TACTICAL MOVE

Southland Times, Issue 21997, 22 April 1933, Page 5

TACTICAL MOVE

AMERICAN PRESIDENT NO BASIC REASON FOR DECISION LONDON COMMENT (United Press Assn. —Telegraph Copyright.) London, April 20. America’s abandonment of the gold standard astonished both the Government and city councils. It is widely regarded as a tactical manoeuvre by Mr Roosevelt on the eve of Mr MacDonald’s arrival, especially as America, with masses of gold and vast natural resources, has no basic reason for abandoning gold. . , Financiers were surprised by America s blow at Britain’s last international bargaining point. A message from the Berengaria says that as soon as Mr MacDonald learned that the United States was off the gold standard he consulted Sir Frederick Leith Ross, chief economic expert to the British Government. Mr MacDonald refused to comment. It is understood, however, that the British mission felt that the situation with respect to the MacDonald-Roose-velt conversations had been considerably altered. The financial writer of the Evening Standard says the significance of the American decision on the eve of Mr MacDonald’s arrival cannot be exaggerated. Britain, with a depreciated currency and an exchange equalization fund, is regarded by the United States as the “villain of the piece.” The Daily Herald says that America’s move demands international action to provide for world inflation —not inflation by one or two countries —and thus increase the purchasing power of the whole world. . After a somewhat erratic day in the London foreign exchange market the dollar rate on sterling improved at the close' to 3.85 dollars. Other markets were at first considerably affected by the American development, although British funds changed little, with the war loan 3J per cent, unaltered at £lO2 1/3. Little selling occurred in the Kaffir market, which finished firm as did also internationals generally. After, the close the latter showed renewed strength in the street market, nickels jumping from £l5 15/6 to £l7 10/and Brazil tractions from £lO 15/- to £ll 1/3. DOLLAR FLUCTUATIONS INCREASED INSTABILITY. (United Press Assn.—Telegraph Copyright.) (Rec. 7.30 p.m.) London, April 21. The Times in a leading article states: “Fluctuations of the paper dollar will greatly increase the instability of an unstable world. The flight from the dollar is comparable with the flight from the franc, and might produce a race in currency depreciation the end of which is difficult to foresee. On the contrary, if it is wisely handled departure from gold by a country recently the most prosperous in the world may eventually facilitate the restoration of a single international monetary standard.”