CREDIT IMPENDED

Wanganui Chronicle, Volume 74, Issue 180, 1 August 1931, Page 7

CREDIT IMPENDED

FINANCES OF BRITAIN ; SOUNDNESS OF POSITION STATEMENT IN COMMONS [British Official Wireless, j KL’GBY, July 30. The budgetary position was the sub•ject of an important statement in the House of Commons by Air Philip Snowden during the debate on the second reading ot toe Consolidated Fund Ap propriatiou Bill. Mr Neville Chamberlain, referring to the financial position, said that his most important criticism of the Budget was the relation between the Exchequer and the unemployment fund. The Chancellor had postponed the inevitable recKoning. ihere was, however, no foundation for want oi confidence in British stability. Mr Snowden aid: ••This is a time when a hgutly spoxeu word or even a wrongiy turned sentence might have most serious consequences, lhe position of Britain in this respect is peculiarly sensitive because we are the great money market of the world and it is essential that confidence throughout the world should be maintained in the stability of the London money market. 0 Foreign credits were held in London to the extent of probably hundreds ot millions sterling. He was exceedingly grateful to Air Chamberlain for tne testimony he had given to the fundamental soundness of the financial posi tion of London and the country generally. Borrowing For Unemployment. Referring to Air Chamberlain's criticism of the Budget, Air Snowden said | that although it Mould be a sounder [ course if we could maintain the uuem- ; ployed from current revenue, he could j not accept the contention that borrowing wv- analogous to creating a burden comparable to the war debt. Borrowing was the alternative to an increase in taxation, before which they must hesitate, ihe depression had deepened i since the Budget was presented and a supplementary expenditure o* nearly i £d,UVO,OOO had oecn authorised. Fn ad- ■ dition, as the result of the acceptance (ft Mr Hoover’s proposal, there Mas a j further burden oa the Budget of nearly I £II.UOU,UW. That was a very serious I position, but he believed it was a fact | that, perhaps with the exception of one ; tory than any other in the world. : 'lucre Ma-s an impression abroad that! the budgetary position ot Britain was ; hopelessly bankrupt. “Nothing could! be further from the truth.” declared I Mr Snowden, amid general cheers. He ! admitted that he had prepared a scheme for a huge conversion war loan by ! which very large saving- in interest I would be effected, and which, but for j tberecent finan -ial developments, would : have been floated before now. THE BANK RATE INCREASED TO 4j PER CENT. LUN DON, July 30. Th.? Bank rate has been raised to 4 J per cent.

DEARER MONEY. OVERDRAFTS HIGHER. LONDON, July 30. Overdraft', which have long been stationary at 5 per cent., have been increased by a halt pc- cent, as the result of the rise in the Bank rate, which has also depressed gilt edged securities. It is understood that France has iot granted an actual £20,000,0UU loan or credits to Britain, but has agreed to a private arrangement whereby a consortium of leading Fench banks has agreed to provide £2O,WI.O'MJ for purchasing sterling bills*, rediscountable at th. Bank of France. Thus France has agreed to make no further inroads on sterling, which has already strained its resources to the utmost.

BRITISH FUNDS FALL. RESULT OF THE INCREASE. Received July 31. 8.20 p.m. LONDON, July 30. Though the increase in the bank rate was expected, th-- announcement caused t drop in London in British funds oi ■me to two points, which must notes sarily po-tpom? for a long time Mr Snowd. • N (.inversion plans. Indian and Australian stocks were practically unaffected. The Evening Standard’s city edito. says: “Though the increase was neces sary to prevent fund; going abroad, toe new rate u ill injure industry and commerce, which will have to pay at least 51 per cent, for bank loan.-. As th.’ banks will nor give the industry the full benefit of the (heap mr-ney, they should nor pars on the increased rates immediately. to 2 per cent, on May 14 the London bank rate un« increased to 3J per cent, on July 23 aa result of the financial en<’s created by the reactions from the situation in Germany. The further increase to -11 per < .-nt-, an advance after nr. interval of only a week, is an extraordinary occurrence. There is certainly no parallel to this - ■ ' ■ ’ were ma le in th- Cist week of ihe out- ] ' .By ■ ” ii the London bank rate has be- n restored to the level at wuirh it stood from February 6 to Ma.'.h 6 last J<ir

FRENCH GOLD HOARD. HIGH NG i n BACKING. Received Juiv 31. 9.10 p.m. PARIS, July 31. Simultaneously with the increase in the bank rate in Fing and. the Bank of France announced that its gn’d holding had increased £10.900,000 £436.2->d. XiO, representing 56 i per cent, of the note issue.

EUROPE’S DIFFICULTIES THE BRITISH ATTITUDE. I British Official Wireless. J RUGBY, July 29. jn the House of Commons, in an-1 swer to a question, Dr Hugh Dalton

z Under-Secretary for Foreign Affairs) stated that it was the aim of the British Government to take the widest possible measures of international corporation in the solution of the financial and economic difficulties of Europe. Replying to Air Stanley Baldwin, the Chancellor of the Exchequer (Mr Philip (Snowden| said he did not think he could usefully make any statement on the international financial situation.

SILVER AS MONEY

IMPORTANT CONFERENCE. A MOVE BY CANADA. LONDON, July 30. : The Sun-Herald is able to announce ! that the Canadian Prime Alinister is exi pccted shortly to call a conference to , re establish silver as a monetary unit as' a means of mitigating the world depres- ; sion. It is learnt that the proposal has been intensively discussed in London. I Paris, and New York, where it is considered that the initiative would best I comp from a Dominion where bimetallism has not been a lix e political issue.