FLIGHT OF CAPITAL

Hawke's Bay Tribune, Volume XXVI, Issue 92, 30 March 1936, Page 8

FLIGHT OF CAPITAL

French Bank Rate Again Raised ATTACKS ON FRANC (By Telegraph—Press Assn,, Copyright.) PARIS, March 29. The bank rate has been raised to five per cent, following “bear” attacks on the franc, which this morning reached gold-export point. This is regarded as a further indication of the Government’s intention to remain on the gold standard. The “Daily Telegraph’s” Paris correspondent says: “Government loans have been steadily falling since the occupation of the Rhineland, and in some cases have reached new low records. The most ominous figure in the Bank of France’s return is an increase of nearly £14,000,000 in private discounts, indicating the withdrawal of deposits, especially from eastern districts. These, however, have ceased.” The “Daily Telegraph’s” city editor says: “The French are transferring cash to London. Only official intervention prevented the franc from depreciating to the level at which gold would be withdrawn from France, producing fresh rumours of devaluation.” LONDON MARKETS A Firmer Undertone LONDON, March 29. Mr Anthony Eden’s speech in the House of Commons favourably impressed the City, but It was too lato in the week to be reflected by market quotations. The undertone was firmer, but little business was passing. Australian loans maintained considerable strength during the dullness of gilt-edgeds, and there has been some consideration lately of the possibility of introducing in London the shares of some leading Australian companies. The most difficult obstacles at present are exchange and the need for careful dispositions in order to avoid double taxation. Paris, rather than London, continues to feel the severest effects of the international situation. Exchange control is very active and official quarters have been forced to deny panic rumours of impending devaluation of the franc. Selling on the Paris Bourse was chiefly confined to professionals, the public holding off. Confidence is expected to revive, provided no further shocks come from Herr Hitler.