DOLLAR VALUE

New Zealand Herald, Volume LXXI, Issue 21717, 5 February 1934, Page 9

DOLLAR VALUE

RATIO TO POUND EARLY DISCUSSIONS WASHINGTON REPORT EXPERTS ON THE ALERT EXCHANGE RATE PROBLEM By Telegraph—Press Association— Copyright (Received February 4, 6.45 p.m.) NEW YORK, Feb. 3 The Washington correspondent of the New York Times says an early discussion with Britain of currency stabilisation was authoritatively indicated today. Official conversations are expected to begin as soon as the first effects of the devaluation of tho dollar have been assessed. Tho United States Government is reported as desiring for test purposes a ratio of about five to one between the pound and the dollar, with a further adjustment to be made after the effect on tho internal economic conditions in both countries has been studied. The Government's experts have carefully watched developments in France, as admittedly tho continuous heavy flow of gold capital to America would embarrass tho French Government's determination to remain on the gold standard. Financial circles are of the opinion that France will not be forced off gold and that within a reasonably short time the dollar should attain parity with tho franc. The record year's deficit of about 1,900,000,000 dollars last week changed into a surplus of almost 1,000,000,000 dollars to-day, as tho published balance of the Treasury took in to account the profit to accrue from gold. This is merely a book transaction, as most of the profit is to be allocated to the stabilisation fund. The actual deficit remains and is sure to be increased for months to come. The strength of the dollar in foreign markets since Mr. Roosevelt's devaluation scheme was put into effect is causing some concern in official circles. It is understood that the President is determined to push it down to the parity at which he fixed it. In some quarters it is said that Mr. Roosevelt believes another devaluation will be necessary, which would make the de facto parity between the pound and the dollar about 6.08 to one. GOLD POLICY FINANCIERS PUZZLED RESULT STILL IN DOUBT (Received February 4, 5.5 p.m.) LONDON, Feb. 8 The gold policy of the United States is puzzling financiers in London. Nobody seems to be able to say what the result will be. As the Daily Telegraph says, there are two questions that none in New York or London can answer. The first is: How long will President Roosevelt be content to draw gold to America? Clearly he does not want it, and to take gold to America is to take coals to Newcastle. Tho other question is whether the American rumours of imminent conversations between the London and Washington monetary authorities have any truth? If so, whether there is any chance of a temporary agreement on that point. London opinion is sharply divided. FLOW OF BULLION TONS FOR AMERICA HEAVY SALES OF SOVEREIGNS (Received February 4, 5.5 p.m.) LONDON. Feb. 3 Two Royal Dutch air liners conveyed £1,000,000 worth of bar gold from Amsterdam to Southampton, en route to America. Tho w'eight was four tons. A Hatton Garden merchant received 4000 . sovereigns to-day in addition to 10,000 he had received in the past two days. A leading firm of bullion refiners states that sales of sovereigns have risen with a bound in tho past two days and a further increase is anticipated. However, it does not believe a sufficient number of sovereigns will be left to allow another rush on the same scale as that of 1932. Interest on the London Stock Exchange in the past few days has been mainly centred on tho goldmining section, which, under the influence of the meteoric rise in the prico of gold, has been enjoying another boom, especially Kaffirs, some of which have risen phenomenally. Australian goldmining issues also have benefited considerably. PROPOSED NEW BANK PRESIDENT'S OBJECTIVE AID IN FINANCING EXPORTS (Received February 4, 5,5 p.m.) WASHINGTON. Feb. 3 President Roosevelt announces plans for tho formation of a bank with the funds of the Reconstruction Finance Corporation for the purpose of partially financing exports, particularly for Russia. Tho capital of tho bank is expected to total 300,000,000 dollars.