BRITAIN'S RECORD.

New Zealand Herald, Volume LXVIII, Issue 20985, 23 September 1931, Page 9

BRITAIN'S RECORD.

IIfAPPEAL FOR CO-OPERATION.

§ DEBTS FULLY MET.

lIISTEEILE GOLD HOARDS. defence of the pound JfO EISK OF INFLATION. By Telesmph—Press Association—Copyright. (Received September 2-2. P..(3 p.m.) Brifisli Wireless. RUGBY. Sept. oo * A bill of three clauses to amend the Gold Standard Act, 1925. was introduced jn the House of Commons bv the Prime Jfinister. Mr. Mac Donald. immediately after question time. The emergency procedure was invoked, and the bill was put through all its stages in both gooses A Royal Commission immediately signified the Royal assent. The amending legislation provides for flu suspension,,/ "until His Majesty, bv proclamation, otherwise directs." of the of the Act of 1925 which requires {he Bank of England to sell scold at a. freed price. The third clause authorises the Treasury to take such measures as may be expedient in connection with the exchange difficulties arising from the / juspension of the gold standard. Support by Labour Party. Thß second reading of the bill in the House of Commons was moved by the Chancellor of the Exchequer, Mr. Snowden. and then Mr. Henderson announced that- the Labour Party would not oppose the bill. The Independent Labour Party group : moved the rejection of the bill on the * ground that no provision was made for checking a rise in the cost of living. Mr. Henderson and other leading members of the Opposition did not support it, and the closure was applied. The bill was read- a second time by 275 votes to 112, and a third time without a divi«ion. , In the House of Lords 14 peers passed the bill through all stages in 10 minutes, without. discussion. Desire For Conference. The general aspects of the situation were reviewed, by Mr. Snowden in his speech on the second reading motion. He 6aid the distribution of the world's supply of gold had long been under the consideration of the Government and the Bank of England. They would have called a conference, but it was made abundantly clear that such a proposal would have been unwelcome to the other Powers, and therefore foredoomed to failure. / It, might be that the present crisis would bring home the pressing necessity for concerted action, and the British Government would miss no opportunity of ursine the importance of a conference on this problem. Payments to United States. ■Britain's post-war financial record, said / Mr. Snowden, was an honourable one. J'Tfte have set an example, both as to meeting obligations and helping reconstruction, and if we have failed it is because the undertaking is too heavy. It does not seem to me that other conntries can challenge our endeavour. "We exported to America during and immediately after the war actual gold td the value of £322.000.000 to discharge our obligations. We funded our war debts to the United States. I understand that ■we have paid £230,000.000, representing nearly 30 per cent, of the debt at the date of the funding. "Although the . British debt to the United States represents only 41 per cent, of the total war debts owing to the United Stated, our payments represent 8o per cent, of the total payments that country has received." Concentration of Gold. Mr. Snowden said France and the United States had now acquired threequarters of the entire gold in the world, and in their vaults it was largely sterilised and useless for the purpose of promoting international trade. • To make a historical statement was not, Mr. Snowden insisted, to overlook the help recently received by Britain from Prance and the Ended States, and he went on to pay a warm tribute to thofe countries, and particularly to the French bankers, who had maintained their London balances practically intact. The temporary suspension of the gold standard was necessary, the Chancellor explained, not because of any disorder in internal finance, but solely by reason ot the pressure on the exchange. By balancing the Budget Britain had made her internal position secure. Thoso who now displayed confidence in the pound sterling would net find it misplaced. Apart from sales due to temporary nervousness, there was no reason why sterling should depreciate to any substantial extent, or for any length of time, providr/d the 'finances of the country were administered with proper care. Duties of Creditor Countries. With a balanced Budget there was no danger of uncontrolled inflation. r l he country could face the position with caini confidence. ' Britain's ultimate resources were great, and the Government would *'atch the situation carefully. At the same time it was entitled to look for some recognition by the creditor countries of their responsibilities. The immediate effect of the crisis might, be as serious !,o the countries dependent c n London as to Britain herself. The world mast learn that the existing economic system could- not be maintained if everybody tried to maintain it by liquidating his investments. He hoppd the crisis would pave the way to better international co-operation. Mr. Snowden concluded with an appeal for unity. "We must get together as » nation and set to work to build up °"r position anew," fie said. "The question of the adverse trade balance will have to be dealt with. In the process of rebuilding we may haye to adopt many expedients, as we did in connection with the Budget, which in other circumstances would be repugnant. If we keep calm the country's inherent strength will pull it through." Mr. Snowden said the bill imposed no restriction on the importation or exportation of gold, or on the free transit of placed in safe custody with tha

nk of England by foreign Governments and central banks. Moreover, lotions in foreign currencies would continue to be met. The Government had decided that it WOuld be contrary to the national interests to allow further gold to go. urther delay would have benefited those wo showed the least confidence in sterling, at the expense of those who maintained their balances in London. The banks would scrutinise demands for exchange, except for present purchases, and conversions other than for bona fide commercial requirements, and foreign banks in London were co-operating in this matter. The Government, however, was taking powers to support, and reinforce if necessary, the voluntary action of the banks. NO CAUSE FOR ALARM. SMALL EFFECT ON PRICES. HINT TO BRITISH TOURISTS. (Received September 22, 5.15 p.m.) LONDON", Sept. 22. Tlie Chancellor of the Exchequer, Air. Snowden, in a speech broadcast throughout England, gave a concise resume of the whole sensational week-end happenings. The keynote of his speech was an urgent appeal for national steadiness. Mr. Snowden said the pound sterling would not go the way of the mark or the franc. The Government was able to avoid inflation. Once that vicious circle was started it might be impossible to check it. The British Budget was now most securely balanced. The Chancellor proceeded to outline the causes of the drain on gold and also of the renewed foreign uneasiness over the exaggerated reports of the trouble in the Navy. He explained that it was not internal troubles, but the troubles of other countries which had rendered the maintenance of the gold standard impossible, as inquiries revealed that sales of sterling were predominantly on foreign account. Mr. Snowden emphatically insisted that there was no cause for tho slightest anxiety about money in British banks, which was secure. Although the value of the pound might fall in terras of foreign currency, they could be assured that the extent of the fall would be limited. It was likely to result in higher prices on imported foodstuffs, but these should not be great. That was really the worst the great mass of the people had to fear. While the country was well stocked with essentials, there was not the least danger of a shortage. Mr. Snowden concluded by saying that British subjects abroad on pleasure might render a service by returning forthwith and spending their money at home. EFFECT ON RIVIERA. ENGLISH RETURN HOME. HEAVY LOSS TO FRANCE. (Received September 22. 11.15 p.m.) PARIS. Sept. 22. The effects of the fall in the pound sterling are already felt on the Riviera. A great trek homewards has begun among British ex-patriates who settled there when the franc was soaring. Now that the pound is unofficially quoted at 100 to 108 francs they are losing 3s to 4s on every pound, and arc offering to let or sell their villas to French people, who will miss their money also, as it is estimated that British tonrists spend £20.000.000 a year in France. This will be cut down by at least onehalf next year. THE HOME MARKET. DUTY OF BRITISH PEOPLE. PURCHASES WITHIN EMPIRE. (Received September 22, U.lo p.m.) LONDON. Sept. 22. The Daily Telegraph says the British people must make the protection of thenhome market their primary aim. They must buy British or Dominion goods. The Daily Express says they must prepare to establish an Empiie system of credits upon the sure foundation of an Empire customs union. i EFFECT ON WAR DEBTS. RAPID SETTLEMENT LIKELY. OPINION OF BANK OFFICIAL. (Received September 22. P. 45 p.m.) GENEVA, Sept. 21. An official of the Bank for International Settlements, in an interview, said the suspension of the gold standard by Britain was likely to result m the rapid settlement of war debts and reparation payments. DEBT SETTLEMENTS. BRITAIN'S SACRIFICES. WHAT AMERICA IS OWED. A concise statement of the effect of the debt settlements made by the I nit.cd States and Britain was recently published by the Morning Post as follows: T.MTi-S ,Pnt r £355,000.000 To the other Allies - - 1-210,000.000 £2.065.000.000 ! A mprica receives I>«i*■ lv j V j • £665.000.000 i prom Hi.tain | From the other Allies . . 420.CC0.000 . £1,085.000.000 America thus sacrificed £980.000,000. or 48 per cent, of her lending*. T. B nns'. ! a l,,n, T £433.000,000 To the other Allies . - 894.000,000 £1.377.000.000 Britain receives back—tSrsiw wSw £324.000,000 Britain thus sacrificed £1,053.000,000, oi 76 per cent, of her lendings. It, may be added that Britain will sacrifice the whole of the amount £522,000,000, which she> lent to her Allies out of her own resources, and of the amount borrowed, chiefly on their behalf, from the United States has to repay nearly 78 per cent. Other debtors to the United States are required to repay only 35 per cent, of their direct debts.