EXCHANGE EQUALISATION FUND

Hawera Star, Volume LIII, 26 August 1933, Page 11

EXCHANGE EQUALISATION FUND

"VX7HF.N moving the .second reading of '' the Exchange Equalisation Account Bill, to increase the Equalisation Fund by £200,000,000 to £350,000,000, Mr Hore-Belisha, Financial Secretary to the Treasury, said 1 the fund had served its purpose, which wais to keep Sterling in its natural commercial relationship with other 'countries, undisturbed by seasonal! or speculative aberrations. The intention of the- Chancellor of the Exchequer never was and never could! have been to try to repeal that natural law of ,commerce under which the 'balance of payment's fundamentally regulated the relationship with one cur,retry to another. The stability of commodity prices had been maintained; their price level was 97.7 in .July, 1032, ajmd O/.G in March. No other country had maintained its price level as stable as that, a'nd it was just to claim that the Ex-

change Equalisation Fund, together with Mr Chamberlain’s policy Of cheap money and abundant credit, had produced that very satisfactory result.

It had been repreesn'ted that they wdre engaged in a world gamble and that they were bound to. lose money. The reverse was the case. It was other people who were coming to. Britain to buy sterling and to find- temporary refuge for ..their capital. It was said': “Why did we not keep it hat capital outs” But it was impossible to distinguish money which came for legitimate commercial deposit from money which came for speculative purposes. The fund had been appreciated by traders of Britain and of other countries. The policy behind the fund wa.s both national and ini ter national, and every one. dealing with Britain derived benefit from it.