BRITISH FINANCES

Grey River Argus, 8 December 1931, Page 5

BRITISH FINANCES

FALL OF THE POUND ‘ Reasons Indicated (British Official Wireless.) RUGBY. December 5. Mr Neville Chamberlain, Chancellor of the Exchequer, speaking at Newpcfrt, discussed various causes which, led to the recent depreciation in the external value of the pound. Mr Chamberlain said that one of the chief was, perhap s a general uneasiness among the foreign holders of sterling balances in London, who saw hanging over Eur'c.pe a cloud of uncertainty about the future, and who thought that they would be more comfortable if they had liquid resources at home, where they would be available at short notice. He had no doubt that these foreign holders of sterling balances, who had been taking their funds away from London, would presently find that they had made a bad bargain. LONDON, Dec. 6. “The Observer’s” diplomatic correspondent, in reference to the stabilisation of the pound says: The British Ministers told M. Flandin that this would not be effected until three conditions are fulfilled: Firstly, British trade balance must be restored; secondly. the reparations problem is settled on a permanent basis; thirdly, a guarantee forthcoming that the international monetary policy will not again be misused as an instrument against the pound, if and when restored to the gold standard basis. AUSTRALIAN EXCHANGE RATES. LONDON, Dec. 6. The reduction in Australian exchange, although welcomed as a move in the right direction has not altogether satisfied Anglo-Australian commercial men, who maintain it might advantageously be greater. They are of opinion that the uncertainty due to the periodic fixations, sponsored by the Commonwealth Bank, will react more adversely to trade than the declaration of a definitely unvarying rate over a longer period, say six months. They point to the fluctuations of sterling and declare the operation of two unpredictable factors instead of one. will aggravate the difficulties of bill i brokers. I 1 Meanwhile, the weakness of sterling has not occasioned as much anxiety as expected. Financiers are of the opinion that the factors concerned can, if necessary, be corrected by a bold use . of the bank rate on traditional lines. The repeal of the Treasury’s ban on forward exchange dealings is expected soon, as the stock Exchange opinion, despite disquieting world conditions, is that Britain financial position is turning the corner.