THE MYSTERY OF STERLING

Evening Post, Volume CXIV, Issue 101, 26 October 1932, Page 8

THE MYSTERY OF STERLING

.The .price of gold in London ",yesterday reached -£6 5s '4^d per ounce fine; in other words the value of the British pound sterling was round about 13s 6d in relation to the currencies of countries remaining on the gold standard. The price of gold on Monday last was £6 2s Hid, so that in twenty-four hours sterling has declined in value .by 2s sd. ■ It is very difficult at-this distance from the City of London, the -financial heart of the world no less than that of the British Empire, to ascertain the reason or to fully understand the significance of this decline. A London financial writer whose comments on the situation are cabled to-day ascribes the fall in the value of the British pound to raids by Paris and Amsterdam upon sterling, also the withdrawal of French funds in London in order to meet impending State loans in France. But rumours of the British exchange equalisation fund of £150,000,000 being exhausted are also said, to account for Continental nervousness and the frenzied desire to recall' moneys from London. Theories and conjectures to account for this rapid depreciation of sterling could, no doubt, be multiplied ad infinitum;, but only last Thursday the British Chancellor of the Exchequer declined' to be drawn on the question of how the exchange equalisation reserve was invested, but in a speech delivered at Birmingham, four days later, he assured his hearjers of the arrest of the rising tide of unemployment and of definite indications of "more solid prospects of the beginnings of recovery to-day than atr any time since the Government took office." This assurance: —and presumably every word was carefully weighed before utterance—should do much to mitigate for the time,being the natural uneasiness over the risin" price of gold and the corresponding decline-in sterling.