NEW VALUE OF STERLING.

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

NEW VALUE OF STERLING.

QUOTATION m DOLLARS. STOCK EXCHANGE IN STREET. ACTIVE MARKET CONDUCTED. fly Telegraph—Press Association—Copyright. (Received September 2-1, 1.15 a.m.) LONDON, Sept. 22. The dollar-sterling exchange rate to-day is 4 dollars 25 cents to the pound. Although the Stock Exchange was closed to-day, members thronged Throgmorton Street and carried on an active market. The cortimittee told brokers unofficially that there was no objection to dealing outside the house, consequently a lively street market developed. Quotations were shouted across the street, though it seemed impossible that business could be transacted in such a pandemonium. The Times says the fall in the value of the pound sterling was less than was predicted yesterday. At the end of the day it inclined to appreciate in terms of dollars and francs. In the absence of official quotations yesterday, only a very small volume of foreign exchange business was done. Dollar exchange was unofficially quoted at 4 dollars 25 cents. Agents in London were quoting the following rates for the pound sterling:—Paris, 100 francs; New York, 4 dollars 20 cents. The Reichsbank has fixed the pound sterling rate at 19.j marks. The Bourses at Zurich, Geneva and Basle have provisionally suspended sterling quotations. The Bourses at Brussels, Stockholm, Oslo and Copenhagen were not open to-day. Gold is quoted nominally at 84s 9'd per oz. The price on Saturday was 84s ll^d. CALMNESS IN CITY. ■' BUSINESS AS USUAL." FEELING OF OPTIMISM. LONDON, Sept. 21. The City is taking things very quietly. Except for a crowd of curiosity seekers watching groups of temporarily unemployed stockbrokers and clerks discussing affairs in Throgmorton Street everything appears perfectly normal and no one would imagine that England is in the midst of a financial crisis. The banks are carrving on business quietly and calmly as usual. Little out ot the ordinary is apparent on the produce markets, although prices of many commodities show advances, notably, cotton, a lb., rubber, 7-16 d, also metals, sugar and wheat. Business in foreign exchange is practically at a standstill awaiting events on the Continental Exchanges. It is recognised in well-informed circles that some depreciation in the value of th# pound for the time being is inevitable, but it is not likely that there will be anything so great as the falls which occurred on the Continent. No one is prepared to hazard an opinion what effect the gold standard decision will have on Australian exchange. , Australian banking circles consider it too early to say. Theoretically, of course, the Australian pound should improve, but as Australian bankers have said: " You cannot depend on theories." In general an optimistic feeling prevails that the spectacle of a great financial Power such as Britain forced off the gold standard, not through any internal weakness, but by the malfunctioning of the world's monetary system, followed bv demoralisation, will have a salutary effect in waking world opinion to see the need for concerted action to deal with the fundamentals of the depression. - A message from Paris says the newspapers there, of all shades of opinion, express admiration of the determined courage with which Britain is facing danger. INDIAN CURRENCY. BEST STEP ADOPTED. STATEMENT BY MINISTER. k ßritish Wireless R r Sept. 21. Referring to the gold standard decision | at to-day's meeting of the Federal Struci ture Committee of the India Conference, Sir Samuel Hon re. Secretary of State lor India, said Britain's system of national finance was as sound and honest as any li n the world, and the inherent wealth and I productive power of the nation were ! almost limitless. The way had already ! been paved fur a revival of confidence in j this country when the crisis broke, i It was precipitated by the action not | of British citizens, but of other nationals j who were nervous as to the conditions in their own countries and ignorant of the true position of Britain. For a tempoiary period, therefore, this country would be" obliged to protect itself iin the mariner announced. The case, how | e .-er, must be viewed in its true propur- ' tions. At the moment when almose every other country was faced with a large dftfif-t, Britain now war. balancing her j Budget. Heavy liurdcns were being wil- ; lingly shouldered by the taxpayers and 'drastic retrenchments were being made j in all possible directions. Unemployment finance had been oveihauled and borrowing for that purpose had been ended. Hie basis for stability thus had been laid and the foundations necessary for a full restoration of confidence had been firmly secured. ' Regarding the effect of the decision in India, Sir Samuel said that since the fixing of the rupee by statute at 13d, sterling bad until to-day been synonymous with gold and for all practical purposes the stability of Indian exchange had been based on sterling. Indian trade had been financed through sterling and the greater part of India's external obligations was in terms nf sterling. To follow gold, and so to increase the sterling value of the rupee at this juncture was out of the question. Therefore it had been decided to maintain the present currency standard on a sterling basis. He was satisfied that was the right course for India and the one most conducive to Indian interests. Tha Viceroy of India, Viscount Willingdon, to-day issued an ordinance temporarily relieving the Government of the obligation under the Currency Act to sell gold and sterling. The banks and stock markets throughout India are to remain closed to-morrow.