Will France Leave Gold?

Manawatu Times, Volume 60, Issue 277, 23 November 1935, Page 7

Will France Leave Gold?

* Devaluation Now Only Matter of Months’ bank KATE AGAIN RAISED Lrs. u ' * nited EletUl ° The raising of the French bank rate to 5 per cent, for the second time in eight days, is regarded as symptomatic, of” crisis conditions. The bank, o Franco's losses for tho week ending 5S 15 totalled i12,«5,»» ' sterling, and it is admitted that the drain on gold stocks has been accentuated sinco then, which would mean a total loss, of gold during tho past four weeks of at least £36,000,000. ihere is a possibility, therefore, that the bank rate may be taken to 6 per cent. The London foreign exchange market saw a sudden wild scramblo to cover requirements by operators who have boon holding back in tho hope that the franc would recover, and sterling appreciated in all centres, Dutch guilders being particularly weak. The Manchester Guardian's Pans correspondent, asserting that an agreement has' virtually been reached between. the Chamber's Finance Committee and. the Government concerning M. Laval’s Budget policy, expresses the opinion that the plight of the franc is therefore, not so much due to the political situation as the growing conviction of tho public that devaluation is now only a matter of months.

, Between May 23 and May 28 the French bank rate was raised from 21 to 6 per. cent. It was then reduced until it was down to 3J per cent, on July IS, and it was raised to I per cant, on November 14...

International Monetary Stabilisation early action not envisaged m UNITED STATES. Received Friday, 7.15 p.m. WASHINGTON, Nov. 21. Tho administration does not envisage jarly international monetary stabilisation .. conclusion followed reports to-day that Mr Roosevelt is prepared some time in January to extend the life,of the two thousand million dollars stabilisation fund through manipula tion with which the Government has protected ..the dollar internationally sinco early in 11134. Tho money came from the so-called ‘‘gold profits” accruing from revaluation of the dollar, and under law the fund will be continued until January 30, 1936, with the President having power tc extend it by proclamation for one year. This, it is confidently expected, he will do in view of uncertainty over the monetary situation, domestic as well as international. It is,felt hero that world affairs are too unsettled for tho 'Government to withdraw support for the dollar and, furthermore, attention is drawn to the lack of action by other countries to bring about stabilisation. As a

domestic consideration tho President is represented as not wishing to free such a large amount of .money for a general Congressional appropriation, fearing that it, might be dissipated by an outright payment of the veterans’bonus or some other extravagant venture..