WORLD FINANCES

Hawke's Bay Tribune, Volume XXVI, Issue 143, 2 June 1936, Page 9

WORLD FINANCES

‘Attack on Gold Currencies Recommences LONDON SUPPORTS FRANC By Telegraph—Press Assn.—Copyright LONDON, June 1. The attack on the gold currencies has recommenced. Dutch authorities, alarmed at the resumption of the gold drain, acted with usual promptness and raised the bank rate, with favourable results It is generally recognised, however, that the Dutch and Swiss currencies stand or fall with tbe franc, which has developed fresh weakness which only the intervention of London control kept within reasonable limits. It is now considered certain that M. I Blum’s Government will early propose in Parliament mild devaluation. It is committed to a large public works programme, for which it relies partly on expansion of credit through the Hauk of France and partly on public loans. It will not be surprising if devaluation is accepted without panic. The great financial interests, which have been long prepared for it, are now covertly advocating it. The Bourse is very firm despite the strikes. For the first time in years prices over a wide range of iron and steel products have increased on an average five per cent. The industry justifies the rise on the ground of higher costs of raw materials, especially pig iron and eoke. The increase will considerably raise ths cost of Britain’s rearmament pro gramme, which, ‘ ‘ The Economist'' points out, already totals 4.52 per cent of the national income—the highest percentage in history. It is likely to reach six par cent, in two years. Steel shares improved simultaneously. A feature of the commodity markets has been the heavy declines in tin and wheat. .Confidence in the outlook of tin disappeared as the decision of tho International Tin Committee to postpone fixing a quota drew attention to dissensions among various producers. The improvement in butter continues. Tooley Street merchants consider that the market is reading definitely towards higher prices. The main activity is concentrated in New Zealand descriptions. Australian are rather quiet The arrivals of fruit were again very heavy; the proximity of the Whitsun holidays resulted in easier prices. Interest in the stock market is negligible owing to the Derby and Whitsun. Gilt edged remain weak and industrials were barely supported. Australians were affected by the current dullness but a leading firm of stockbrokers draw attention to the discrepancy between Australian and New Zealand issues. They instance the fact that New Zealand three per cents, are at £99 and Australian at £94. This firm points out that Australia has a record of conservative finance and shows a satisfactory export surplus, while New Zealand, having nationalised the Reserve Bank, seems to have resolved on a financial dictatorship.