FALL OF FRENCH FRANC

Timaru Herald, Volume CXLIII, Issue 20783, 19 July 1937, Page 7

FALL OF FRENCH FRANC

STOCK EXCHANGES NERVOUS OUTLOOK IN COMMODITY MARKETS United Press Association—By Electric Telegraph—Copyright (Received July 18, 6.30 p.m.) LONDON, July 17. Before a steady flood of selling orders from Paris, the franc slumped to the lowest level since 1926. “Panic” rates are quoted for forward franca, at three months’ discount, reaching over six francs. Banking and commercial interests in London and Paris are bewildered. Political Uncertainty Some are critical of the failure of the authorities to intervene. Uncertainty is increased by rumours of dissension in the French Cabinet. Some have declared that M. Bonnet (Minister of Finance) is resigning, and the belief is growing that the Popular Front Government is breaking up. Speculators are talking down the franc to 140. The vote of the Socialist Congress at Marseilles, approving of M. Blum’s measures and demanding that the Prime Minister, M. Chautemps, carry out the Labour Federation’s programme of control of credit and the nationalisation of transport, insurance and other industries, has unsettled the Bourse. The Labour unrest in Paris is another factor. Well-informed circles believe that the Socialists will endeavour to bring back M. Blum with an intensive programme of social reform expenditure Until these political uncertainties are cleared up, the future of the franc v. 'll remain obscure. Cheerful Tone In England Despite international and French uncertainties, the Stock Exchange broke up in a more cheerful mood, though prices scarcely reflect the more optimistic feeling. The trade returns are considered most encouraging. Wool and Butler Outlook Messrs W. H. Dawson and Sons, Limited, commenting on the wool sales, say the barometer seems to be set at fair, and the pessimistic clouds are dispersing. A welcome increase in the volume of business in Yorkshire was recorded in the past week. If the present rate of consumption is maintained, there need be no serious anxiety in regard to the prices. Stocks in consuming centres are low, and most European countries are hungry for raw material, which France is enabled to buy freely and advantageously owing to the liberations of the franc. Some change in fashion appears imminent, and this may favour finer grades, especially worsteds. “The Financial News” considers a brisk demand is likely to be felt in September. Major rises in the next twelve months, however, cannot be expected, as it is difficult to increase prices for tops and yams to the same extent as raw material values, but the maintenance of the existing level should bring in record wool cheques to the principal exporters. The strong advance in butter was quite unexpected. Speculation was largely responsible for it. Tooley Street merchants expect a fairly high level of values to rule in the near future. There have been small arrivals of Siberian. Unsteadiness In Fruit The fruit market is inclined to less steadiness, owing to large arrivals of peaches and plums from Italy. There are good supplies of home-grown fruit. Prices, however, are still satisfactory, especially as the season is drawing to a close.