Temporary Stabilisation

Manawatu Times, Volume LVI, Issue 7185, 17 June 1933, Page 7

Temporary Stabilisation

Has Britain Blundered ? “BASII BARGAIN TO PREVENT AN AWKWARD FAILURE” United Press Association—By Electric Telegraph—Copyright Kcccivod Friday, 9.5 p.m. LONDON, Juno 16. The Daily Mail says it lias been definitely decided that the Bank of England and the American Federal Reserve Bank will conclude a gentleman's agreement for the temporary stabilisation of tho sterling and dollar. The Tato is still undecided but will probably bo 4.05. It is understood M. Morct has pledged tho Bank of France to aid both England and America to maintain tho agreement, thus enabling pre-stabilisation which is a necessary prelude to final stabilisation based on a new gold content of the sterling. The Ncws-Ohroniele says the gentleman’s agreement does not mean that either tho sterling or the dollar is linked to gold. It is doubtful whether tho figure at which exchange will be stabilised will be announced. . There is no indication that tho American representatives can guarantee that America will not bo forced to devaluate if stabilisation checks tho inflationary boom. Tho Chroniclo says Mr Neville Chamberlain is informing the market that he docs not wish money to leave England to purchaso American securities, thu3 extending the Treasury ban. j t i g rot intended to interfere with dealings in American shares already held in Britain, but unless the market arbitrage difficulties aro overcome the London prices of American shares will be divorced from New York’s. The Chancellor is seeking the co-op-eration of arbitrage dealers, but the request has not, the force of law. Mr Chamberlain's request to the market suggests that the authorities realise that the pound at present is overvalued to the detriment of British exporters, and suggests that Britain has made a rash bargain in an endeavour to patch an awkward failure at the outset of the Conference to reach a durable agreement. No Agreement on Stabilisation SAYS U.S. TREASURER Received Friday, 7.45 p.m. WASHINGTON, June IC. Tho Secretary of tho Treasury (Mr Woodin), in a formal statement tonight said that tho United States Government had not agreed to any stabilisation of currency. He stated that such reports from London cannot bo founded in fact. "Discussions in London with regard to the subject must be exploratory only, and any agreement on the subject will be reached in Washington, and not elsewhere,'’ he stated. No Immediate Return to Gold Times Cable. Received Friday, 9.5 p.m. LONDON, June IG. Tho Times, in a leader, says Mr. Neville Chamberlain's statement should completely reassure anxious souls apprehensive lost Britain be rushed into a. premature return to the gold standard. Few will cavil at the British decision to remain off gold until there is reasonable certainty of tho stability of tho exchanges and a higher price level. Debtor primary producing countries have only too much reason to know that the post-war gold standard has become an indiarubber footrule.

Many of Mr. Chamberlain's conditions for a return to gold aro incapable of early fulfilment. The real merit of the statement is that it clears the air and enables the delegates to concentrate on approximate stability betwoen the principal currencies, also on measures to secure the conditions necessary for the re-establishment of the international standard.

New Zealand’s Support of Co-operative Action OPPOSITION TO LIMITATION OP PRODUCTION. LONDON, June 15. Rt. Hon. G. W. Forbes, Prime Minister of New Zealand, was the last to address the plenary session at the World Economic Conference. He said he was particularly impressed by the speech of Rt. Hon. Neville Chamberlain, Chancellor of the Exchequer, whose suggested measures for the improvement of trade and monetary relations New Zoaland would do her utmost to support as a practical basis for co-opcrativc action leading to a general recovery. Unless commodity prices were so raised as to substantially reduce the real burden, existing debts must generally bo sealed down, which may indeed bo necessary in addition to raising the price level. Though the adjustment of debts must be a question for consideration mainly by the parties and countries immediately concerned* the problem was of such pressing general concern as to warrant conference consideration. Mr Forbes urged the Conference to deal with equitable shipping conditions the right of ships, without discrimination of nationality, to compete in trade which was not merely local and coastwise. Referring *o quantitative regulation of trade, Mr Forbes said that the producers of New Zealand disapproved of limitation of exports or production. Instead, they hoped for the removal of barriers and the,, restoration .of pm-

chasing power to enable tho absorption of increased supplies. “ It is in the Air ” Received Friday, 9,50 p.m. LONDON, Juno 10. The Daily Telegraph, in an editorial says Mr Forbes’ reluctance to agree to limitation either of exports or production is natural, but regulation is in the very air in our times. British Premier’s Tribute “MOST BUSINESSLIKE AND EXPEDITIOUS CONFERENCE.” LONDON, Juno 15. “I congratulate the delegates heartily on their proceedings since Monday. This is the most businesslike and expeditious conference over which I have ever presided,” said the Rt. Hon. J. Ramsay MacDonald, British Prime Minister, in closing tho general debate ht the World Economic Conference. Mr Forbes, who to-day changed hit mind and decided to speak, was absent when he was first called, but later addressed the Conference. Tariff Difficulty PARIS, June 15. M. Ilerriot, in an article in Les Annales, said, “I cannot see how the Ottawa Imperial preferential tariffs can be aligned with the World Conference programme.'.' '"-i'