THE GOLD BLOG.

Pahiatua Herald, Volume XLIV, Issue 13372, 28 September 1936, Page 5

THE GOLD BLOG.

United Press Assn. —By Elec

PARIS, September 26. The necessary legislation for the readjustment of the franc to the pound and dollar will be submitted to an emergency session of Parliament on September 28, . also a measure to compensate French nationals suffering heavy loss. The Bank of France is meanwhile taking steps to avert speculative manoeuvres. M. Aurioi stated that the Government was do'ng its utmost to prevent an unwarranted rise of prices. He adaed that negotiations with Britain _ and America had been proceeding since June, the objective being to end the economic war and create an alignment avoiding monetary and financial difficulties.

A stabilisation fund of £130,000,000 will maintain the stability of the new franc the gold content of which will be fixed at 49.43 milligrammes of gold of .900 fineness. The basis of the currency agreement between England, France and America ?.s believed to be lielding the franc at 105 to the pound and the dollar at 4.86 to the pound. It is understood there will be no direct embargo on gold exports but the minimum number of francs that can be exchanged against gold will be fixed so high as to make the business practically impossible. The requisitioning of all gold will under the new price give the Governmtnt a profit estimated at between £175,000,000 and £230,000,000, more than compensating for the failure of the baby bonds. The Government’s stiff est obstacle will be the Senate where it is expected devaluation will be attacked for reducing the purchasing power of fiped incomes and injuring French investors who lost 80 per cent, of their money in the 1928 devaluation .

Devaluation speedily aroused a controversy. M. Revna ud. former Minister of Finance, recalls that he urged the step in 1934 since when France lias lost thirty billion francs in gold and the condition of her people has become worse. “This is our last chance. Don't let us muddle it.”

On the contrary, the former Ministers. M. Marin, M. Mendel and ■M. Bonnet condemn the decision, M. Man del declaring that devaluation is a downright swindle. ECON OMIC ENTE NTE "VTA NTE D. GENEVA, September 26. In a speech at the League Assembly generally supporting Mr Eden and deprecating conflicts betw 'cn rival systems as distinct from nations, M. Delbos, French Foreign Minister, justified the franc devaluation. He said France wanted an economic as well as a political entente' because they were inseparable links in the same chain. M. Delbos announced that France wished the bureau ot the Disarmament Conference convoked and favoured the control, limitation and reduction of armaments subject to all nations agreeing. The first essential was a full disclosure of offensive and defensive arms expenditure. S\Y ITZE RL AX D FOI, IA) WS FRANCE. BERNE, September 26. The Government, after a long coiiferen.ee, announced its decision to devalue the Swiss franc. It is submitting proposals to the Chamber on Monday and closing the Stock Exchanges on -Monday and Tuesday. IN HOLLAND AND BELGIUM. THE HAGUE, t September 27. The Dutch Government announces that it is maintaining the monetary policy unaltered. The Premier, M. Colijn, says Swiss devaluation is not altering Holland’s determination to maintain the gold standard of the guilder. BRUSSELS, September 26. The Belgian Government is adhering to the Anglo-Fremh agreement and is not devaluating the belga. HOLLAND OFF! AMSTERDAM, Sept. 27. It is officially announced that the maintenance of the gold standard is no longer possible by Holland owing to the French and Swiss action. This sudden change of policy created general surprise. The Bourse will be closed on Monday and Tuesday. The? Dutch Government Bank of the Netherlands de-

COLLAPSES IN EUROPE-

FRANCE DEVALUES FRANC.

;tric Telegraph—Copyright.

cided to place an embargo on the export of gold from to-day. POLAND “STAYS PUT.” WARSAW, September 27. Poland is not following the devaluation measures of France and Switzerland. ITALY WILL PARTICIPATE. ROME, September 27. Cabinet will meet on Tuesday to discuss the financial policy of Italy and will xrarticipate in the stabilisation agreement if invited. FRANCE’S HEAVY GOLD LOSSES. £400,000,000~~1N A YEAR. LONDON, September 25. The Daily Mail’s Paris correspondent says that it is estimated that France lost over £11,000,000 in gold exports during the past week. A year ago the Bank of I ranee held £1,100,000,000 worth of gold, and to-day the gold holding is about £700.000,000. BRITAIN ANNOUNCES POLICY. LONDON, September 26. The Treasury issued the following statement at 12.30 a.m. : ■‘His Majesty’s Government, after consultation with the French and American Governments, will join them in affirming a common desire to foster those conditions which will safeguard peace and best contribute to the restoration of order in international economic relations, and pursue a policy tending to promote world prosperity and improve the standard of living. “His Majesty’s Government must, of course, in its policy towards international monetary relations take i uJIy into account the requirements of the internal prosperity of Empire countries, as corresponding considerations will bo taken into account by the' French and American Governments. They welcome the opportunity to reaffirm their purpose to contin le the policy thev ha ve recently pursued, the constant object of which is to maintain the greatest possible equilibrium in the system of international exchange and avoid the creation of any disturbance there by British monetary action.

“His Majesty’s Government shares with the French and American Governments the conviction that continuation of this two-fold policy will serve the general purpose which all the Governments should pursue. “The French Government informs His Majesty’s Government that, judging that the desired stability of the principal currencies cannot be ensured on a solid basis except after the re-establishment of lasting equilibrium between the various economic systems, it was decided with this object to propose to its Parliament readjustment of the French currency. His Majestv’s Government and the United States Government have welcomed this decision, in the hope that it will establish more solid foundations for stability in international economic relations. “His Majesty’s Government and the French and American Governments declare their intention to continue to use appropriate available resources so as to avoid as fains possible any disturbance of the international exchanges resulting Iroin the proposed readjustment. They will arrange for such consultation for this purpose as mav prove necessary with the other two Governments and with authorised

His Majesty s Government and the l-'reneh and American Governments are also convinced that the success of the policy set forth above is linked with the development ot international trade. They particularly attach the greatest imp to action being taken without delay to relax progressively the present system of quotas and exchange controls with a view to their abolition.

“His Majesty’s Government* in Common with the French ami American Govornmonts, desires and invites the co-operation of other nations to realise .the poliev laid down in the present declaration. !t trusts that no country will attempt to obtain an unreasonable oompetitive exchange advantage and thereby hamper the effort to restore more stable economic relations, which it. is the aim of the three Governments to promote.”