CURRENCY

Wairarapa Daily Times, 1 July 1933, Page 5

CURRENCY

GOLD COUNTRIES AGREE A FRENCH DECLARATION. J>ress Association Electric Telegranh—Copyright ■ LONDON, Friday. The French Finance Minister, M. Bonnet, interviewed by tlie “News-Chron-icle,” said: —“There is complete unanimity among the gold countries regarding" stabilisation, and a determination to defend their currencies. We a-re preparing to make a categorical declaration to that effect. ’ ’ Asked whether Britain would be associated with the -declaration, lie replied: “That’s another matter. We are old enough to walk by ourselves. The position is tlie declaration will be made. Britain and America may join- us if they wish. ’ ’ CONFERENCE CRISIS. LONDON, Friday. The World Economic Conference crisis regarding currency stabilisation continues. The latest development is a ‘hurriedly-convened meeting this evening between Mr J. Ram sat MacDonald, Mr Neville Chamberlain-, and the British expert advisers, with tlie delegates of five European gold countries who have been conferring throughout the day. It -seems that the United States is not yet prepared to discuss stabilisation, but may be interested in an international exchange device which will prevent wide .speculative fluctuations in currencies without hindering President Roosevelt’s inflationary powers. It is understood this is the gist of Professor Moley’s conversations with Mr MacDonald. The monetary situation dominated the conference throughout the day, the dollar jumping wildly on the foreign exchange market to 4.41$ in the morning, from 4.25, and falling again to 4.30, closing at 4.295. Gold countries, fearing that the pound would follow the dollar, made a dead set on Great Britain, with a view to securing an open pledged alliance f otr the maintenance of the gold standard, and strongly urged the linking of the pound to the franc. It is no secret that the ißank of England and the Government ’.s equalisation fund are giving considerable support to the French franc, and through it to the lesser, gold countries. Continental delegates, therefore, are unable to understand why the British Government does mot officially endorse this attitude by adeclaration in favour of the maintenance of such currencies as remain stable. Such critics have failed to perceive the difference between coping with a particular situation at a particular moment, and linking sterling with the franc or committing Britain in regard to future stabilisation. The Government remains inflexible in its determination to resist any course likely to lead to the formation of a European bloc. It is supported in this ■attitude by Dominion circles, where fears are expressed regarding the consequences of President Roosevelt’s inflationary policy. It is conceivable that the substantial rise in price levels in America which President Roosevelt expects may force lower price levels upon the rest of the world, with the resultant complications shaking m-onetarv systems and eventually jeopardising the franc, with grave consequences itp Britain if she meantime is lured into linking the franc with sterling. In these circumstances, the measure of British resistance is possibly the measure of French apprehension for the It is reliably stated that Professor Moley, Dr. Sprakue and Mr Warburg, financial adviser, have been in consultation concerning the method by which the fluctuations might temporarily be held between certain defined narrow margins. One plan would involve action by the Central Banks to prevent speculation.

The “Daily Express” says American circles believe -stabilisation will occur during the week-end.