THE BANK RATE

Southland Times, Issue 20897, 5 October 1929, Page 7

THE BANK RATE

INCREASE INEVITABLE EFFECT ON THE EXCHANGE MARKET TURN IN BRITAIN’S FAVOUR (United Press Assn.—By Telegraph—Copyright.) (Rec. 7.0 p.m.) London, October 3. The outstanding feature of the Labour Conference at Brighton was the speech by the Chancellor of the Exchequer, Mr Snowden, in detailing the effects of the bank rate upon the labour market. He boldly proclaimed that it was no use railing at the Bank of England. The rise in the bank rate was the only means in the existing conditions to restore unfavourable exchanges. A corrective to the drain on British gold had been delayed as long as possible. A time of the greatest strain on Britain’s exchanges was approaching, when it would be necessary to pay for food, cotton and other raw materials. If the payments were met with the sterling at a discount, the cost of the raw materials would be considerably increased. The rise in the bank rate turned the American exchange in Britain’s favour with the same result in every country in Europe, except France, and-even there a movement in Britain’s favour had begun. The effect of the rise on British funds was negligible. It was also folly to attribute the growth of unemployment and the decline of exports to a single cause. Referring to the Hatry case, the Chancellor said he must await the facts before deciding on the necessity for amendments to the Company Law. He said: “I hope the committee will be able.to throw light on our darkness.”

The effect of Mr Snowden’s speech was a Scottish motion in favour of bringing currency and banking finance under national control. This was withdrawn. —Australian Press Association.