NO CHANGE IN BANK RATE.

New Zealand Herald, Volume LXVI, Issue 20324, 3 August 1929, Page 13

NO CHANGE IN BANK RATE.

DECISION OF DIRECTORS.

RECENT ANXIETY ALLAYED

FRENCH DEMAND FOR GOLD

(Received August 2. 5.5 p.m.) British WireleSs. LONDON, Aug. 1. After the weekly meeting to-day of tlio Court of Directors of the Hank of England, it was announced that there would he no change in the hank rate. Regarding the recent heavy shipments of gold to Fiance, amounting to £12.000.000 in six weeks, financial correspondents explain that this gold efflux is an exceptional movement, and is not the result of unfavourable movement of the trade balance. Consequently the decision to maintain the hank rate at per cent was in accordanco with general expectation.

MORE GOLI) FOE PARTS.

MISHAP TO AEROPLANE.

BULLION CARGO SCATTERED. (Received August 2. 7.30 p.m.) British Wireless. RUCBY. Aug 1. While flying from London to Paris yesterday, a French aeroplane carrying a cargo of gold valued at £IOO,OOO was forced to descend at Smardcn West, Kent. Tho machine stopped on tho banks of the River Beult, and somo of tho boxes of gold were hurled into the water by the shock of the landing. The pilot and the mechanic wero not hurt, but the undercarriage of the machino was damaged. The bullion was recovered from tho river and transferred to another machine, which took it to Paris.

An. explanation of the French demand for gold and its influences on the monetary position was given by tho Financial News of June 24 as follows"For some time our market has been under the influence

of the uncertainty as to the French maturity of £80,000,000 in the United States in August next. It was feared that, should the French Government bo unable to obtain in good time the ratification of the Washington Debt Agreement it would transfer some of its balances from London to New York to rcplaco part of tho dollar balances used for the repayment of that maturity. In fact, it is believed that transfers with that object in view have already been going on for some time, in anticipation of the failure of M. Poineare's attempt to induce Parliament to ratify the agreement." After referring to the report that the British Treasury had notified the French Government that, in virtue of- the Churchili-Caillaux Agreement, it would claim an equal payment to that to be made to the United States, the writer added:—"lt seems probable, however, that, rather than made such heavy payments, France will ratify both agreements. In that case, part of tho balances which have been transferred to New York mav be returned to London. . .

If, disregarding considerations of yield, the Bank of Franco were to withdraw large amounts from New York it would definitely eliminate any possibility of a resumption of the Wall Street boom. Money conditions in New York would become normal once more, and the American market would reopen for foreign borrowers. Such action would increase considerably the financial prestige of France."

Since then, both dent agreements have been ratified, and payment of the £80.000.000 debt has therefore been avoided, as it becomes incorporated in the funding arrangement.