FRANCE’S TURN

Hawke's Bay Tribune, Volume XXI, Issue 306, 10 December 1931, Page 8

FRANCE’S TURN

BANK’S 30,000,000 LOSS. GOVERNMENT TO RESCUE. By Telegraph-Press Assn.—Copyright. Paris, Dec. 8. An officially inspired statement explains that the Government, in repaying the Bank of France's losses of £30,000,000 on sterling holdings, is merely ensuring that the bank will not lose through following the Government’s policy. Moreover, it cannot be permitted to bear alone the results of o ign decisions. It appears that the bank bought a large amount of foreign currency, principally sterling, between August, 1926, and June, 1928, to prevent the fall of the franc. It later wished to convert the holdings into gold, but the Bank of England protested that the London market could not face sales. Eventually, after the franc was stabilised, money flowed into Franco and the bank did not convert sterling, resulting in the bank, after the fall of sterling, being left with £62,000,000 in depreciated currency. The bank will be compensated by means of bonds repayable in 1945' and revised every six months according to sterling rate. The statement adds that in view of the nervousness of foreign markets it is essential that tho franc should be impregnable. SURTAX BILL. SENT BACk’tO _ COMMITTEE. Paris, Dec. 8. The Chamber of Deputies voted by 325 to 261 to refer the Surtax Bill back to the agricultural committee foi amendment. The defeat does not involve the Government’s resignation The increase was criticised as tending to raise the cost of living and intensify the economic crisis.