THE POUND STERLING

Waipa Post, Volume 32, Issue 1780, 8 July 1926, Page 7

THE POUND STERLING

The latest quotation for sterling exchange on New York is 4.8 11-16 dollars to the £l, which is only a shade helow parity. During the strike, early in May, the quotation dropped to about 4.48 dollars, and when the strike terminated there was a sharp rebound. On 15t'li May sterling reached par in New York for the ifirst time in eleven years. The event was of such singular importance that many of the financial and other papers in New York made very favourable comments. The New York World pointed out that following the American Civil War the d/ollar was not restored to a parity with go-Id until 1879, or fourteen years after the war had ended, and the restoration was not accomplished without a severe struggle. While (France, Italy, Belgium, and Germany were enjoying apparent prosperity under a regime of paper inflation, Britain clung to the hard but straight road of financial sanity. ißritish manufacturers dreaded the prolonged period, of falling prices, and even some economists were convinced that the gold standard had become obsolete, and advocated a controlled currency in its place. The British system to tax rather than to borrow, and the policy of pay-as-you-go, have won the day'. The American war debt was funded, and the interest and amortisation charges have been handled so skilfully by the Bank of England that their payments in June and December never ruffled the exchanges. Last year the whole of the amount due to America was in hand at New York before 2Sth April, when the 'Chancellor of the Exchequer announced the restoration of the gold standard. Germany was compelled to adopt the gold standard, within her territory under the Dawes plan, and the deflation that followed produced the usual effect, a shortage of loanable credit and unemployment. France, after flooding the country with paper money, is now forced to take the most drastic steps to K restore the franc, and in Italy the steps to he taken to restore the lire involve very serious interference with the liberties of the people. The erection of buildings except dwellings is to be prohibited for twelve months; which will throw a large number of men out of work; also it is intended to limit the number of pages of d.aily papers to six, and the working day is to be increased immeiately. France and Italy and Belgium also will be under 'financial discipline, and the purchasing power of the people will be greatly curtailed. It is probable that the wool markets cf Australia and New Zealand will feel the effects.