STERLING DEPRECIATION.

New Zealand Herald, Volume LXVIII, Issue 20986, 24 September 1931, Page 9

STERLING DEPRECIATION.

INSTABILITY OF EXCHANGES HEAVY FALL IN DOLLAR RATE OFFICIAL FRANC QUOTATION. By JTelegrnnli—Press Association—Copyright. (Received September 2:!. B,HO p.m.) NEW YORK. Sept. 22. Cable transfers for the pound sterling closed at 4 dollars 19 cents, eight cents better than to-day's opening' quotation and 13 cents lower than yesterday's closing rate. The Canadian dollar closed at 93 cents. The pound sterling was quoted in Montreal to-day at 4 dollars 54 cents. A telegram from Paris states that the pound is officially quoted at 104 francs Commenting on Britain's suspension of j the gold standard, Professor A. 11. Tocker, of Canterbury College, said the effect of the gold standard is to keep exchange rates very close to parity, but once gold payments are suspended, exchange rates may fluctuate very widely. | The immediate tendency will be for the sterling exchange rates to fall; how far, of course, it is impossible to say. "The catastrophic fall in prices during the last two years has brought trade depression and unemployment resulting in grave financial difficulties in almost every country," Professor Tocker continued. "Consequently, less money is now needed for financing international trade, which has dropped in volume and value. Moreover, every country is now needing at home funds formerly held in London. Hence the depression has brought a very strong movement for the repatriation of funds previously held abroad. London, as the world's banker, has felt the full force of this movement, which has developed into a sort of run on the world's international banking centre. "London's strength and supremacy in the past have been due largely to her readiness and ability to meet her demands and liabilities in gold at uny time. What has been the source of her strength now appears to be tho source of her weakness. In the long run her position must bo absolutely sound, for other countries' long-term debts to London are probably in the vicinity of 10 times London's short-term debt to the world. "Now she is forced off the gold standard it appears not unlikely that New ' Zealand currency will be maintained nt approximately its present relation with sterling. Such a procedure would follow the precedent of the war years." GOLD FROM NEW YORK. ' LARGE AMOUNT EARMARKED. £22,421,000 FOR SHIPMENT. I 1 NEW YORK. Sept. 22. A sudden fall of 109.100,000 dollars (£22,421,000 at par of exchange) in the ' monetary gold stock of the United States ' was revealed to-day by a statement issued 1 by the Federal Reserve Bank announcing ! that this amount of gold had been set aside for foreign account, although it has ' not actually been exported. STOCK TRADING QUIETER. | BETTER NEWS FROM EUROPE. 1 NEW YORK. Sept, 22. Trading was quieter on the New lork Stock Exchange to-day and prices moved along a fractional scale. The market was generally constructive, and showed a readjustment to the British situation. The bond market also showed the influence of the improved sentiment which was reported from the various financial markets of Europe, and prices remained generally constant. Prices of Australian bonds varied only fractionally. 1 The financial markets were quiet toI day and returned to normal courses, i Stocks closed heavy, but the net losses were moderate. It was reported that the ban on short selling might be lifted to- • morrow. I DEALING IN EXCHANGE. CONTROL OF PURCHASES. ORDER BY TREASURY. LONDON, Sept. 22. ; A Treasury order states that until further notice purchases in Britain of foreign exchange or transfers of funds for acquiring such exchange shall be prohibited, except for normal trade and reasonable travelling purposes. CANADIAN DOLLAR. EFFORT AT STABILISATION. KEEPING GOLD IN COUNTRY. OTTAWA, Sept. 22. The Government has requested the mine owners to divert the gold usually sent to tho United States to tho mint at Ottawa, in an effort to stabilise the Canadian dollar, which was quoted at 8 per cent, discount in New York to-day. It is rumoured that tho shipment of gold outside the Dominion may be prohibited. RUPEE EXCHANGE. GOVERNMENT'S DECISION. CRITICISM BY MR. GANDHI. LONDON. Sept. 22. The Secretary of Slate for India, Sir Samuel Hoare, states that the Government has decided to fix the rupee exchange at Is 6d. During tho discussions of the Federal Structure Committee of the India Round i Table Conference to-day, Mr. Gandhi referred to tho decision regarding the gold standard and the stabilisation of the exchange, as stated by Sir Samuel Hoare, and said that while every thoughtful member of the Indian National Congress must sympathise with the British nation in this crisis, he must express his surprise and sorrow that a decision was taken over the head of the India, Legislature. Sir Maneckji Dadabhoy said that in tho circumstances he thought the Indian Government had done the only thing it could I do.