STABILISATION TALKS.

Star (Christchurch), Volume LXVI, Issue 20222, 5 February 1934, Page 1

STABILISATION TALKS.

United States to Approach Britain. United Press Assn.—By Electrto Telegraph—Copyright. NEW YORK, February 3. The Washington correspondent of the “New York Times” says that the early opening of the stabilisation discussions with Great Britain was authoritatively indicated to-day. Official conversations are expected to begin as soon as the first effects of the dollar devaluation have been assessed. The Administration is reported to be desiring, for test purposes, a ratio of about five to one between the pound and the dollar, with a further adjustment to be made after the effect on the internal economic conditions of both countries have been studied. Administration experts have carefully watched developments in France, as, admittedly, a continuous and heavy flow of gold capital to America would embarrass the French Government’s determination to remain on the gold standard. In financial circles the opinion is held that France will not be forced off the gold standard, and that within a reasonably short time the dollar should attain parity with the franc. Further Devaluation. The strength of the dollar on foreign markets since Mr Roosevelt’s devaluation has been causing some concern in official circles. It is understood that the President is determined to push it down to the parity at which he fixed it. Some quarters said they believed that another devaluation would be necessary which would make the de facto parity of the pound to dollars about 6.08 to one. EFFECT OF GOLD SEIZURES. WASHINGTON, February 3. The record deficit for this year of some 1,900,000,000 dollars of last week, was changed into a surplus of almost 1,000,000,000 dollars to-day as publication of the Treasury balance took into account the profit accruing from the gold seizure. It is actually merely a book transaction, as most of the profit has been allocated to the Stabilisation Fund. The actual deficit remains and is sure to be increased in the months to come.