CONFERENCE AT STANDSTILL

Greymouth Evening Star, 3 July 1933, Page 5

CONFERENCE AT STANDSTILL

U.S.A. REJECTS GOLD POLICY BREAKDOWN FEARED [BY CABLE —PRESS ASSN. —COPYRIGHT.] July 1. Conference circles are astonished at President Roosevelt’s stabilisation decision, as they had hoped on his acceptance of the request. Senator Cordell Hull will make a statement on Monday, to the,- effect that President Roosevelt rejects the proposal in its present, form. His statement, also will elaborate the American policy. The gold countries’ resolution which was approved by the British and American Conference delegations, and transmitted to President Roosevelt, advocated their maintenance of the gold standard at any cost, and also the return of other countries thereto. It added that the stabilisation ratio and the moment of stabilising must be the independent concern of each country. The countries with devalorized currencies approved thereof. --y It is reported that Professor Moley has recommended President 'Roosevelt to approve of a formula under which the Central Banks will use their resources to prevent extreme fluctuations in currencies. It is believed that Mr Roosevelt will agree to this, thus materially relieving the situation,’especially from the French viewpoint.

ADJOURNMENT PROPOSED. PARIS, July 1. The suggestion for the adjournment of the Economic. Conference is again active. It is understood that M. Daladier agrees with it. It is reported that Professor Moley warned President Roosevelt that a failure to subscribe to currency stabilisation would involve the Conference’s adjournment. One .opposition newspaper, demanding adjournment, declares that President Roosevelt, now in Campo Bello Island, is “90 per cent, a Robinson Crusoe.” PRESS OPINIONS.

LONDON, July 2. The “Observer” says that if ’the Conference is adjourned it will be dead, and so would the faith of half the world in orderly government and human co-operation. The “Bunday Expresff” says: M¥ Roosevelt is right. The gold countries are trying to bolster up the situation, which should be allowed to find a true level. The “Observer’s” Paris correspondent says: It is believed here that Britain is restrained by Australia and Canada, which are under the influence of the dollar, unless the dollar is included in the combination, and that the utmost Brita’in will do is to forrii an intermediate group, with the Dominions between the gold' countries and .the United States.

INTER-EMPIRE MEETING INFLATION PROPOSED. LONDON, July 30. The crisis took a further startling turn when the Dominions requested Mr MacDonald and Mr Neville Chamberlain to meet them. Mr Forbes, Mr Bruce, Mr Bennett and General Smuts attended. This meeting followed long conversations between Mi- Bruce arid General Smuts and then Mr MacDonald and General Smuts. The Dominions are insisting on an immediate statement of Britain’s monetary policy. It is understood that they wanted two undertakings. (1) That Britain will not link sterling to the franc. z (2) That Britain will not embark on a policy of raising prices,’ perhaps by 30 per cent, involving operations in the open market and possibly the unorthodox policy of not balancing the Budget but embarking on extensive public works. It is believed that Mr MacDonald and Mr Chamberlain are in a difficulty, as General Smuts emphasised that the linking of sterling and the franc would be disastrous to Africa, which depended on holding up the price of gold. Australia’s case was forcefully presented. It was that the collapse of world prices as a consequence of a sterling-franc understanding would affect Australia’s position as a debtor, especially in respect to Britain. It is understood that Mr MacDonald and Mr Chamberlain still oppose the raising of prices by unorthodox methods or inflation, but the apprehensions of General Smuts and Mr Bruce of the effect of linking sterling and the franc may possibly cause Britain to forego the proposal and 1 refrain from participation in the European Currency Bloc, simultaneously refusing to. follow the dollar.

British authorities think that America’s wave of inflation is subject to a sudden turn of the tide, and believe that Mr Roosevelt may shortly find it necessary to take the dollar in hand and negotiate stabilisation with Britain.

In the meantime, Mr MacDonald sits on the fence, while the Conference approaches its doom. Signs of a substantial agreement are most, remote.

PREMATURE PESSIMISM. (Received July 3, 10 a.m.) LONDON, July 2. Mr, Roosevelt’s rejection of the currency scheme has re-kindled the pesimism which prevailed early last week. Again, the threat is.heard that an early adjournment of the Conference is likely, but all the diplomats suggest that such talk is rash, until Mr. Hull reveals Mr. Roosevelts policy to-morrow. U.S.A.' AS PARIAH. LONDON, June 30. Air Hayden, writes: Putting it mildly, America is a pariah among the nations, sixty-five of which have been encouraged to believe that she would stimulate a recovery, whereas her delegates have blocked all progress. Yet France, which hitherto has been self-centredly Nationalistic, now leads the cry for international co-operation. The French delegates’ indignation at the private Downing Street Conference is boundless. Europe is unable to understand America’s unwillingness to check the fluctuations of the dollar, or how she, as the largest

creditor in the world, can sever international ties and still hope to collect her debts. CONVERSATIONS CONTINUED. (Received July 3, 1 p.m.) LONDON, July 2. A whole series of conference discussions was held this afternoon, in corisequence of the unexpected set-back received from Mr. Roosevelt. The first took place when Mr. MacDonald returned to Downing Street from the Chequers, where he intended to stay till to-morrow. He first had a long talk with Senator Hull, then with Mr. Chamberlain. Later the whole British delegation? assembled and discussed the situation for on hour. When this was over Mr. Chamberlain went to the Treasury and had a long talk with the representatives of the gold countries, France, Italy, Belgium, Switzerland and Holland. No announcement of any decision was made.

FRENCH INTENTIONS. PARIS, July 2. All rumours of the French intention to withdraw from the Conference were dissipated by the announcement that M. Bonnet was returning to London to join the Conference deliberation on Monday. It is understood that he received Cabinet instructions to work for a stabilisation agreement to work tain and European Powers, for later submission to the United States. Those well informed declare that the DaladiertG'overnriient decided that .it' the Conference failed to produce tangible results by July 31, France would withdraw from the Customs truce, and impose 15 per . cent, surtax . on American goods, as compensation for the devaluation of the dollar, just as she did on British goods, when Britain abandoned gold. ',

GOLD STANDARD OBJECTIVE. (Recd. July 3,2 p.m.) LONDON, July 3. The text of the gold declaration concludes: “The Governments subscribing to this declaration, whose countries are not on the gold standard, recognise the importance of the declaration without prejudicing their own future ratios in gold, and reiterate that the ultimate objective of their currency policy is to bring back the international standard based on gold under proper conditions. The Government of each non-gold country agrees to adopt effective measures to limit exchange speculation. Other signatory Governments undertaking to co-operate with the same end in view. Each Government agrees to ask its central bank to co-operate with other central banks, in limiting speculation, and at the proper time, reinaugurating the international standard.

SUGAR PRODUCTION. LONDON, July 1. The British memorandum refuses to support the draft sugar convention. It contends that continued equilibrium in sugar production and the disposal of stocks are endangered by the continuance of production in countries not parties to the 1931 agreement. The fundamental object of any scheme must limit such production.