BRITAIN’S FINANCIAL POSITION

Evening Star, Issue 21011, 27 January 1932, Page 7

BRITAIN’S FINANCIAL POSITION

- REPAYMENT OF CREDITS " A NOTABLE SIGN Press Association—By Telegraph—Copyright. LONDON, January 26. “ The best news the market has had for months,” says a leading article in ‘ The Times ’ in referring to repayments of credits. “It is a notabic sign of the Bank of England’s strength, demonstrating confidence in its resources, especially when many banks throughout the world are gravely embarrassed, and it will increase British financial prestige and prove the pound’s ability to maintain its positon. The Indian gold arrivals have now reached £30,000,000, and have indirectly been helpful.”—London ‘ Times ’ Cable. ANOTHER TRIBUTE LONDON, January 26. (Received January 27, at 9 a.m.) The 1 Morning Post’s ’ financial editor says: “ The Bank of England’s announcement yesterday marks the completion of a transaction which, together with the credit obtained by the Government, will always stand as a record of the sincerity of Britain’s attempt to maintain the gold standard against overwhelming odds. Repayment without resort to gold shipments shows the skill with which the exchange operations were conducted. The fact that no renewals of the loans were sought indicates a strong position. There remains outstanding £40,000,000 which the Government obtained from France and the United States in August for a year.” STERLING APPRECIATES (British Official Wireless.) RUGBY, January 26, (Received January 27, at noon.) An appreciable improvement in sterling this morning followed the announcement that the Bank of England will complete next week the repayment of the outstanding credits to the New York Federal Reserve Bank and the Bank of France. The New York cable rate rose from the overnight figure of 3.44d0l to 3.46|. The city editor of ‘ The Times ’ describes the statement as extremely gratifying, adding: “ The fact that the credits are not being kept open is a demonstration of the strength of the bank’s position, for had the bank felt that it was desirable as a matter of precaution to keep the liabilities open in case of need, there would have been no difficulty in arranging for their renewal. The large sales of gold by India may have indirectly proved a helpful factor. No one foresaw that the suspension of gold payments would lead hoarders of gold, who in the last thirty years have absorbed about £365,000,000 worth, to begin to dispose of it. Already about £30,000,000 has been shipped from India since September 21, and melting continues. In this way India is not only making a profit for herself, but is making a useful contribution to world economy.”

The Manchester ‘ Guardian ’ says: “ The fact of the repayment being effected without a reduction of the bank’s gold reads as an agreeable surprise. The arrangements the bank made to repay in gold avoid an exchange loss of about 20 per cent, if dollars and francs were purchased at the recent rates of exchange.” STOCK EXCHANGE REACTION LONDON, January 26, (Received January 27, at 1 p.m.) The Bank of England payments led to a brighter tone on the Stock Exchange. Gilt-edged issues firmed on the strength of sterling. Australian and Now Zealand stocks mostly advanced £l. BALANCED BUDGET A POSSIBILITY TAXPAYERS’ REMARKABLE RESPONSE. (British Official Wireless.) RUGBY, January 26, (Received January 27, at noon.) Parliament reassembles next Tuesday. A Cabinet meeting was held this morning. It is understood that Ministers discussed the procedure for the opening stages. An early statement is expected to bo made to the House on the Cabinet’s decision regarding the views of its members on tariffs. In view of the figures disclosed in the latest revenue returns, a balanced Budget is regarded as definitely in prospect. The returns furnish further evidence of the remarkable response made to the appeal for the prompt payment of instalments of income tax due this month. During the week ended the 23rd inst., the income tax collected amounted to 17,1 millions, an increase of 7.2 millions over the amount collected in the corresponding week of last year. The total amount collected in the period from January 1 to January 23 is 69,9 millions, compared with 34.8 millions in the first twenty-four days of last year. The amount collected as surtax during the same week also shows an increase over the corresponding period of last year, and the total amount of surtax received in the first twenty-three days of the quarter was 18g millions, being an increase of 1.2 millions over the total received in the first twenty-four days of 1931. The total deficit now stands at 134 million pounds.