Fall in Sterling

Grey River Argus, 5 October 1934, Page 10

Fall in Sterling

CHANCELLOR’S CLAIM. ACCORDING TO DESIGN. RUGBY, October 3. A statement upon the position of sterling was made in a speech by "Mr N. Chamberlain, Chancellor of the Exchequer, at a dinner given to London bankers and merchants by the Lord Mayor. lie said that a year ago he had cited the establishment of the international monetary standard as one of the means by which international trade might be stimulated. “I am afraid we are not much nearer that than wo were a year ago,” he said,

‘‘but on the other hand one may re mark that during these twelve months, sterling has, on the whole, maintained a remarkable level of stability. It is true that recently it has been showing certain weaknesses, which generally occurs, about this season of the year, and which has probably been somewhat accentuated by financial and political events in other countries. I do not anticipate that that is more than a passing phase. I do think it is undesirable to attach too much importance to the mainteance of .sterling at a particular level. I have in this matter declared the policy of the Government many times, without, I am afraid, succeeding always in convincing people across the sea. I will try once more, and say that the policy of the Government is for the present to maintain the independence of sterling, that the Exchange. Equalisation Account was founded for the purpose of ironing out excessive fluctuations in. value of currency, and finally that we have never attempted, and are not attempting now, by means of that Fund, to fix exchange at a given point and to maintain it even within the fixed limit of value in face of, and in opposition to, seasonal or other powerful influences. ’ ’

Mr Chamberlain added that the link with sterling which lias been established by various countries, some within and some without the Empire, had been maintained unimpaired, and that it was becoming now the recognised feature of the international monel ray system. '‘The past year has witnessed further steps for the establishment of central banks within the Empire, the development of which might prove helpful in promoting common objects of monetary policy.” Gold has risen in price, by comparison wir.h .sterling, to £7 2s 2Ad per ounce. WILL STERLING DROP FURTHER? France and other gold bloc countries may be forced to devalue their currencies. A prediction of what might then happen, taken from a report by a London sharebrokng firm, which has been remarkably correct in the last two years in its judgment of gold prices and gold share prospects reads: ‘‘Devalution of the currencies of thft gold bloc will, in our opinion, be the signal for an almost immediate descent of sterling to the level of the dollar. In our opinion an appreciation of gold share prices eclipsing the earlier movements of 1895, and 1901, may well be witnessed at the end of this •year and the beginning of 1935.”

Some interesting speculations are taking place regarding the desting of the value that will be added to gold coins and bullion held by the Bank of England if that should happen, states an English financial journal. When the gold standard was suspended the gold holdings of the Bank, of England were as luw as £130,000,000. Since that date stocks of gold coin and bullion have been growing steadily, and last week the total stood at nearly £192,000,000. This gold is still valued at the old standard of 85s a fine ounce, whereas the current value is £7 2s 2!d a fine ounce, based on the exchange value of the pound against the franc. Monetary authorities consider that one of the first results of a return to the gold standard will be the enhancing of the gold stocks of the. Bank of England to the current value of gold. If this standard is fixed on the basis of 140 s a line ounce the gold aud bullion held by the Bank of England will then be worth more than £316,000,000 in value. The difference of approximately £124,000,000, however, will not become the property of the Bank of England. As this profit will arise out of the issue department of the Bank of England it will accrue by statute to the British Government. The London ‘‘Financial Times” thinks (hat. the profit will be used by the Government to reduce. Treasury bills. WHAT IS WOMAN’S SPHERE? Woman nowadays are found in every walk of life, and they do not allow feminine indisposition to interfere with their professional or domestic duties. The properly prescribed use of J.D.K.Z. Gin enables them to pursue, unimpeded, their daily routine. J.D.K.Z. Gin is particularly valuable in’middle life. —lO