WORLD CURRENCY

Otago Daily Times, Issue 22999, 30 September 1936, Page 9

WORLD CURRENCY

STABILISATION AGREEMENT TREMENDOUS POSSIBILITIES REMOVING CAUSE OF UNREST (British Official Wireless) (United Press Association) (By Electric Tele’raph—Copyright) RUGBY, Sept. 28. The financial measures announced on Saturday are welcomed by the press.

The Times says: “The immediate objects are to prevent any disturbance in the exchange rates such as might otherwise be occasioned by the readjustment of the franc, and as a beginning to get rid of quotas and exchange controls now obstructing international trade. Other nations are invited to co-operate in this policy. There is at long last a real prospect of negotiations which may lead by gradual steps to effective economic co-operation between nations, and thus to mitigation of political fears and suspicions. The Daily Telegraph says: “After the first efforts at adjustment, m which quotas and exchange agreements will all come under review, trade should obtain a strong stimulus and internal sufficiency become a discredited doctrine. In the common action of France, the United States, and Britain there is the fairest promise since the war of ultimately bringing trade back to normal conditions and removing the most powerful factor in world unrest.” The Manchester Guardian says: “The task before Governments is that of framing an economic policy in each country so as to get the best of the world’s goods for one s money instead of putting up with inferior goods and smaller quantities of them. The three Governments are now pledged to a measure of cooperation perhaps never before equalled except between the Allies in wartime, and 1 other countries may decide to join inA _ «rrv, o The Morning Post says. ihe joint declaration of Britain, France, and the United States offers the hope that the stabilisation, at any rate de facto, is at last within the range of accomplishment. If this hope proves justified the advantage to international trade should be inestimable.”

FUNDS RETURNING TO FRANCE , ' LONDON, Sept. 28. The effects of the monetary devaluation were much more pronounced in the city m the afternoon. Funds are swiftly flowing back to France, resulting in substantial falls in English and French issues, including gold mines. Gold was unofficially quoted in the afternoon at £7 Os 10d. The Bank of England purchased £272,114 woith of bar gold. t . , The bullion market report states that 427 oars of gold, valued at £1,200,000, were soldSTERLING AND GOLD i LONDON, Sept. 28. To-day’s price of gold is the highest since Ma 2, when it was £7 0s lOd. Samuel Montagu and Co., bullion dealers, explain that both on Friday and to-day the price of sterling and the price of gold were fixed on a basis of the Ainerican exchange. As the value of the pound to-day had fallen 12 cents gold was expressed in terms of sterling, which has risen to a corresponding extent.

THE FRENCH GOLD BILL PARIS, Sept. 28. The Government won the first bout in the Chamber by 365 votes to 248, rejecting a Right Wmg motion to refer the Gold Bill back to the Finance Commission,, which was made a vote of confidence. The Chamber, after receipt of copies of the Gold Bill, adjourned on the demand of the RadicalSocialists, who demanded that M. Auriol appear at a meeting of their parliamentary group to explain the sliding scale of wages, readjustment of civil service salaries, and removal of cuts in war pensions. FRENCH DEVALUATION PLANS PARIS, September 28. Pressure by the Opposition has caused M. Blum to make a significant change in the devaluation plans. The Government proposals provided for compensation to wage earners and State employees and for any rise of interna] prices. The Opposition strongly urged that all the advantages of devaluation would soon be lost if they re-

sulted in increased Government expenditure. Consequently, the compensation proposals were dropped. Cabinet will instead take action, if necessary, by decree. EMBARGO ON GOLD EXPORTS PARIS, Sept. 28. (Received Sept. 29, at 5.5 p.m.) Le Journal states that an official announced that there would be an immediate embargo on gold exports. EFFECT ON LEAGUE FINANCES . / GENEVA, Sept. 28. The Associated Press says that so complicated will the effects of revaluation of currencies be on the League that the Fourth Committee decided to refer the Budget back to the Permanent Commission which supervises expenditure. The Associated Press says:— “ The League’s Pensions Fund, which has converted all its holdings into gold, became solvent overnight as a result of devaluation. The Associated Press learns that it made a profit of 4,000,000 Swiss francs. Now. instead of a deficit of 3,000,000 francs, it has a surplus of 1,000,000. Doubtless other curious repercussions from devaluation will be disclosed in the next few days. LATVIA ABANDONS GOLD RIGA, Sept. 28, Latvia has decided to abandon gold and join the sterling bloc on September 29, SWISS STABILISATION FUND BERNE. Sept. 28 The Government is inaugurating a stabilisation fund from the profits of 650,000,000 francs due to depreciation.

ITALIAN BOURSES CLOSED

. ROME, Sept. 28. The authorities have ordered the Italian bourses to close until Thursday. GREEK CURRENCY ATHENS, Sept. 28. The Government has decided to align the drachma with sterling, instead of the franc. DUTCH STOCK EXCHANGES AMSTERDAM, Sept. 28. Owing to the satisfactory reaction to the monetary measures the stock exchanges are being reopened tomorrow. ACTIVITY IN JOHANNESBURG JOHANNESBURG, Sept. 28. There were animated scenes on the Stock Exchange, and there was heavy buying of gold shares, even non-producers advancing. TURKISH CURRENCY I ISTANBUL, Sept. 28. It is announced that the Government has adopted the English pound as the basis of currency instead of the franc. BRITISH PRESS APPROVAL (British Official Wireless) RUGBY, Sept. 28. (Received Sept. 29, at 5.5 p.m.) Events abroad following the French Government’s decision regarding the franc, showing a wide extension of currency realignment for the revival of international trade, are recorded in the papers with approval, and optimistic conclusions are generally drawn. Latvia to-day decided to link her currency to sterling am press reports suggest that Greece will do likewise. As the result of adjustments made or generally believed t( be in contemplation it is argued that a substantial area embracing most of Europe, nearly all Africa, the whole of North America and of Australia, and considerable parts of Asia will enjoy stable exchange relations and be set free gradually from hampering currency restrictions. ' BRITAIN AND AMERICA WASHINGTON, Sept. 28 (Received Sept. 29, at 5.5 p.m.) It is understood that an arrangement for co-ordinating the British and American stabilisation funds to protect the Anglo-American conditional currency agreement with France is being negotiated. Apparently a soothing effect after Saturday’s flurry is resulting frotn the use of the American stabilisation fund to counteract what then seemed to be a Russian attack on the pound. Mr Morgenthau is believed to have acted independently of Britain and France when he purchased the Russian State Bank’s offering of £1,000,000. Mr Morgenthau said the plan to tie the American, British and French currencies was working as projected. He described the currency arrangement as a gentlemen’s agreement. There was no fixed ratio. Any currencies involved in the operation would be determined from day to day, almost from hour to hour. He emphasised that the American intention to act with others ensures a smooth currency situation. Belgium is expected to enter the pact.