£200 MILLION LOAN

Grey River Argus, 8 March 1937, Page 5

£200 MILLION LOAN

TO SAVE FRANCE From Financial Collapse A GRAVE CRISIS. (Aus & N.Z. Cable Assn.) LONDON, March 6. The Paris correspondent of “The Tinies” says that four banking exports will control exchange, undet the leadership of M. Charles Rist, Honorary Director of the Bank of France. Their appointment is generally approved, jet paradoxically it has stimulated sales of French currency as the views of M. Rist and two of his colleagues suggest that the franc will shortly be allowed to find its level near a low er linii.,, equivalent to 113 to the £ set by the devaluation law. The Government in appointing a committee, has changed its monetary policy without changing its Finance Minister, and has simultaneously trans, ferred a delicate task from a harassed politician to detached technicians. LONDON, March 5. Dealings in the franc on the London Exchange were erratic. ■ Initial selling evoked strong support from Paris, PARIS, March 5. The Bank of France previously bought gold at the pre-deyaluation rate The new measure is expected to lure’ gold from its hoarding places. A committee of experts has been -appointed to supervise the operation of the exchange equalisation fund, and. to take steps to prevent the fluctuation if prices. Th e Bourse responded strongly, and Government and industrial stocks are higher. The Council of Ministers has decided not to control foreign exchange, and to authorise the free importation of and dealings in gold, from March 8.

The Council also resolved to launch a big national defence loan. (Received March 7, ,6.30 p.m.) PARIS, March 6.

One indication of the gravity of the situation in France is the fact that the President, M. Lebrun, on Sunday night will broadcast from every station in the country, “a solemn appeal to- the nation” to support the Government in its defence loan. This will be the first time that any French President has broadcast such an appeal. The loan bonds will guarantee the compensating of the holders in gold for every decline in -the franc. No French Government has given such a guarantee since the 1926 crisis. Control of Currency SHIFTED FROM POLITICIANS. BANKERS APPOINTED. LONDON, March 6. The Paris correspondent of “The Times” says; Four banking experts will control France’s currency exchange, under the leadership of M. Charles Rist, honorary director of the Bank of Franco. Their appointment is generally approved. Yet, paradoxically, the appointment of the experts has. stimulated the sales ofi French currency. The views of M. Rist and of two of his colleagues suggest that the franc ryill shortly be allowed to find a level near to its lower , limit equivalent to 113 to the pound, set by the Devaluation Law. The Government, by appointing the Experts’ Committee, has changed its monetary policy without changing its Finance Minister. It has l simultaneously transferred the delicate currency task from a harassed politician to the detached technicians of the Committee. Issue of the Loan DELAYED BY LAW TECHNICALITIES. PARIS, March 6. The Government -has postponed till Wednesday next .the issue of its projected loan in -connection with the scheme to restore financial - stability. The delay is owing to the necessity of modifying the technicalities of the French monetary law regarding the free negotiation of gold, and of clarifying the position of the experts who now are managing the Exchange Fund. It is expected that the essential measures will be passed by Tuesday next. Accordingly, President Lebrun’s broalcast has been postponed. M. Blum, the Prime Minister, in a broadcast address to-night, explained that the Government’s measures were aimed at permanently solving a situation in which mere expedients were dangerous, and in devaluation was disastrous.

He pointed out that the Government expected the repatriation to France of capital imported to other countries. The loan was being' issued, he said, in francs, pounds, and dollars, which are the currencies of the Powers' signing the Monetary Agreement last October. The investor will thereby bo protected against variations of currenand could) be repaid in the most advantageous of them,. M. Blum pointed out that the Government required two hundred million sterling. This amount, was. normal in the present, .crisis, as half of tho amount corresponded with extraordinary amraments credits.. It had been decided to cover these armaments by loan. REPERCUSSIONS ABROAD. (Received March 7, 7.30 p.m.) NEW YORK, March (i. The ’“New York Times’’ Washington correspondent says: The French financial developments have had repercussions; here. The Secretary of the Treasury, Mr Morgenthau, has been conferring with the new French Ambassador, M. Bonnet; also with Counsellor Mallett, of the British Embassy; Governor Harrison, of the New York Federal Reserve Bank; and also with President Roosevelt.

Mr Morgenthau has declined to reveal the character of these discussions, but it is understood that they dealt with problems arising in the tri-party scheme of currency stabilisation, and are in connection with a contemplated French loan. There -were persistent reports that such a loan would bo floated, or-at least in part subscribed,

in the United States. These reports are deprecated here. U.S.A. PRESIDENT VISITED BY CANADIAN PREMIER. WASHINGTON, March 6. The Prime Minister of Canada, Mr MacKcnzic King, arrived at' White House. Ho was a guest there overnight. He and President Roosevelt dined together. They spent the evening in .conversation. Tire subjects discussed have not been revealed.