TRADE AND FINANCE

Greymouth Evening Star, 11 June 1937, Page 7

TRADE AND FINANCE

BRITAIN’S EXCHANGE FUND

LOANS TO FOREIGNERS [BRITISH OFFICIAL WIRELESS.] RUGBY, June 10. The Chancellor of the Exchequer, was questioned in the Commons, regarding the operation of the Exchange Equalisation Account and foreign lending. He told the House: “The Exchange Equalisation Account is used for checking undue fluctuations in the exchange value of sterling, and not for the purpose of maintaining a fixed sterling value for gold.’’ He also stated that the policy of His Majesty’s Government was to stimulate international trade, with a view to maintaining industrial activity in the United Kingdom, but he added, in reference to a suggestion that foi* this purpose he should consider relaxing “the present absolute, prohibition of foreign issues,” it would be a misapprehension to suppose there was absolute prohibition on foreign issues. The terms of reference of the Foreign Transactions Advisory Committee showed special consideration was given to sterling issues on behalf of any borrower, where the proceeds were calculated mainly to produce direct benefit to British industry. STEADY IMPROVEMENT.

RUGBY, June 10.

Referring in a speech to trade recovery, which, he said, was proceeding steadily, Sir Kingsley Wood: stated that it was at present mainly based on the expansion of the home market, but the export trade was also benefiting from the increased purchasing power of many of Britain’s overseas customers. The extent of the improvement in trade during the last twelve months could be broadly indicated by the increase of 600,000 insured workers in employment in Britain. Developments were now spreading to industries in the areas which had suffered most in the depression.

STOCK EXCHANGE CONFIDENCE.

LONDON, June 9.

A more confident tone prevailed on the Stock Exchange this morning following the announcement of the Chancellor of the Exchequer that no change in British monetary policy was contemplated. Asked by the Opposition leader, in the House of Commons, when the Government’s new tax proposals would be presented to the House, the Prime Minister replied, “I cannot yet say with certainty when the proposal will be available, but the Chancellor of the Exchequer hopes to put the necessary ways and resolution on paper in the course of next week.”

GOLD SHARES -SLUMP.

CAPE TOWN, June 10.

General Smuts, in a. speech at Lydenburg, said the recent slump in gold- shares was caused by rumours deliberately circulated to persuade shareholders to sell at a loss so that others could buy at a profit. He added: “The best and most reliable information is that the gold price will be maintained.”

INCREASED PRICES.

LONDON, June 9.

The Board' of Tra'de index of wholesale prices, which has risen continuously since last June, was 1.7 per cent, higher in May than in April. During the year ended last month, the general index number had risen by about 20.5 per cent., food prices having increased by about 15.5 per cent., and industrial materials and manufactures by 23 per cent.

ANGLO-U.S.A. PACT

CANADIAN FARMERS

NEW YORK, June 9.

The Ottawa correspondent of the “New York Times” says that western Liberal leaders are strongly opposed to the sanction by Mr. W. L. Mackenzie King of a revision of the Ottawa agreement, requiring the Dominion to make concessions in order to facilitate a trade agreement, between Britain and America. Western primary producers are not convinced of the wisdom of making sacrifices to enable Mr. Mackenzie Xing to carry out his policy of the promotion of world peace through lessening trade barriers. The indications are, however, tnat Mr. Mackenzie King will strongly insist, and this may result in a schism in the party. It is indicated that Canadian gold-mining interests will be his ally. They fear that a reduction in the United States price of gold may result unless freer world trade is initiated by a comprehensive treaty between Britain and America, assuring the prosperity of the United States.

U.S.A. MANUFACTURERS.

NEW YORK, June 9.

The political correspondent, of the “New York Times” says that Mr. Roosevelt and Mr- Cordell Hull are in danger of distinct embarrassment from the development of a new opposition. American manufacturing interests are against the concessions on English manufactured goods, which may be necessary under the treaty. American production costs have recently risen enormously because of rises in wages and other labour concessions. Pressure has already been brought to bear on the Senate against approving tariff reductions. There is a strong feeling that a trade treaty between Britain and America would be an immeasurable force for world stabilisation and an assurance of peace, but the pressure of immediate economic necessity may vitiate these aspirations.

FOREIGN FUNDS

NEW YORK, June 10.

The North American Newspaper Alliance publishes a message which states that it. was feared that there was a potential danger of a sudden repatriation of the foreign funds invested in the United States, as mentioned on November 13, 1936. This fear has proved groundless. There have been no withdrawals of foreign balances. There was only a trifling repatriation of funds. On the contrary, Europeans have actually acquired more American stocks, causing a further gold-flux to the United States. This is embarrassing Mr. Morgenthau, Secretary of the Treasury.