EFFECT ON BRITAIN

Poverty Bay Herald, Volume LX, Issue 18252, 22 November 1933, Page 7

EFFECT ON BRITAIN

DOLLAR DEPRECIATION % COMPETITION IN TRADE GAIN TO AMERICA (Elec. Tel. Copyright—United Press Assn.) (Received Nov. 22, noon.) LONDON, Nov. 21. Though the dollar has quietened, the fluctuations are still much wider than usual and people are beginning to discuss the effect on. British trade. The dollar exchange rate is quoted today at 5364 cents to the pound, while tho price of gold declined still further to £6 7s an ounce.

The Daily Express’ City editor says: “Our trade will bo greatly affected unless the pound is lowered to the level of the dollar, or tho dollar raised to the level of the pound. America competes with Britain mostly in Canada, South America, Australia, New Zealand, Japan and China. The exports principally affected are machinery, motor cars, iron and steel, chemicals, and cotton manufactures.

“While the fall of tho dollar permits Britain to purchase at lower prices cotton, tobacco, fruits, petroleum, and lard which last year cost £35,000,000, it will increase America’s competitive power against £186,000,000 worth of exports with which wo compete with the United States. Trade pacts with the Argentine and other countries may be of little avail if the dollar continues to depreciate and the pound is left at a high level, but the effects of the pacts ate not yet seen to any extent.” The Financial News says: “Tho extent to which British industry may be penalised by the depreciation of the dollar in tho near future should be mild, but the extent of the benefit to American industry must be great. Besides the benefit from Britain’s loss, substantial inroads must be made into the trade of Germany, France, Belgium, Czechoslovakia, and other hitherto cheap costcountries, which previously were able to compete largely with America.” U.S. GOLD BUYING PRICE AGAIN RAISED CRITICISM IGNORED WASHINGTON, Nov. 20. The gold price was raised to 33.66 dollars an ounce to-day, and it was announced that tho Government’s domestic purchases to dato totalled £1,500,000. Tho extent of tho purchases abroad was not revealed. While some quarters interpreted tho rise as indicating that the President is seeking a still lower level for tho value of the dollar, in other quarters it is pointed out that it is probably only a step for bringing tho American price in conformity with tho world price. . That the move lends itself to interpretation as a. further sign of Mr. Roosevelt’s defiance of the critics of the United States Chamber of Commerce cannot be denied. The Association of the Reserve and City Bankers, representing half the country’s banking resources, to-day joined the chamber in protesting against tho Government’s experiments in finance. At tho same time it is being asked here whether the increase in the price of gold, for all its aspects of defiance, may not be a preliminary to a “tapering off” of the gold buying policy, in face of the widespread protest. Tho dollar dropped to 61.02 cents against the franc to-day. Sterling closed at 5301, cents. Stocks moved forward one to four points with industrials being lavored. Commodities are also strong, wheat gaining two cents, while cotton, rubber, and silver moved higher.