume LX, Issue 230, 28 September 1929, Page 9

DEAR MONEY.

ENTERPRISE IMPEDED. Bank Rate Rise Unavoidable; No Alternative. I STOP EXPORT OF CAPITAL. , (Australian and K.Z. Press Association.) 1 LONDON, September 27. Commenting on the advance in the bank rate per cent the "Daily Telegraph," in a leading article, says that it goes without saying that the higher rate is unwelcome in both commercial and financial circles. Dear money impedes enterprise of every kind and is not calculated to assist the revival which has become manifest in recent months. Yet it would be unwise to exaggerate the consequences. Germany's revival has been achieved in spite of a far higher bank rate. Further, it must be remembered that there was no sound alternative. The '-Daily Telegraph's" Parliamentary correspondent says there is no doubt the Government will deeply regret the necessity of the increase on account of the restrictive effect on productive work generally as well as on its financial position, particularly in respect of the floating debt, which will substantially affect the Budget, and on the financing of schemes for the relief of unemployment undertaken by local authorities. The "Times" says a rise in the bank rate was inevitable and unavoidable in consequence of the unprecedentedly large gold withdrawals. The object of the Bank of England is to stop the export of capital which threatened to deprive our trades and industries of the credit supplies they at present enjoy. The "Daily Herald" recalls that the Turner-Mond Committee last year declared it was not convinced that it was either practicable or desirable that the credit policy of Britain should be determined more or less automatically by gold movements. The paper expresses the opinion that the raising of the bank rate strengthens the committee's demand for an inquiry into the best form of credit policy.