CONTROL OF EXCHANGE

Nelson Evening Mail, Volume LXVI, 15 June 1932, Page 8

CONTROL OF EXCHANGE

A GREAT RESPONSIBILITY “We are piloting a quarter of the world,” said Major Elliot, Financial Secretary to the Treasury, when explaining that the Exchange Equalisation Fund of EIhD.OOO.OOd was to be built round the old Dollar Account, which provided a nucleus of £25,000,000. “The convoy carries ni its hold not merely the treasures, but. a great portion of the hqjes of our ; Western civilisation. False orders given to our convoy might lead to a crash from winch our Western civilisation could hardly recover. We must realise that we are embarking on a policy in which the losses may be colossal.” The country had made a loss ,of £20,000,000 or £3(5,000,COO'in defending its currency. It was quite possible that losses might be made in the management of the fund, though it was hoped the gains they sought to secure would outweigh the risk. They had been urged to go to the limits of discretion in declaring the policy under which Ihe fund would be administered, but it was impossible to go beyond Mr Chamberlain’s declaration that be ' did not wish to see sterling forced to a level at which it wonld.be injurious to traders, and that the interests of the Government must be the interests of the trade and industry of this country. To secure would outweigh the risk. They had been urged to go to the limits of discretion in declaring the policy under which the fund would he administered, but it was impossible to go beyond Mi' Chamberlain’sdeclaration that he did not wish to see sterling forced to a level at which it

would bejiinjurious to and that the interests of the .'Government must be the interests of the trade and industry of this country. To secure that this policy, was- carried through,- the Governhicnt had' llie power of the' purse, and tlie House of Commons, the power of debate. He hoped the House’ would not foolishly force the hands, of those who carried so great a' responsibility, but would show, as in the past, that it knew when to speak and -when to hold its peace on great matters involving great national issues. “Think,” he continued,

“of the condition of the markets if I > stated- suddenly some.- vital,,'decision of tho - Government ; with.-, the' power and weight of £150,000,000 behind.me. We are surrounded by a crowd of witnesses, not all ‘of them actuated" by motives most, favourable to, Britain, .This is an experiment'., and, as in -Mt. experiments, there is a possibility of'failure as well -as of success. We boliove,. however, that the possibilities of failure 'ire more than overbalanced by the/.possibilities of success.” •-