Defence of Sterling

Manawatu Times, Volume LV, Issue 6840, 22 April 1932, Page 8

Defence of Sterling

Measure Approved LITTLE ENTHUSIASM British Official Wireless. RUGBY, April 20. Although keen disappointment is felt it the absence in the Budget statement of any remission of taxation, it is generally felt that tho signs of improve--4 ment, although apparent, are not as yet sufficiently marked or stablo to justify any relaxation of effort. The Times describes Mr. Chamberlain’s proposals as “hard, but at any rato sound/’ 'and says that “most people -will probably on reflection bo inclined to feel Tclicved that tho Budget is based neither on vague optimism nor or clever but dishonest stratagems.’’ Tho Times ", adds that Mr. Chamberlain has given • the country a genuino sinking fund, which should entail a real net redemption of debt of no less than £32,500,000, and which, in a year when incomes have shrunk and prices are lower, represents a very creditable stop, which should enhance British credit.

Exchange Equalisation , It is emphasised that the exchange equalisation account, for which the Chancellor is seeking powers to borrow up to £150,000,000, will not lead to an “ increase in the debt in the ordinary sense. He merely 'desires to invest paper pounds in gold or foreign gold currencies. Lately thero has been a considerable foreign demand for sterling, which is tho paper pound, and its dollar value has risen from about 3.23 , dollars to about 3.50 dollars. This de--'mnnd has been partly due to the measures so effectively taken to balance tho Budget, but is due partly also to a loss of confidence in other currencies. The Daily Telegraph says: "This account should serve as a powerful and efficient instrument for the defence of sterling in any emergency, and for the maintenance of the financial stability which is the root of British prosperity as a great nation." The Manchester Guardian also agrees that “measures to protect sterling against embarrassing-fluctuations such as those of recent weeks are certainly needed, although they only make an early move for international co-opera-tion on currency problems more urgent."

Confidence Enhanced The Daily Mail thinks that the Budget will “add to tho confidence abroad in British national finance.’’ Tho Daily Express thinks that a nation which has risen so splendidly through great adversity deserved a Budget. reflecting more imagination, hope and faith. The Daily Herald says that it wa3 apparently framed in the expectation that the Government would remain in power another three or four years. The Daily News describes it as “carry on,’’ but yet while it is open to criticism, it is more satisfactory than might at any time have been feared. The Morning Post, whilo welcoming its soundness, regrets the absence of iron and steel taxation concessions, but

thinks the Budget notable for tho constructive measure of establishing the exchange equalisation account. The Budget proposals had little effect

on the stock markets, although disappointment at the absence of a reduction of the beer duty reacted on brewery shares.

, Another Budget ? LAUSANNE AND OTTAWA HE. BALDWIN RETICENT British Official Wireless. RUGBY, April 20. Hr. Stanley Baldwin, replying to a Parliamentary question as to the desirability of having a second Budget after the Lausanne and Ottawa Conferences, said that lie was unable to go beyond the Chancellor of the Exchequer’s statement that proposals might have to be submitted to Parliament later to give effect to the measures agreed upon at Lausanne.

Debate Continued VIEWS OF MEMBERS HIGHER PRICES VITAL LONDON, April 20. In the House of Commons, continuing the Budget debate, Sir Robert Horne (Con.) said that tho country was in a sounder position than for the past two years. The confidence of the whole world in our finaiicial methods had been restored, and, despito their sacrifices, tho people would prefer to endure a little longer rather than imperil this confidence. Matters were developing hopefully for the conversion of tho 5 per cent war loan, which would considerably lessen expenditure. The currency question w r as now overshadowed by tariffs. Mr. Chamberlain ought to inform tho business world of his objective in ■the management of tho value of tho pound. His aim should be to raise and maintain price levels a long way above their present rates. Prices were now below 1913, though costs were immensely higher.

With a loan of £150,000,000 it would bo possible to keep tho pound at any level desired. The revival of confidence would prevent it going too low. The problem would bo to prevent it going too high. The natural result of Treasury control would be to raise prices, which was tho first necessity of prosperity. Wo had not considered the position intolerable in 3928, when prices wore 29 pier cent, above tho present. Tho Lausanne Conference would have the fate of tho world in its hdjids. He vvas glad Britain would speak there with revived authority and would be able to show that an altruistic compromise was the Teal road of enlightened self-interest. No nation could possibly profit by another’s distress. Colonel Wedgwood (Lab.) agreed that the only thing that mattered was the currency policy. Surely tho National Government could have a national policy on this subject and tell us whether -there was going to bo a re-inflation of prices.

Mr. L. M. S. Amery (Con.j) said that

the sugar preference might have been more generous. It should havo been extended to tho Dominions, oven if it entailed adding a farthing a pound to foreign sugar. Our monetary policy, which would meet tho Dominions’ interests as well as ours, would bo as important a subject for discussion at Ottawa as tho fiscal policy. Only by getting back to tho price levels of 1928-29 could tho production of tho British Empire bo revived.

The Sugar Preferences INVIDIOUS DISTINCTIONS. Received Thursday, 10.35 p.m. LONDON, April 21. Tho Morning Post, commenting on tho sugar relief, presumes that tho partiality whereby Queensland and Natal are at a disadvantage compared with tho West Indies and Mauritius is only temporary pending the grand inquest at Ottawa. If so it is regrettable that Mr. Chamberlain did not say so and thus avoid tho impression that a now and invidious departure in policy is intended. Queensland’s' and Natal’s positions are hardly less serious than that of Mauritius and the West Indies.

How Fiji Will Benefit Received Thursday, 10.30 p.m. SUVA, April 21. If the estimated production of 100,000 tons of sugar in Fiji for 1932 is realised, Fiji will benefit to tho extent of £140,000 from the new British preferences. War Debt Payments NO MENTION IN BUDGET INTERPRETATION ABROAD BERLIN, April 20. “The death sentence on reparations” is the interpretation the press puts on the Chancellor's decision not to provide for war debt payments pending the Lausanne Conference. Most of the newspapers are elated at this decision, though official circles are reticent. It is reported hero that the German Budget will similarly exclude the mention of reparations.

Will Britain Default ? NOT IN POSITION TO PAY DEBTS Received Thursday, 10.30 p.m. NEW YORK, April 20. The Washington correspondent of the Nqw York Times states that semi-offi-cial comment to-day on the British Budget took the line that Mr. Chamberlain’s outline should not be accepted as direct evidence that payments to tho United States in the next fiscal year will be' withheld. It is stated that any discussion would be premature until after the Lausanne Conference, especially since additions to the Budget wero contemplated to handle Britain’s financial obligations not covered in the drafts submitted yesterday.

In responsible quarters tho opinion was given to-day that Britain was in no position to pay tho 171,500,000 dollars duo to tho United States for the fiscal year 1933, but that Franco and Italy were in a much stronger financial position to meet their obligations without serious strain on their resources. It is believed that Britain, after Lausanne, will either make additions to the Budget to moot tho full payments due to the United States, or will seek a readjustment of her debt if the reparations she receives are curtailed or eliminated. It is learned that 4 per cent, interest has been fixed on payments deferred owing to tho moratorium. It is disclosed that the Stato Department has sent a notice to 14 debtor Governments that they will bo expected to sign formal legal obligations to repay over a ten-year period the 246,000,000 dollars postponed in the moratorium.