SLUMP OF THE £

Grey River Argus, 30 November 1938, Page 7

SLUMP OF THE £

BRITISH GOLD LOSS Devaliy tion of Sterling Urged [Aus. & N.Z. Cable Assn.] LONDON, November 27. The fall in sterling is arousing considerable comment. Because of the recent extensive transfers of gold from England, devlauation of the pound is advocated by the “Investors’ Chronicle,” which states it regards the pound as being even yet overvalued at 4 dollars 66 cents. The “Investors’ Chronicle” Recalls that last March Britain owned £836,000,000 in gold, of which the Bank of England had £538,000,000 and the Exchange Equalisation Account had the remainder. The latter at present possesses only £80,000,000, as £50,000,000 went home to France last May and about £120,000,000 .went to America owing to the September crisis. Now a further £50,000,000. if following. Accordingly a transfer from the Bank of England’s reserves to the Exchange Equalisation Account can be expected at any moment; The paper expresses the opinion that-it will remain over-valued until an increase in commodity prices affects the enormous American export surplus which is causing part of the trouble.

Because of the possibility of this transfer worsening the position through foreign nervousness the “Investors’ Chronicle” urges the stabilisation of sterling, saying that British and American authorities decided to allow sterling to fall to 4.60, or even 4.50, they should put the rate there and announce that no further variations would be permitted, thereby removing hopes of exchange profits and preventing capital fleeing at the first signs of trouble. Commodities are quiet, politics damping speculation. The general index of business activity Is about 104, about the level of April. .

BANKERS’ COMPLAINT.

AGAINST SELF-SUFFICIENCY

POLICY

WINNIPEG, November 28.

Sir George Paish, addressing the In stitute of International Affairs, dieted a complete world trade breakdown within a year, unless the policy of self-sufficiency, pursued by nearly every nation, were abandoned. The breakdown would first lead to world revolution, then to'world war. Every nation must reverse tariff policies .n favour of freer trade, if disaster were to be averted. The greatest hope js that Britain and United States will get together and announce to the world what they will do regarding freeing trade, on condition that Germany and other nations act reasonably. WAR RISK INSURANCE. RUGBY, November '2B. Addressing the Insurance Institute in London, Mr Walter Elliot drew attention to the difficulties in the way of, a scheme of insurance against war risks. 'He said it was a subject to which the Government was giving much thought, and a statement would be -’ made at an early date by Sir <T. SimOn> • # + • He added: A contingency of this kind was quite outside the scope of insurance as normally understood; that is to say, a system of graduated premiums carrying with them the right, to full; compensation. Full compensation implied, compensation in goods, not on paper, and no one could say whether sufficient goods would be available for full replacement whicn the insurance implied. WALL STREET BOOM. NEW YORK, November 28. The Stock Exchange turnover was 1,250,000 shares.