FRANC AND POUND IN ALLIANCE

Dominion, Volume 33, Issue 69, 14 December 1939, Page 9

FRANC AND POUND IN ALLIANCE

Wide Agreement

FINANCIAL POLICIES CO-ORDINATED Sharing The War Expenses (British Official Wireless.) RUGBY, December 12. The Chancellor of the Exchequer, Sir John Simon, speaking in the House of Commons, said that as a result of recent conversations with the French Minister of Finance, M. Reynaud, a comprehensive agreement had been arrived at between the British and French Treasuries which will secure in the field of finance co-operation corresponding with that already announced at the last meeting of the Supreme Council in other fields of activity. Summarizing some of the main features of the agreement, he said :— “It has been agreed that it is not in the common interest to avoid during the war alterations in the existing rate of exchange between the pound and the franc. Further, we have made mutual arrangements which will enable each country to cover its requirements for the currency of the other country and to utilize such currency freely," as agreed between us, without any question between ourselves to find gold.” Trade And Loans.

Thus sterling held by the French monetary authorities would be available for expenditure throughout the sterling area, and francs held by the United Kingdom monetary authorities would be available for expenditure throughout the French Empire. Neither Government would impose during the war fresh restrictions on imports from the other country for protective purposes or for exchange reasons, and neither Government would raise a foreign loan or credit without agreement from the other. The two Governments would share certain items of expenditure incurred in the common cause, such as financial assistance to other countries and the cost of the armed forces of their Polish ally. In accordance with the agreement, francs required by Britain, including those for the British Expeditionary Force, will be provided against a payment in sterling, and sterling required by France, including that required for the purchases of raw materials in the British Empire, will be provided against francs. Sharing War Expenses. The question of sharing equitably expenses necessitated by the conduct of the war which the two Governments have to defray in gold and dollars will be kept under review. The United Kingdom and French Treasuries will have frequent meetings to review the position of the Allied Governments as regards their resources in gold and foreign exchange. The two Governments will maintain contact on their policy regarding prices. In connexion with the decision that the two Governments will share certain items of expenditure in the common cause, it is stated that their contributions will be fixed on a basis which will take due account of the national wealth of each. In general the French contributiou will be 40 per cent, and the United Kingdom contribution 60 pdr cent, of the total. All these arrangements will remain in force till six months after the signature of the Treaty of Peace.