LONDON CONFERENCE

Otago Daily Times, Issue 21995, 3 July 1933, Page 9

LONDON CONFERENCE

APPROACHING ITS DOOM THE CURRENCY DIFFICULTIES SIGNS OF AGREEMENT REMOTE (United Pres* Association.) (By Electric Telegraph—Copyright.) . LONDON, June 30. The crisis, took a further startling turn when the dominions requested Mr MacDonald and Mr Chamberlain to meet them. • Only Mr Bruce, Mr Bennett, General Smuts, and Mr Forbes attended, This was followed by long conversations 1 between Mr Bruce and General Smuts, then Mr MacDonald and General Smuts, the dominions insisting on an immediate statement of Britain’s monetary policy. It is understood that they wanted two undertakings, first, that Britain will not link sterling to the franc, and, secondly, that Britain embark on a policy of raising prices, perhaps by 30 per cent., involving open market operations and possibly an Unorthodox policy of not balancing‘the Budget by embarking on extensive public works. It is believed that Mr MacDonald and Mr Chamberlain were non-committal, but General Smuts emphasised that linking sterling to the franc would be disastrous to Africa, which depended on upholding the price of gold. Australia’s case, forcefully presented, was that a collapse of world prices- consequent on a sterling and franc understanding would affect Australia’s position as a debtor, especially in respect to Britain. It is understood that Mr MacDonald and Mr Chamberlain are still opposed to raising prices in an unorthodox manner and to inflation, but General Smuts’s and Mr Bruce’s apprehensions as to the effect of linking sterling to the frane may possibly cause Britain to forgo the proposal anil refrain from participation in the European currency bloc, simultaneously refusing to follow the dollar. The British authorities think that America’s wave of inflation was due to a sudden turn of the tide, and believe that President Roosevelt may shortly find it necessary to take the dollar m hand and negotiate stabilisation with Britain. ... In the meantime Mr MacDonald sits on the fence while the conference approaches its doom. Signs of substantial agreement are most remote.

DESIRE OF GOLD COUNTRIES DECLARATION FROM BRITAIN. (British Official Wireless.) RUGBY, June 2. The work of the World Conference is still overshadowed by the problems of temporary currency stabilisation. European countries whose currencies aie based on gold are reported to desire from Britain a declaration on the bold standard to cover the period until the Conference Currency Commission sents its report. Such a declaration, it is believed, would have a steadying effect. A generally accepted, declaration in a form to which the United States might be able to subscribe would be ot greater value than a purely European pronouncement, and the subject waa taspassed at private meetings of several delegations with their experts. Two private meetings between the delegates of the five gold countries and Mr Ramsay MacDonald were held to-day. At the second of these, held this evening at No. 10 Downing street, Professor Molev (special .adviser to President Roosevelt) attended. ; The meeting was adjourned.

MESSAGE TO AMERJCA

LONDON, June 30

Following the Downing street meeting it was announced that all delegations had agreed on the text of. a message to President Roosevelt regarding the gold question and are awaiting President’ Roosevelt’s reply. M. Bonnet, In a statement, said that the gold countries had drawn up a joint declaration, and in this connection they sought the British views, then consulted Professor Moley, with the result that a message was sent to President Roosevelt which all delegations, including the American, approved.

THE PRESIDENT’S REPLY NEW YORK, July 1. (Received July 2, at 8 p.m.) It is learned that President Roosevelt, who is on vacation at Campo Bello Island, New Brunswick, will not commit the United States at the present time to any form of dollar stabilisation, which the President considers is a problem for the central banks to settle, and not the Governments.

CONFERENCE ASTONISHED ' LONDON, July 1. (Received July 2, at 9 p.rn.) Conference circles are astonished at President Roosevelt’s decision as they had hoped for acceptance. - Mr Cordell Hull will make a statement on July 3 that President Roosevelt rejects the proposal in its present form. The statement will also elaborate the American policy.

ADJOURNMENT SUGGESTED PARIS, July 1. (Received July 2, at 8 p.m.) The suggestion for an adjournment of the conference is again active and it is understood that M. Daladier is in favour of this. It is reported that Professor Moley warned President Roosevelt that failure to subscribe to stabilisation would involve adjournment. An opposition newspaper, demanding an adjournment, declares that President Roosevelt, in Campo Bello, is “90 per cent. Robinson Crusoe.”

MAINTENANCE AT ANY COST LONDON, June 30. (Received July 2, at 5.5 p.m.) The gold countries’ resolution, which was approved by the British and American delegations and transmitted to Piesident Roosevelt, advocates their maintenance of the gold standard at any cost and the return of other countries thereto. It adds: “The stabilisation ratio and the moment of stabilising must be the independent concern of each country. Countries with devalorised curiencies approve hereof.” The conference at Downing street adjourned, and M. Bonnet has departed for Paris.

MR ROOSEVELT’S VIEWS CAMPBELL ISLAND (New Brunswick), June 30. President Roosevelt, who is spending a vacation here, regards the question of the temporary stabilisation of currency as a banking rather than a governmental problem, and therefore outside the immediate realm of the troubled Economic Conference. * President Roosevelt made tins view known after being advised of Lonoon despatches quoting high British quarters as saying that they understood tint he had replied favourably to a plea to prevent erratic dollar fluctuations.

THE DOLLAR MARKET NARROWER FLUCTUATIONS. (British Official WUeless.) RUGBY, June 30. Fluctuations in the dollar market in London were narrower to-day. The rate opened at 4.27 and moved to 4.30, but closed at 4.26 L Gold currencies remained firm on the Stock Exchange. The markets were irregular, but British funds improved — war loan to 83 10-16ths. DRAFT SUGAR CONVENTION OPPOSED BY BRITAIN. LONDON, June 30. A British memorandum refuses to support the draft sugar convention. It contends that continued equilibrium of sugar production and disposal of stocks are endangered by the continuance of production by countries not parties to the 1931 agreement. The fundamental object of any scheme must limit such production.

THE WHEAT PROBLEM AUSTRALIA’S VIEWS. , SYDNEY, July 2. (Received July 2, at 9 p.m.) A conference of Federal and State representatives yesterday discussed the wheat problem, and jfc is understood that the Federal Government recommended that exports be restricted for two years until the world’s surplus is absorbed. Another proposal was for a 10 per cent, reduction, provided other wheat countries made equitable reductions and other countries lowered their import duties.

Mr Lyons promised to cable the resolution to Mr Bruce, and the Federal Cabinet will to-day discuss the resolution and Mr Bruce’s reply.

CENTRAL BANK'S RESOURCES LONDON, July 1. (Received July 2, at 8 p.m.) It is reported that Professor Moley recommended President Roosevelt to approve a formula under which the central banks will use their resources to prevent extreme fluctuations in currencies, and it is believed that the President will agree, thus materially relieving the situation, especially from the French viewpoint.

" PARIAH AMONG THE NATIONS "

LONDON, July I

(Received July 2, at 8 p.m.) Mr Nana Hayden writes; “Putting it mildly America is a pariah among the nations, 65 of which had been encouraged to believe that she would stimulate recovery, whereas her delegates have blocked all progress. France, hitherto self-centred and Nationalistic, leads the cry for international co-operation, and the indignation of the French delegates at the private conference was very pronounced. Europe is unable to understand America’s unwillingness to check the fluctuations of the dollar or how she, as the largest creditor in the world, can sever international ties and still hope to collect her debts.”