WALL STREET APPLAUDS

Taranaki Daily News, 22 September 1931, Page 9

WALL STREET APPLAUDS

EFFECT OF BRITISH MOVE CONFERENCE OF BANKERS DISTURBED MARKET LIKELY DEBT QUESTION RE-OPENED By Telegraph—Press Assn.—Copyright. Rec. 0.5 p.m. New York, Sept. 20. Part suspension of gold payments by tho Bank of England is applauded in high Wall Street banking circles as a constructive measure dictated by the emergency situation. On receiving word of the British financial crisis Wall iStreet bankers hurriedly broke their leisured week-end to return to the city to hold conferences to determine how to protect American markets. Bankers asserted that although the British difficulties were serious they would probably not involve America to the extent the German crisis did, since American investments in Britain are not particularly large. It is believed, however, the principal effect of the British crisis here will be through its effect upon world-wide securities and commodities rather than through Ame--rican loans to Britain. American bankers are considerably worried concerning further recessions in the commodity price level. Disturbances on tho American markets are expected 'but it is. generally felt that American stocks'have already undergone much deflation, and last week’s severe declines to some degree at least discounted tho British news. EFFECT ON WORLD AFFAIRS Washington officials refused to comment on the British situation,- though they said it was on the whole more expected than surprising. Some circles suggested a question as to Britain s ability to maintain the gold basis on foreign obligations and to handle domestic affairs on the suspended basis. The crisis had also reopened the question of debt agreements and Britain’s capacity to pay. It was also felt that if American aid proved necessary such will have to come largely from private bankers, but on the whole Government circles indicated the belief that the British move will have an eventual salutary effect on world affairs. Montreal Stock Exchange members decided to await the public reaction to the British developments before deciding on the advisability of closing the exchange. Sir Charles Gordon, of the Bank of Montreal, stated: —“I do not anticipate any drastic consequences as far as Canada is concerned.” Mr. T. B. MeCaulay, president of the Sun Life Insurance Company, stated;— “I am convinced it will prove a highly desirable move in the first step towards better times in Britain. The immediate effect will be a disturbance, but the long-distance effect will be good.” ' Sir Herbert Holt, of the Royal Bank of Canada, stated that Britain could not proceed in any other way than by relinquishing the gold standard, and should now concentrate on balancing her Budget. Dr. Eugene Aggar, a noted economist, takes the view that the situation is full of serious complications. Tho American dollar might gain as an international monetary unit but this would be an empty victory because of tho world trade dislocation caused by the unstable sterling. Mr. Carl Snyder, statistician to the Federal Reserve Bank, New York, declared that the whole economic depression was due to the fact that the gold was concentrated in a few countries.

CANADA MAINTAINS STANDARD STATEMENT BY PRIME MINISTER Rec. 7 p.m. Ottawa, Sept, 20. The Prime Minister, Mr. R. B. Bennett, with reference to the news from London regarding the suspension of the Gold Redemption Act, said the Canadian Government proposed to maintain the gold standard. REAL CONSEQUENCES OF WAR. FRANCE POINTS NEED FOR PEACE Rec. 10.30 p.m. Paris, Sept. 21. M. Flandin, Minister of Finance, interviewed to-day said the essential feature of the panic-stricken world was the uncertainty spread abroad about the London market. After explaining that France intervened because an attack on the sterling would mean universal disaster he said it was now that they were seeing the real consequences of the war, which devoured an enormous amount of capital patiently built up by previous generations. The realisation of that fact could not fail to fortify the desire for peace and tranquillity. A Berlin message says the Bourse will close to-morrow. Herr Dreyse, vice-president of the Reichsbank, commenting on Britain’s decision, says Germany should not indulge in satisfaction that a crisis had been reached in Britain. “I hope the work of international understanding will be undertaken without delay,’’ he added. A decree issued yesterday places all German banks under Government control and authorises a £12,500,000 taxfree loan for the use of productive relief work.