CURRENCY CRISIS

New Zealand Herald, Volume LXXII, Issue 22119, 27 May 1935, Page 9

CURRENCY CRISIS

BATTLE FOR FRANC FALL NOT CHECKED FURTHER HEAVY SELLING BANK RATE RAISED AGAIN GOLD LOSS CONTINUES By Telegraph—Press Associafion—Copyright (Received May 26. 5.5 p.m.) LONDON. May 26 A message from Paris states that the bank rate was further raised yesterday to 4 per cent. This reflects official anxiety over the continued withdrawal of funds which the previous rise on Thursday from 2i to 3 per cent has not stemmed. With this second raising of the rate the battle for the franc has begun in earnest. It was followed by an increase in the rate for advances on gold bars from 4i to 5i per cent, while the rate for advances on 30 days' bills was raised from 3 to 4 per cent. The increases were announced after business hours, and will become operative on Monday. The French Foreign Minister, M. Laval, has hurriedly returned from Geneva, and will confer with the Prime Minister, M. Flandin, to-day. The rise in the bank rate has failed to check the fall in the franc. Heavy selling continued yesterday. A further shipment of gold valued at £2,430,000 left the Bank of France for New York. The Paris Bourse was in an agitated state all day yesterday. M. Flandin had a conference with M. Herriot, leader of the Radical Socialists, who is a Minister without portfolio, with reference to the Government's demand for special powers. M. Herriot promised his full support.

WORLD STABILISATION AMERICAN VIEW CHANGED WOULD WELCOME CONFERENCE (Received May 26. 6.35 p.m.) NEW YORK, May 25 The Washington correspondent of the Xew York Times states that the United States Government would welcome an early international agreement on currency stabilisation. It was learned today from an authoritative source that the well-known views of the Secretary of State, Mr. Cordell Hull, on the improvement of international trade through reciprocal treaties, combined with c\jrrency stabilisation, are now held in more respect that they were in the summer of 1933, when the London Economic Conference failed.

It is understood, says the correspondent, that the Government made overtures to several nations regarding international stabilisation, to which it received an encouraging reaction. If a conference could be called it is believed that President Roosevelt would be in favour of a meeting of representatives of a limited number of important commercial nations.- He feels that one of the serious defects of the London gathering was its bulkiness. For a long time some of the members of the Government have hoped that Britain again would take the lead in world co-operation, but now it has been decided that it devolves upon America to make the first move.