BRITAIN ASTONISHED

Stratford Evening Post, Volume II, Issue 226, 22 April 1933, Page 6

BRITAIN ASTONISHED

Government and City Circles

NO BASIC REASON FOR ABANDONING GOLD

Press Association. —Copyright

Rugby, April 20.—America's abandonment of the gold standard has astonished both the Government and city circles. It is widely regarded as a tactical manoeuvre by President Roosevelt on the eve of Mr. Ramsay MacDonald's arrival, especially as America, with masses of gold and vast natural resources, has no basic reason for abandoning gold. Financiers re\ surprised by America's blow at Britain' last bargaining point. As soon as Air. Ramsay Mr.cDonald, on board the Eerengaria, lennv! hat the United States was the gold standard he consulted Sir Frederick Leigh Ross, the chief economic expert of the British Government. Mr. MacDonald refused to comment, but it is understood the British mission felt that the situation with respect to the MacDonald-Roosevelt conversations has been considerably altered. The Evening Standard's financial writer says thai the significance of t'ii American decision on the eve of Mr. MacDonald's arrival cannot be exaggerated. Britain, with her depreciated currency and exchange equalisation 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, and not in-

flation 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 o;-> sterling improved at the close to 3 dollars 85 cents. Other markets were at first considerably affected by the American developments, although British funds changed little, with War Loan 31 per cent, unaltered at 1021-16. Little selling occurred in the Kaffir market, which finished firm, as did also internationals generally. After the close the latter showed renewed : rngth in the "street" market, nickc;- : 'mpin<» from 15 r ] to 171 and Brazil from 10? to 11 1-16. A Paris message "twtcs thn.t apprehension prevails in u.■■■.'■ ':\l circles regarding the Anglo-/ an money war, in which it is felt i both are using the weapons of ourivjoy inflation, leaving France ; t *hr vy of the depreciated It is considered that ,'. •; .'"'s decision will make ihi irv~mntional confusion worse. A Berlin cable sta J := that financiers associated with the Reichsbank consider that the fluctuations in the dollar cannot touch the dollar exchange in the long run. America is the world's greatest creditor and, therefore, the continuous demand for dollars will maintain the dollar quotation near parity. America's action is necessary to prevent irregular withdrawals of go'd. and it is unlikely to affect German currency, which the st' i' J of i. . eign currency adequately protect, hut lasting depreciation of the dollar T "•••..'•'] decrease German exports . and posiiblj necessitate .. moratorium. I A Hague message states that Holland j is unlikely to abandon the gold standard.