PRICES RISE: EFFECT OF DEVALUATION

Greymouth Evening Star, 26 September 1949, Page 5

PRICES RISE: EFFECT OF DEVALUATION

LONDON, Sept. 25 (Rec? 2 p.m.).—Stability in American raw cotton prices, after a record run of 19 weeks without a change, has been abruptly ended by-the devaluation of the pound.

The Raw Cotton Commission today authorised increases from tomorrow ranging from three-eighths of a penny to 3d per pound. This will cause shirts, sheets, dresses, and curtaining to be dearer in the shops early next year..

The windfall on Argentina’s holding in sterling, which has to be written, up because of devaluation, the increased cost of her meat exports to Britain during the next four months and the increased cost of dollar wheat, are not the only such burdens that devaluation has imposed on Britain, says Reuter’s financial editor. Guarantees similar to those granted to' Argentina were given on the sterling balances of Portugal and Persia. They are estimated at £70,Q00,000 and' £40,000,000. The extra lump of £17,500,000 to Persia is less serious than the additional burden of £10,000,000 each year, which devaluation is likely to impose on the current costs of the Anglo-Iranian Oil. Company, in which the British Government is a majority owner.