SENSATIONAL STEP

Northern Advocate, 21 April 1933, Page 5

SENSATIONAL STEP

GOING OFF GOLD AMERICAN POLICY PRELUDE c

MEETING WORLD CONDITIONS.

BARGAINING MEDIUM

(United Press Association—By Electric Telegraph.—Copyright.) (Received 9 a.m.) WASHINGTON. April 19. The dropping of the gold standard is viewed in informed circles as a prelude to extraordinary measures to regain America’s lost foreign markets, effect debt readjustment and raise commodity prices, Avhich, if accomplished, will be inevitably at least at the partial expense of the so-called depreciated enrrenev countries.

Air Roosevelt formerly Avas opposed to “tinkering” Avith currency, but, in the opinion of his friends, the results of the domestic relief legislation, farm relief and public Avorks have been disappointing. The deflation Avliicli has taken place in the last month and the frozen assets of the closed banks, totalling <l2B billion dollars, have produced a condition in Avhich, Avith the competition of foreign countries off the gold standard, it appears necessary to meet the situation with a modified currency. If is believed that a' powerful bargaining material exists for coufer-

cnees Avith Britain and other countries, but the immediate anxiety is to stop the ruinous domestic deflation.

LONDON OPINION.

BANKING CIRCLES SHOCKED

UNNECESSARY COURSE

BLOW TO STABILITY

(Received 9 a.m.)

LONDON, April 20. The “Financial News” says the ucavs of developments in the currency policy of the United Spates arrived too late to produce its full effects on the markets. It came as a great shock to banking circles, Avbere it had been hoped that America would not deliberately wreck her currency.

The move is generally condemned as an act calculated to aggravate the crisis and throw the World back into chaos al a moment when it was hoped through the World Economic Conference that stability was in sight. .Britain went off the gold standard having spent every penny of her gold reserve to enable her to secure further credits. America- has gone oil’ while she is still in possession of gold with which she could have easily maintained the stability of her currency. She was not driven by necessity, but has taken the step in cold blood.

EXCHANGE EXCITEMENT.

■STEELING DOLLAE BATE

HIGH LEVEL. ATTAINED

(British Official Wireless.) (Received 9 a.in.) RUGBY, April 19

Messages from Washington to the effect that the Administration will not support the dollar abroad by moans or shipments of gold, created considerable excitement this evening in foreign exchange circles in London. The sterling dollar rate fluctuated freely and at one time .touched 3.62. It finished at 3.611, compared with 3.49 on Tuesday.

BRITISH FUNDS STEADY,

MARKET MOSTLY ERRATIC,

(British Official Wireless.) (Received Noon.) RUGBY, April 20

After a somewhat erratic day in the London foreign exchange market, the dollar rate of sterling improved at the close to 3 dollars 85 cents. Other markets were at first considerably affected by the American development, although British funds changed little, Avith War Loans at 31 per cent, unaltered at £lO2 1/3. Little selling occurred in the Kaffir market, which finalised firm, as did also Internationals generally. After the close, the latter shoAved renewed strength in the street market, Nickels jumping from 15] to 171 and Brazil Tractions from 10:] to II 1-16.

HECTIC ACTIVITY,

(‘TIER ENGLES SHOOT UPWARD

HEAVY PUSH OE BUYING

(Received Noon.) NEW YORK, April 20

British currencies continued to “skyamcket" today". The nominal opening quotation for the pound was It dollars 89 cents for United States funds. The Canadian dollar was quoted at 89] cents.

French francs rose approximately' L-” per cent, to 4.44 cents and other currencies also rose.

Heavy buying poured into the Stock Exchange at the opening, pushing the prices of numerous shares one to two dollars higher. Silver snared two to three cents an ounce'.

British currencies receded slightly ad noon, the pound being at It dollars 80 cents, 4 cents under the day’s high level.

Prfffit-taking in Into stock trading reduced gains about a half after an avalanche of early buying had sent prices up spectacularly. Billions were added to the quoted values of stocks and staples. At Chicago a maximum jump of .7} cents per bushel was scored on wheat futures on the opening. All other grain followed. Enormous sales of wheat by profittakers caused to react somewhat, initial gains being halved, the markel generally “coasting along” about 2 cents above Wednesday’s finish. CALIFORNIAN FRUIT. GROWERS ELATED. ADVANTAGE REGATNED. (Received 0 a.mj NEW YORK, April 10. A message from San Francisco states that fruit export circles there were elated as the pound sterling rose, and, by the same token, the. ability of British buyers to purchase California’s | fresh, canned, and dried orchard products.

The United Kingdom is California J s best foreign customer, but California of late has found Australian competition in the British markets a restricting factor. The rise of the pound has tended to cut down the advantage which Australia gained when Britain dropped the gold standard.

‘ ‘ TACTICAL MANOEUVRE.”

CONSTERNATION IN FRANCE

LEFT LAMENTING

(Received 10 a.m.) LONDON, April 20,

America's abandonment of the gold standard astonished both the British Government and City of London cir-i cles. It is widely regarded as a. tacti.-, cal manoeuvre by President Eoosevelt on the eve of Mr MacDonald’s arrival, especially as America, with masses of gold and vast natural has no reason for abandoning gold. Financiers are surprised by America’s blow at Britain’s last international bargaining point.

In Paris, apprehension prevails in financial circles at the money war between America and Britain, in which it is felt that both arc using weapons of currency inflation and leaving France at the mercy of the depreciated dollar and sterling.

It is considered that Mr Eoosevelt’s decision will make the international confusion worse.

A message from the Bevengaria, which, is nearing.- America, states that when Air Eamsay MacDonald learned that the United States was off the gold standard, he consulted Sir Frederick Leith-Eoss, chief economic expert, to the British Government. Air MacDoviald refused to make any comment, bu’t it is understood that the British mission felt that the situation for the talks with President Eoosevelt had been considerably altered. The financial editor of the “Evening Standard” says: “The significance of the American decision on the eve of Air AlacDonald’s arrival cannot be exaggerated. ’’ Britain, with depreciated currency, and an exchange equalisation fund, regarded the United States as the villain of the piece. The “Daily Herald” says: “America’s move demands international action to provide world inflation, not inflation by one or two countries, and thus in-

crease the purchasing power of the whole world. ; '