BRITAIN'S POLICY

Poverty Bay Herald, Volume LXIII, Issue 19131, 28 September 1936, Page 5

BRITAIN'S POLICY

EQUILIBRIUM DESIRED INTERNATIONAL FINANCE COMMON AIMS URGED WASHINGTON AND PARIS (Elec. Tel. Copyright—Unjted Tress Assn.) LONDON, Sept.. 26. Following the reports of the French decision to devaluate the franc, a Treasury communique says that His Majesty's Government must, of course, in its policy towards international monetary relations take fully into account the requirements of the internal prosperity of Empire countries as corresponding considerations will be taken into account by the French and American Governments.

"His Majesty's Government welcomes the opportunity to reaffirm the purpose to continue the policy recently pursued, the constant object of which is to maintain the greatest possible equilibrium in the' system of "international 'exchanges and avoid the creation of any disturbance of it by British monetary action, continues the communique.

"His Majesty's Government shares with the French and American Governments the conviction that a continuation of this twofold policv will serve the general purpose which all governments should pursue. The French Government has informed 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 a lasting equilibrium between the various economic systems, it has decided, with this object, to propose to the French Parliament a readjustment of French currency. His Majesty's Government and the United States Government heve welcomed this decision in the hope that it will establish more solid foundations for the stability of international and economic relations. BASIS OF EXCHANGES

"His Majesty's Government and the French and American Governments declare their intention to continue to use their appropriate available resources so as to avoid, as far as possible, any disturbance to the basis of the international exchanges resulting from the proposed readjustment. They will arrange for such consultation for this purpose as may prove necessary villi the other two Governments and' have so authorised the agencies.

"His Majesty's Government and the French and American Governments are also convinced that the success of the policy set forth above is linked with the development of international trade. They particularly attach the greatest importance 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 Iho French and American Governments, desires and invites the cooperation of other nations to realise the policv laid down in the present declaration." They trust that no country will attempt to obtain unreasonable competitive exchange advantage and, thereby, ham•icr the effort to restore more stable and economic relations, which it is the aim of the three Governments to promote. "The currency declaration arises from discussions between the British, French mid American Governments over the last few da vs. It does not involve any change in the British monetary policy. Sterling will remain a free currency, not linked with gold or any other currency. "The declaration is also intended to make clear that His Majesty's Government will not deliberately depreciate the £ sterling by way of reprisal for the monetary measures proposed by France. His Majesty's Government has also undertaken to consult tlie other Governments in order to avoid exchange disturbances arising from the readjustment in value of the franc." LONDON REACTION PLEASURE IN CITY WOOL BUYING PROSPECTS LONDON, Sept. 27. The City is pleased with the devaluation of the franc, particularly as it was reached with an agreement of the world's three most important financial nations, who are trying to hammer out a solution of their present difficulties. The City is discussing whether devalu ation portends heavy or early sales of British securities bought in recent months on Continental accounts. However, it is generally felt that, if the franc were more drastically revalued, for instance to the former parity of 124.21, a :\q repatriation of the franc might be expected but, at present, it is unlikely as the condition of French politics is likely to minimise confidence in the recovery of French trade, which, otherwise, might encourage repatriation. A Commonwealth Bank official told the Australian Associated Press that anything tending to French stability would • improve her wool purchases. Thus increased purchases of Australian wool were possible as a result of devaluation. VOICE AT GENEVA ECONOMIC ENTENTE DESIRE OP FRANCE GENEVA, Sept. 26. In a speech at the League Assembly generally supporting Mr. Anthony Eden, the British Foreign Secretary, and deprecating conflicts between rival systems as distinct from other nations, M. Delbos, the French Foreign Minister, justified the franc, devaluation. He said that Franco wanted an economic as well as political entente because, they were inseparable links in the same chain. M. Delbos'announced that Fiance wished tho bureau of the disarmament conference to bo convoked in favour of control, limitation and reduction of armaments, subject to all nations agreeing. The first essential was a full disclosure of offensive and defensive arms expenditure. -