CURRENCY PROBLEMS

Otago Daily Times, Issue 21994, 1 July 1933, Page 11

CURRENCY PROBLEMS

SOLUTION ESSENTIAL CONFERENCE WORK DELAYED A TENSE ATMOSPHERE (United Press Association.) (By "Electric Telegraph—Copyright.) LONDON, June 29. The slump of the dollar dominated today’s activities at the conference. A tense atmosphere prevailed. It was felt that the critical stage had been reached, and that serious consequences might follow further delay in reaching agreement on the currency issue. Gold countries fear that the fall of the dollar will cause a fall in the pound, adversely affecting their trade, and possibly driving them off gold. They are pressing Mr MacDonald for an early decision regarding stabilisation of the pound. It is understood that M. Bonnet (France) announced that if a currency agreement was not soon reached he would seek the adjournment of the conference, on the ground that it would be useless to continue. Mr MacDonald met Messrs Hull and Cox this morning, after which the latter cabled to Mr Roosevelt inquiring his present attitude regarding stabilisation. A News Agency message stated that Mr J. Heyden, a leading Washington journalist, said that Mr Hull sent a long message to Mr Roosevelt outlining the insistent Continental views that America should agree to temporary stabilisation; that France, Holland, Belgium and Switzerland were in a virtual state of revolt, and it would not bd surprising if they withdrew from the conference failing improvement in the exchange situation, thus saddling America with the responsibility for the failure of the conference. The British and French have requested the Federal Reserve Bank to join the European central banks in stopping speculation in exchange. Statements of national viewpoints on shipping subsidies disclose that Holland, Norway and Finland are strongly behind Britain's advocacy of their abolition. DISCUSSIONS CONTINUED . s. ■ (British Official Wireless.) RUGBY, June 29. While many of the committees which are dealing with specific questions before the World Economic Conference met in private to-day to continue their work, major interest was taken in the currency problems, of which, in the opinion of many of the delegates, a solution has to bo found if the hopes entertained of the conference are to approach fulfilment. Many private conversations have been held, regarding the terms of which the closest secrecy is being maintained by participants. Discussions took place between the delegates of France, Italy, Belgium, Switzerland and Holland, which are gold countries, and Mr Ramsay MacDonald, Mr’ Neville Chamberlain, and Treasury experts. The Prime Minister, with other British representatives, also had conversations _ with American representatives, including Professor Moley. The question of the limitation of currency fluctuations was also discussed in the drafting sub-committee appointed by the Financial Sub-commission on the basis of the memorandum submitted by the United Kingdom delegation. EXTREME CURRENCY GROUPS BRITAIN AS MEDIATOR. LONDON, June 29. The efforts of France and other gold countries to secure at least moral British support for their position has not yet materialised. It is understood that the gold countries desired Mr MacDonald to declare that Britain would view with regret any further depreciation of national currencies. Britain, however, is reluctant to take sides, and prefers to'act as mediator between the two extreme currency groups. The British delegates are still striving to persuade the Americans that early de facto stabilisation is needed to give the conference a chance of success, but the Americans are adamant. Most of the delegates believe that the dollar will soon reach 4.50, or even over parity. STABILISATION OF DOLLAR NO ACTION BY WASHINGTON. WASHINGTON, June 29. Mr Dean Acheson (Under-secretary to the Treasury) told reporters to-day that no action was being considered in Washington regarding .the stabilisation of the dollar. Nothing had been done in this respect since President Roosevelt rejected the temporary stabilisation proposal forwarded from the .London Conference some days ago. MARKING OF GOODS NEW ZEALAND’S ATTITUDE. LONDON, June 29. Mr R. Masters (New Zealand), in the Marks of Origin Sub-committee, countered the arguments of the German, Belgian and Czechoslovakian delegations. He said that doubtless marks of origin in some cases were unfairly used and obstructed trade, hut the removal of the whole system of marking the country of origin would be a retrograde step. Properly used, marks gave the buyer the information that he was properly entitled to. New Zealand was anxious that the origin of its goods should be clearly indicated. THE POUND AND THE FRANC LINKING STRONGLY URGED. LONDON, June 30. (Received June 30, at 8 p.m.) Again the monetary situation dominated the conference throughout the day, the dollar jumping wildly in the foreign exchange market from in the morning to 4.25, and falling again to 4.30, closing at 4.29 J. Gold countries, fearing that the pound would follow the dollar, made efforts to secure from Great Britain an openly-pledged alliance for maintenance of the gold standard, and .strongly urged the linking of the pound to the franc. It is no secret that the Bank of England and the Equalisation Fund are giving considerable support to the French franc, and through it to lesser gold currencies. Continental delegates, therefore, are unable to understand why the British Government will not officially endorse this attitude by a declaration in favour of the maintenance of such currencies as remain stable. Such critics have failed to perceive the difference between coping with a particular situation at a particular moment and linking sterling with the franc, or committing Britain in regard to future stabilisation. The Government remain inflexible in its determination to resist any course likely to lead to the formation of a European bloc, and is supported in this attitude by dominion circles, where fears arc tn-

pressed with regard to the consequences of President Roosevelt’s inflationarypolicy. It is conceivable that the substantial rise in price levels in America which President Roosevelt expects may force lower price levels upon the rest of the world, with resultant complications, shaking the monetary systems, and eventually jeopardising the franc, with grave consequences to Britain if she is in the meantime luredi into linking the franc with sterling. • In these circumstances the measure of British resistance is possibly the measure of French apprehensions for the franc. It is reliably stated that Professor Moley and Mr Sprague Warburg, financial adviser, have been in consultation concerning a method by which fluctuations might temporarily be held between certain defined narrow margins. One plan would involve action by the central banks to prevent speculation. The Daily Express says American circles believe that stabilisation will occur during the week-end. THE CRISIS CONTINUES LONDON, June 30. (Received June 30, at 9 p.m.) The crisis in regard to stabilisation continues, and the latest development is a hurriedly convened meeting this evening between Mr Ramsay MacDonald, Mr Neville Chamberlain, and the British expert advisers with delegates of five European gold countries who had been conferring throughout the day. It seems that the United States is not yet prepared to discuss stabilisation, but may be interested in an international exchange device which would prevent wide speculative fluctuations ■'''in 'currencies without hindering President Roosevelt’s inflationary powers. It is understood that this was the gist of Professor Moley’s conversations with Mr Mact Donald. DEFENCE OF CURRENCIES GOLD COUNTRIES UNANIMOUS. LONDON, June 30. (Received July 1, at 0.15 a.m.) M. Bonnet, interviewed by the NewsChronicle, said: “ There is complete unanimity among gold countries with regard to stabilisation and a determination to defend currencies. We are preparing to make a categorical declaration to that effect.” Asked whether Britain would be associated with the declaiation, he replied; “That’s another .matter.. We are old enough to walk by ourselves. The position is that the declaration will be made, and Britain and America may join in if they wish.” The rise of Professor Raymond Moley to the status ,of right-hand man to President Roosevelt is one of the romances of modern American politics. Barely six months ago his name was unknown; to-day he is known as the man who took the United States off the gold standard, and at the head of a clique referred to as “ the brain trust ” in Washington exercises immense advisory powers over the monetary reorganisation schemes of the Roosevelt Government. In 1930, Dr F. R. E. Mauldon, senior lecturer in economics at Melbourne University, travelled throughout the United States and stayed a considerable time in Washington, meeting every American economist of note. J NAME NOT MENTIONED. “ I did not meet Professor Moley, and I did not hear his name mentioned,” said Dr Mauldon last week in an interview in Melbourne. “I studied every leading economic journal there, but his name did not appear upon any article. , In Washingtom'he .was apparently unknown, although he may have entered sociological and scientific, rather than economic fields. We have been in close touch with economic study in the United States since 1930, but Professor Moley has not been heard of until very recently. I should very much like to know who he is.” , The United States public itself is also finding the professor something of a mystery. . The “ brain trust ” is freely mentioned in responsible newspapers as the ruling power in Washington, where its influence is said to have completely overshadowed Cabinet. To this influence is traced the farm commodity allotment scheme, inflation of the currency, minimum wage and maximum price, the shorter working day, planned economy, controlled capitalism, and many other features of the Roosevelt regime. ' Now Professor Moley goes to the London Conference. It is believed that he has the United States stabilisation of currency proposals*in his -pocket, and it is an open secret that they are largely his own. THE PROFESSOR AT WORK. The most intimate glimpse one obtains of'the professor is by .cable. He is described as a square-shouldered, pinkcheeked man of 48, with greying brown hair arid a high domed head. He is said to work in a great suite of 'offices with a bevy of women secretaries, among whom are numbered his former pupils. In the American “ Wlio’s Who ” Professor Moley is named as the author of a number of economic works. He has been professor of public law at the Columbia University, and has conducted crime research for the States of New York, Illinois, Pennsylvania, and Virginia.