CURRENCY PROBLEMS

Grey River Argus, 17 June 1933, Page 5

CURRENCY PROBLEMS

Gentleman’s Agreement STABILISING FOUND AND DOLLAR. (Aus. & N.Z Cable Assn.) (Received June 16 at 8 p.m.) LONDON, June 16. The “London Mail” says that it is definitely decided that the Bank of England and the American Federal Reserve Bank will conclude a gentleman’s agreement for the temporarystabilisation of the sterling and dollar. The rate is still undecided, but it will probably be 4.05 dollars in the £. It is understood that Mr Moret has pledged the Bank of France to aid both England and America to maintain tho agreement, thus enabling the pre-stabilisation which is necessary as a prelude to the final stabilisation based on the new gold content of sterling. The “Chronicle” says this is a gentleman’s agreement, and docs not mean that cither sterling or the dollar w-ill be linked to gold. It is doubtful whether the figures at which the exchange is stabilised will be announced. There is no indication that tho American representatives can guarantee that America will not be forced to devaluate, if stabilisation checks the inflationary boom. Tho “London Chronicle” says that Mr Neville Chamberlain is informing the market that he does not wish money to leave England to purchase American, securities, thus extending tho Treasury ban. It is not intended to interfere with dealings in the American shares already held by Britain, hut. unless the market arbitrage difficulties are overcome, London prices of American

.shares will be divorced from those of New York’s. The Chancellor of the Exchequer is seeking the co-operation of arbitrage dealers, but his request has not the force of law. Mr Chamberlain’s request to the market suggests that the authorities realise that the British pound is at present over-valued, to the detriment of British exports a-ml suggests that Britain made a rash bargain in an endeavour to patch up an awkward failure at the outset of the coniereiiee to reach a durable agreomen I. Monetary Commission MR COX (U.S.) TO PRESIDE. RUGBY. .Turn* 1.1. 1 he World Economic Conference a--J c<!ted the recommendation \>f the Bureau, that Mr Cox (United States) ho. Id pieside oxer the. Monetary I Commission, and that die viee-presr dents should be Singnor .lung (Italy), ami Dr. Kienbock (Austria), with M. I Bonnet (Era nee) as rapporteur. It also agreed that Dr. Colign (Hol! land) should preside over the Economic and Trade Commission, with Herr I Kra.mann (Germany) ami Don Lebveton (Argentine) as vice-presidents. The general discussion continued throughout the day. Mr Connolly (Ireland) suggested exploration of the i ossibility of m:v-<-in? the Bank of International Settiements the agreed clearing-house for :ut "mat ioua 1 exchange ami transfers, and the co->rdination of its activities with the central banks in ad countries. He thought that gold should be the yard-stick of values, and the ultimate factor •at* the settlement of balances. He would like to see the development of an international clearing-house of commodities. Tewfik Rush di Bey (Turkey) pm* phasised the importance of interna lionnl co operation. Alberto rani (Mexico) desired to h'd the rehabilitation of silver and the stabilisation 'of its price. JI. Sahiais (laitvin) advocated a gradual reduction of tariffs, in the Hist place on agricultural [Toduets and raw materials. Dr. Callas (Estonia I maintained that countries should be p'aeed iu a , , .... V t heir obli 1 al ions tn position to p<D 111 11 goods amt <»>’vices. Chancellor’s Conditions INCAPABLE OF EARLY FULFILMENT. (Times Cable' (Heeeived Jane 16 at S p.m.J LONDON, June I<>. ‘■The Times,” in a leader, sacs (hut J[r Chamberlain's statement should completely reassure anxious souls who may lie apprehensive lest th e British should be rushed tn o a premature return to the gold standard, kw Will eavill at the British decision t„ remain off gold until there is a reasonable certainty of the stability of exchanges and a higher price level. The debtor primary producing countries have only too much reason to know that the post-war gold ! < ta, ' aard has become an India-rubber footrule. Many of Mr Chamberlain's conditions for a return to gold are incapable of early fulfilment. The real merit ot the statement is that it clears the an and enables the delegates b. concentrate on the approximate stability between the principal currencies. and also on measures to secure the conditions necessary for the re-establish-meat of an' international standard. FRENCH VIEW. J PARIS, .lune 15. M Harriot, in an article in ‘‘Les Annalcs,” said: “I cannot see how the Ottawa imperial preferential tariffs can be aligned with the World C< nferenve programme.’’ PACE TELLING. LONDON, June 15. The Conference pace is beginning to tell- the long sessions, unofficial meetings, and nightly social engagements resulted in barely a hundred present at the. opening of the session. A speech by the. Portuguese, Senor Da.matta, failed, to arouse interest, but. the attendance was large, including Mr. Forbes and Mr. Masters, when M. Soong spoke. Mr. Bruce is not participating in the main debate, reserving the Australian case for the committees. The Conference heard a. vigorous speech by Mr. Bennett, who made the first definite disclosure on the wheat policy. He came out strongly for curtailment of acreage pari passu, and concerted efforts of importing countries to enlarge their demand, instead of, as hitherto, aggravating the fall in price by defensive tariff increases. There is a suggestion in the lobbies that Argentina will be amongst the restrictionists. A RUSSIAN MOVE. LONDON, June 15. Evidently aimed at the British embargo, Al. Litvinoff submitted to the Conference, a draft resolution under which Governments would agree to withdraw all measures of economic aggression, discrimination and boycott, irrespective of the motives underlying them. CABLE SERVICES. ''The International cable news appearing in this issue is published by arrangement with the Australian Press Association and the 'Suu-Herald* News Service Limited.” "By special arrangement Reuter’s world service in addition to other special sources of information is used in the compilation of the overseas intelligence published in this issue and all rights therein in Australia and Npxv Zealand reserved.” "Such of the cable news in his issue as is so headed has appeared in 'The Times’ and is cabled to Australia and N<”v Zealand by special transmission. It should bo understood that opinions arc not those of ‘The Times’ unless exp’ J'.isly -tated to be so.”