MONEY RATES

New Zealand Herald, Volume LXX, Issue 21520, 17 June 1933, Page 11

MONEY RATES

POUND AND DOLLAF STABILISATION SCHEME [REPORTED AGREEMENI TEMPORARY MEASURE ■NO LINK WITH GOLI) I B? Tclecraph Preps Association—Copyrign (Received June Jc,, 5.5 p.m.) London, June ii Tho Daily Mai! says it has been de finitely decided that the Bank of Eng land and the American Federal Bank shall conclude a gentlemen' agreement for a temporary stabilisatioi of sterling and the dollar. The rate i Ftill undecided but probably will bo -1.0. dollars to the pound. It is understood that M. Moret ha pledged the Bank of France to aid botl Britain And America to maintain th agreement, thus making possible tin pre-stabilisation which is a necessar; prelude to final stabilisation based 01 a new) gold content of sterling. Tho News Chronicle says the gentle men's agreement does not mean tha either sterling or the dollar will b linked with gold. It is doubtful whethe the figure at which exchange is stabil ised will be announced. There is 11 indication that tho American represen tatives can guarantee that Americ will not be forced to devaluate i stabilisation checks the inflationar; boom. Tho Chronicle says the Chancellor 0 the Exchequer, Mr. Neville Chamber lain, is informing the market that h does not wish money to leave Englani to purchase American securities. Thus he is extending tho Treasury's ban. I is not intended io interfere with deal ings in American shares already hel< in Britain, but unless tho market' arbitrage difficulties are overcome th London prices of American shares wil be divorced from the New York prices Tho Chancellor is seeking tho co operation of dealers but his request ha not the force of law. His request to th market suggests that the autlioritic realise that the pound at present i over-valued, to the detriment of Britis] exports. 1 Also it suggests that Britain made : rash bargain in her endeavour to pate] ij/p an awkward failure at the outse of tho Economic Conference and t-< reach a durable agreement. A persistent report to the effect thai the Bank of England has. issued a confidential letter advising stockbrokers ir the matter of dollar dealings is widelj interpreted as heralding the stabilisation of the dollar and sterling. However, another view is that it is mereh discountenancing heavy commitments; pending developments. REPORT DISCOUNTED AMERICAN MINISTER DISCUSSIONS EXPLORATORY j (Received June 16, G. 5/ p.m.) WASHINGTON, June 3; /The Secretary of the Treasury, Mr "William Woodin, in a formal statemen this evening said the United State Government had not agreed to an; stabilisation of currency. Reports t( that effect from London could not b< founded on fact. The discussions in London in regard t( the subject must be exploratory onb r sa id Mr. Wood in, and any agreemem on the subject must be reached ir not elsewhere. GOLD STANDARD BRITISH POLICY UPHELD / - EARLY RETURN UNLIKELY (Received June 10, 5.5 p.m.) Times Cable LONDON, June 1C The Times says Mr. Chamberlain's statement at the Economic Conference should completely reassure those anxious souls who are apprehensive lest Britain should be rushed into a premature return to the gold standard. Few will cavil at the British decision to remain off gold until there is a reasonable certainty of stability of exchanges and higher price levels. Debtor and primary producing countries have only too much reason to know that since the war the gold standard has become an india-rubber footrule. Many of Mr. Chamberlain's conditions for a return to gold are incapable of early fulfilment. / The real merit of tho Chancellor's statement is that it clears the air and enables the delegates to the conference to concentrate upon approximate stability between the principal currencies, also upon measures to secure the conditions necessary for the re-estabiisb-cient of an international standard.