BRITISH AIM.

Auckland Star, Volume LXVII, Issue 230, 28 September 1936, Page 7

BRITISH AIM.

PROMOTE RECOVERY. Interests of Empire Countries Considered. JOIN WITH FRANCE AND U.S.A. United Press Association.—Copyright. LONDON, September 27. The Treasury issued the following statement at 3 a.m. on Friday:— "The British Government, after consultation with the French and American Governments, decided to join them in affirming a common desire to foster those conditions which will safeguard peace and best contribute to the restoration of order in international economic relations, and will pursue a policy tending to promote world prosperity and improve the standard of living. "The Government, of course, in its policy toward international monetary relations must take fully into account the requirements of the internal prosperity of the Empire countries, as corresponding consideration will be taken into account by the French and American Governments. "The Government welcomes the opportunity of reaffirming its purpose to continue the policy it has recently pursued, the constant object of which is to maintain the greatest possible equilibrium in the system of international exchanges and to avoid the creation of any disturbance of the exchanges by British monetary action. "The Government shares with the French and American Governments the conviction that a continuation of this two-fold policy will serve the general purpose which all the Governments should pursue. Sterling a Free Currency. "This declaration arises from discussions between the British, French and American Governments in the. last few days. It does not involve any change in Britain's monetary policy. Sterling will remain free currency, unlinked with gold or other currency. "Further, the declaration is intended to make it clear that the British Government will not deliberately depreciate the pound sterling by way of reprisal for the monetary measures proposed by France. The British Government also has undertaken to consult other Governments in order to avoid exchange disturbance arising from the readjustment of the value of the franc. "The French Government has informed the British Government that, judging that the desired stability of the principal currencies cannot be ensured on a solid basis except after the re-establisliment of a lasting equilibrium between the various economic systems, it has decided, with this object, to propose to its Parliament the readjustment of its currency. "The British. Government and the United States Government have welcomed this decision in the hope that it will establish more solid foundations for the stability of international economic relations. Aim to Avoid Disturbances. "The British, French and American Governments declare their intention of continuing to use appropriate available resources so as to avoid as far as possible any disturbance of the basis of international exchanges as the result of the proposed readjustment. The British Government will arrange for such consultation for this purpose as may prove to be necessary with the other two Governments and their authorised agencies. "The British, French and American Governments also are convinced that the success of the policy set forth above is linked with the development of international trade. They particularly attach the greatest importance to action being taken without delay to relax progressively the present system of quotas and exchange controls with a view to their abolition. "In common with the French and American Governments, the British Government desires and invites the cooperation of other nations to realise the policy laid down in the present declaration. They trust that no country will attempt to obtain an unreasonable competitive exchange advantage and thereby hamper the effort to restore more stable economic relations which it is the aim of the three Governments to promote." ' A SAVING STEP. N.Z. PROFESSOR'S OPINION. NEW YORK, September 27. In a statement to a representative of the Australian Associated Press, Dr. D. B. Copland, professor of commerce in the University of Melbourne, who is visiting New York, expressed the view that the agreement in connection with the French devaluation of the franc marked the final step in world currency disturbances. With the rest of the gold bloc following France in due course, the last great single depressing influence on the money markets would be removed. "There will be some return of French funds from the New York and London money markets," said Dr. Copland, "with a temporary hardening of interest rates and reaction on the stock and commodity markets, but the underlying strength of the recovery movement in America and the great international demand for raw materials will enable the market to absorb all the shock of the French adjustment without much disturbance." The professor expressed the opinion that sterling had been too high recently and that it would react closer to the old parity with the dollar. The chief problem for Britain and America would be to prevent the reaction of sterling going too far, thus creating a demand for further devaluation of the dollar. TRADE MAY SUFFER. GERMANY FEARS REACTION. BERLIN, September 27. Although the devaluation of the French franc at first was dismissed in Germany as negligible, business circles fear that German trade will be hit, because of the fillip to French trade. Furthermore, countries with which Germany now has bartei agi eements may be attracted to transactions in devaluated currencies. The Bourse is normal. The devaluation of the franc did not come as a surprise, and it is regarded as not demanding any change in Germany's monetary policy. Nevertheless since France's step probably will be followed elsewhere, Germany's foreign trade must ■be detrimentally affected.