MR HOFFMAN SEES BENEFIT TO MARSHALL PLAN

Greymouth Evening Star, 21 September 1949, Page 6

MR HOFFMAN SEES BENEFIT TO MARSHALL PLAN

WASHINGTON,. Sept. 19.—The United States Economic Co-operation Administrator (Mr Paul Hoffman) today predicted that currency devaluation would stimulate European trade and give the Marshall Plan a better chance of succeeding. (.Mr Hoffman said he believed that devaluation would break down existing trade barriers and start a freer flow of goods within Europe. ‘.‘The greater the freedom of movement of those goods, the more successful will be the Marshall Plan,” he added. Canadian Action In Ottawa tonight, the Canadian Minister of Finance (Mr Douglas Abbott) announced that the Canadian dollar would be devalued by 10 per cent. As a result a. Canadian buying one United States dollar would pay 1102 cents, and if he sold one United States dollar he would obtain 110 cents. Mi' Abbott said the prices of the £ sterling would be 3072 Canadian cents buying, and 308-2 cents selling. [The margin between the selling and buying rates is absorbed by the exchange dealer as his profit on the transaction.] Mr Abbott told the Canadian House of Commons that the Dominion’s small reserves of American funds made devaluation necessary. With the British £ devalued, Canadian goods would meet stronger competition in the sterling and dollar areas. The various exchange adjustments would tend to increase ’Canada’s exports. Japanese Exchange Rates The Allied Supreme Commander in Japan (General MacArthur) today granted a request by the Japanese Government for authority to revise the sterling-yen exchange rate in proportion to the devaluation of sterling. The action means that Japan, for the time being at least, will attempt to hold its currency at 360 yen to-one United States dollar. Trade contracts approved up to last week will be honoured at the old rate 1450.3 yen to the £ sterling, and contracts approved ■ after today at 1008 yen to the £. Sterling Offered At Premium In New York NEW YORK, September 19.—Sterling for delivery tomorrow commanded a premium of more than two cents in New York today. It was the first time in years that such a premium had been paid above the official spot sterling parity. ■ Sterling was sold for 2 dollars 822 cents, or 22 cents above the official selling level of the Bank of England. However, . in subsequent dealings buyers bid up to 2 dollars 83 cents, with holders asking 2 dollars 84 cents. The strong demand seemed largely to be a result of insufficient holdings. Banking circles thought the premium would be short-lived. The £ sterling was quoted at 132 francs on the Belgian black market to-day, compared with the official rate of 122.72 francs. The Brussels correspondent of the United Press quotes leading Belgian brokers as saying that the reason for. this was that the black marketeers considered the new official rate too low. One broker said: “Sterling is worth more. Britain’s economic and financial plight does not justify such a low rate of exchange.” The £ sterling opened at 1015 francs in Paris today. This was formerly black market price. Price Of Wool Falls On Boston Market NEW YORK, Sept. 19.—The price of foreign wool declined by 31 cents per lb. on the Boston wool market tod Mr John Wright, president of the Boston Wool Trade Association, said that sterling devaluation had forced down'the-price by 48 cents, but an increased demand accounted for the substantial recovery. Clothing manufacturers in New England and New York State said sterling devaluation meant that they would use more English materials. Two leading manufacturers estimated that their imports would be increased by from 20 to 30 per cent. The manufacturers believed that, their higher priced lines would have increased competition from British clothing manufacturers.