THE BANK OF ENGLAND

Otago Daily Times, Issue 21366, 20 June 1931, Page 11

THE BANK OF ENGLAND

CREDIT GRANTED TO AUSTRIA RESTORING STABILITY GERMAN MARKETS REACT (Britisii Official Wireless.) (United Press Association.) (By Electric Telegraph—Copyright.) RUGBY, June 18. (Received June 19, at 5.5 p.m.) The nows that the Bank of England had made an interim advance of 150,000,000 schillings to the Austrian National Bank pending the completion of negotiations for an international loan to the Austrian Government to provide the necessary funds to guarantee the liabilities of the Credit Anstelt was received at Vienna with an expression of keen satisfaction.

The promptitude of the Bank of England’s action is warmly approved in financial circles here. The city editor of the Evening News says that since the war the Bank of England has consistently pursued a policy designed to promote general world stability under the conviction that world monetary conditions are now so bound up together that every industrial country depends for prosperity on a measure of general stability. Its entry into the present Austrian complication, after appeals by the Austrial authorities, is actuated by this-motive. The city editor of the Evening Standard, commenting on the more assured feeling in markets which is reported from German financial circles, of which features of promise are that some money has already returned to Germany, and that the Reichsmark has been, steadied, says: “ A most important factor leading to greater confidence in Germany is the help which the Bank of England is giving to Austria. The credit granted to Austria should be the means of restoring stability in that country and increasing confidence throughout Central Europe.” A feature of the foreign money market in London to-day was a sharp recovery in German bonds. LOSS OF EXPORT TRADE. BANK’S INFLUENCE BLAMED. LONDON, June 19. (Received June 19, at 9 p.m.), Despite an official denial of the statements contained in the Daily Herald’s forecast of the Macmillan Committee’s report, the Evening. Standard’s financial correspondent agrees that the report will seriously question the Bank of England’s financial policy. He says: “ The committee is justified in raising the issue that the bank’s policy has been a major' influence in our loss, of exports, the growing unemployment, and the loss of industrial capital. Some of the committeemen hold that the bank failed to keep in touch with industrial requirements and followed too rigidly prewar conceptions. The automatic working of the gold standard restricted credit when its release would have led to an improvement in trade, and the bank injured the export trade by embargoes on foreign loans and the maintenance of unnecessarily high money rates.”

SPECIAL COMMITTEE’S REPORT. AN ERRONEOUS FORECAST. LONDON, June 18. Lord Macmillan has officially issued a statement, that the Daily Herald’s forecast of the Finance and Industry Committee’s report is entirely unauthorised, and is a complete travesty of its contents. The committee hopes to present the report next week. Thu Daily Herald’s lobbyist said that the report of the Macmillan Committee on Finance and Commerce, which was appointed in November, 1929, would be presented to the Government this week. The writer forecasted that there would be a majority report severely criticising the Bank of England’s policy during the trade depression and suggesting that the bank at present could materially improve trade by making credit more easily available and increasing the amount of money circulating.