TACTICAL MANOEUVRE

Waikato Times, Volume 113, Issue 18926, 21 April 1933, Page 5

TACTICAL MANOEUVRE

ASTONISHMENT IN BRITAIN BLOW AT BARGAINING POINT. THE FRANC AND THE DOLLAR. United Press Assn. —Elec. Tel. Copyright. (Received April 21, 10.45 a.m.) LONDON, April 20. America’s abandonment of the gold standard astonished both the Government and city circles. It is widely regarded as a tactical manoeuvre by Mr Roosevelt on the eve of Mr Ramsay MacDonald’s arrival, especially as America, with masses c-f gold and vast natural resources, has no basic reason for abandoning gold. Financiers are surprised by America's blow at Britain’s last international bargaining point. PARIS, April 20. Apprehension prevails in financial circles regarding the Anglo-American money war, in whiQh it is felt both are using the weapons c ! f currenoy inflation, leaving France at the mercy of the depreciated dollar and sterling. . It is considered that Mr Roosevelt’s decision will make international confusion worse. LONDON STOCK MARKET. AN ERRATIC DAY. BRITISH STOCK LITTLE AFFECTED(OfficiaI Wireless.) (Received April 21, 12.30 p.m.) RUGBY, April 20. After a somewhat erratic day in the London foreign exchange market the dollar rate on sterling improved at the close to 3 dollars 85 cents. Other markets were at first .considerably affected by the . American development, although British funds changed little with war lean 3J per cent, unaltered at £lO2 Is 3d.

Littlp selling occurred in the kaffir market, which finalised -firmly as did also internationals generally. After the close the latter showed renewed strength in the street market nickels jumped from £ls 15s to £l7 10s and Brazil tractions from £TO 15s to £ll Is 3d. OPINION IN BRITAIN. BANKING CIRCLES SHOCKED. MOVE GENERALLY CONDEMNED. CURRENCY WANTONLY WRECKED United Press Assn. —Elec. Tel. Copyright. LONDON, April 20. The Financial News says the news of developments in the currency policy of the United States arrived too late to produce its full effects on the markets. It came as a great shock to banking circles where it had been hoped that America would .not deliberately wreck her currency. The move is. generally condemned as an act calculated to aggravate the crisis and throw the world back into chaos at a moment when it was hoped through the World Economic Conference that stability was in sight. Britain went off the gold standard having spent every penny of her gold reserve to enable her to secure further credits. America has gone off while she is s-till in possession of gold with which she could have easily maintained the stability of her currency. She was not driven by necessity, but has taken the step in cold blood.

Mesages from Washington to the effect that the Administration will not support the dollar abroad by means of shipments of gold created considerable excitement this evening in foreign exchange circles in London. The sterling dollar rate fluctuated freely and at one time touched 3.62. It ’finished at 3.61 i, compared witli 3.49 on Tuesday.

REGAINING LOST MARKET.

MR. ROOSEVELT’S MOTIVE

POWERFUL BARGAINING LEVER

United Press Assn.—Elec. Tel. Copyright. LONDON, April 20.

The dropping of the igold standard is viewed in informed circles as a prelude to extraordinary measures to regain America’s lost foreign markets, effect debt readjustment, and raise commodity prices, which, it' accomplished, will he inevitably at least al the partial expense of the so-called depreciated currency countries. Mr. Roosevelt formerly was opposed to "tinkering" with the currency, but in the opinion of his friends, the results of the domestic relief legislation, farm relief and public works have been disappointing. The deflation which lias taken place In the last month and the frozen assets in the closed banks, totalling six to eight billion dollars, have produced a condition in which, with the competition of foreign countries off the gold standard, it appears necesary to meet the situation with a modified currency. It is believed that a powerful bargaining material exists for conferences with Britain and other countries, but the immediate anxiety is to stop the ruinous domestic deflation. A message from San Francisco stales that fruit export circles there were elated as the pound sterling rose and, by the same token, tho ability of British buyers lo purchase California’s dried, canned and fresh orchard products. The United Kingdom is California’s best foreign customer, but California of late has found Australian competition in the British markets a restricting factor. The rise of the pound has tended to cut down the advantage which Australia gained when Britain dropped the gold standard.