Surprise in London

Manawatu Times, Volume LVI, Issue 7062, 23 January 1933, Page 7

Surprise in London

DOMINION’S EXCHANGE INFLATION

A CHALLENGE TO FINANCIAL

TRADITIONS

United Press Association—By Electric Telegraph—Copyright

LONDON, Jan. 20

The Morning Post’s city editor says that New Zealand’s action in depreciating tho currency has surprised the city, as the exchange rate of £llO has been working smoothly. Some quarters thought that embarrassment might be caused owing to the new heavy depreciation not being justified by tho Dominion’s position in regard to tho balance of trade.

Competitive Depreciation of Currency

AUTHORITIES IN CONFLICT.

LONDON, Jan. 20.

The Manchester Guardian, in a subleader, says that Sir Hugo Hirst, as chairman of the Empire Committee of the Federation of British. Industries, takes the opportunity afforded by the New Zealand exchange position to utter some reminders of the pledges exchanged at Ottawa, for something like competitive depreciation of Empire currencies might bo discerned in the present movements. Whatever South Africa’s decision may have done towards speeding up the latest development, the New Zealand Government’s action is substantially in accordance with the advice of authoritative local economists though opposed to the advice of the Bank of England’s emissaries in 1931.

Competition Dislocated

HANDICAP TO THE AUSTRALIAN POUND

LONDON, Jan. 20.

The Guardian warns the Dominions against competitive depreciation of currencies. The journal says that New Zealand’s action dislocates the established competition between Australia and New Zealand exporters and increases the difficulties of those who are seeking to bring tho Australian pound to parity with sterling. It also postpones the establishment of a uniform Empire currency. The New Zealand and South African decisions undoubtedly hearten inflationists in Canada and the United States.

Whole World May Follow INFLATION SHOULD BE ORGANISED Received Sunday, 10.30 p.m. LONDON, Jan. 22. The Morning Post In an editorial on New Zealand's exchange, says: “The motive which actuated New Zealand is the same as South Africa. In the face of the continuing deflation of gold prices it may be doubted whether any country, even the United States, will ultimately resist tho pressure and seek escape by way of devaluation. But if it is carried out in a haphazard instead of an organised manner it is hound to create extreme chaos. Every precedent set in the manipulation of the exchanges enhances tho danger of world-wide competition in devaluation.”