THE BANK RATE

Evening Post, Volume CVII, Issue 32, 9 February 1929, Page 12

THE BANK RATE

EFFECT OF THE EISE

FINANCIAL PRESS OPINIONS

'Times" Cablc3.

. ■ '. ■■'■'■.. LONDON, Bth February. ■ "The Times's" city editor stales that the raising of the bank rate immediately had the desired effect. Exchange on Now York rose to a level at which gold shipments become unprofitable. h\ other words the monetary equilibrium has been established. The raising of the rate could no longer be avoided without further trouble. Gold would have continued flowing out, and probably would have forced up the rate to 5% per cent, later in the year. The postponement would ' have cost the bank seven millions of gold, which equals ten weeks' • inflow from South Africa. The eventual reduction of the. rate would. be delayed to the same extent. The "Daily ' News," in an. editorial, raised the question of Treasury responsibility in acts like the raising of the bank rate, the effects of which are most unfprtunate to industry. It says: "We do not believe the present hole-and-corner system of regulatisig a vital national concern by a few experts will long be tolerated." The public will rightly demand that a Minister take the responsibility in explaining and "defending decisions." The "Financial News" states: "Nobody can pretend that the increase is anything but an unfortunate necessity, but business men should not. give its depressing effect undue psychological weight." .. ' - The "Morning Post" does not believe the general run of business will be checked by- the moderate rise in the price of money. The "Daily Chronigle" describes the increased bank rate as a crushing blow to industry. "Nothing in the industrial situation warranted the rise, which is due solely to conditions in the United States, where money is earning so much more than here that American balances are being withdrawn from London."