EXCHANGE FUND TO BE INCREASED.

Auckland Star, Volume LXVIII, Issue 150, 26 June 1937, Page 9

EXCHANGE FUND TO BE INCREASED.

BRITISH PROPOSAL.

Authority Asked for Extra

£200,000,000.

FINANCIAL DISTURBANCE.

United Press Association.—Copyright. I (Received 9.30 a.m.) LOXDOX, June 23. The Chancellor: of the Exchequer, Sir John Simon, asked the House oi' Commons for authority to increase the Exchange Equalisation Fund bv .€200,000,000, but deferred a full explanation of the need for it until the debate on the Question. Sir John added that in addition t<> the recent release of hoarded «r<>!d. there had been much financial disturbance abroad, with a tendency for capital funds to move to London. "While I consider there is no reason why the present unsettled condition of capital should be permanent," he said, "the situation compels us to make further provision for the fund as an insurance against further movements of capital into sterling. "This is essential to maintain our general financial policy and support our undertakings and objectives under the tripartite agreement, which has been so widely approved."' The Chancellor was questioned as to why, only recently, he said the Exchange Fund was sufficient. Sir John replied: "There lias been no sudden change in policy but circumstances may develop." Mr. J. Maxton (1.L.P.. Glasgow) asked the reason for urgency and what had happened since yesterday to cause the alteration in the House's business. Sir John Simon said that doubtless Mr. Chamberlain would make a statement about the order of business. "! am conscious of a great responsibility and confident that the action I am proposing should be taken.'' Mr. Chamberlain then announced that it would be necessary to introduce a bill which would be taken through all stajres next week, beginning on Monday and concluding on Friday. The market interpreted Sir John Simon's announcement to increase the Exchange Eoualisatiou Fund to £.->.->0.000.n00 to "mean that the gold price will continue around £7. which caused a sharp rise in jrold shares. The price of gold to-day is £7 0/OJ. a rise of 2d.

WILI> SPECULATION.

Rumoured Devaluation of Franc. OUTBURST ON BOURSE. (Receive;! 11."O a.m.) PARIS, June 2">. Rumours of further devaluation of the franc resulted in a widening of discount on forward buying Three months were quoted at 120. and one month ahead 118 to 119. The Bourse indulged in a wild outburst of spc. illation in internationals, certain industrials also soaring.