TACTICAL MANOEUVRE

Waikato Times, Volume 113, Issue 18927, 22 April 1933, Page 5

TACTICAL MANOEUVRE

ASTONISHMENT IN BRITAIN BLOW AT BARGAINING POINT. THE FRANC AND THE DOLLAR. United Press Assn. —Elec. Tel. Copyright. 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 i)y Mr Roosevelt on the eve of Mr Ramsay MacDonald’s arrival, especially as America, with, masses of 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 which it is felt both are using the weapons cf currency 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 LIT.TLE AFFECTED. (Official Wireless.) 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 loan 3J par cent, unaltered at £lO2 Is 3d. Little 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 -£U 10s and Brazil traotions from £lO 15s to £ll Is 3d.

PARLEY PLANS UPSET. new stage setting. EFFECT OF THE MOVEMENT. BENEFICIAL RATHER THAN EVIL. United Press Assn. —Elec. Tel. Copyright. NEW YORK, April 20. On the eve of the arrival In the United’ States of the British Prime Minister, Mr. Mao Donald, the question may be frankly asked to what extent the stage has been sent for him and for M. Herrlot (Franco) since the official abandonment by the United States of the gold standard and the intended adoption of “controlled inflation.”

This action obviously has upset tho plans of the British and French Prime Ministers, and has lot loose forces in America itself of possibly incalculable strength and not wholly predictable direction. Such a stage setting might prove too much for the drama itself — namely, the adjustment of international economic affairs by way of the World Conference. Statement by Representatives. Frantic shore to ship telephone calls from Press Associations to-day elicited the following statements from Mr. MacDonald: —“ It is easy to realise that the events of the past two days have materially altered the situation since we left London, and have provided new elements for consideration. Quite naturally the abandonment of the gold standard by the United States will have a decided bearing on the coming discussions.” M. lieriot, in a statement on board the liner lie do France, said: “My mission is a new one. We supposed the President would await an exchange of views with Mr. MacDonald and myself before making a decision as his invitation was inspired by a desire to consult us about the international aspect of this decision. “Now that circumstances and arguments which certainly are powerful have hurried Mr. Roosevelt’s actions our future conversations will have a new significance, I refuse, even by conjectures, to presume what his intentions are." Isolation Impossible. In spile of the nationalistic tendencies of the situation there is a strong conviction that the extreme position which the United States apparently has assumed on tho eve of the international conferences may produce benefits rather than evils. It is pointed out that America, perhaps, now realises better than ever before that the policy of isolation is impossible, that the monetary systems of the chief nations of the world are not only in fact interdependent, but that provision must be made for their smooth, interdependent functioning. Finally, there will bo a readiness on the part of America to offer greater receptivity to foreign goods. America, by encouraging the buying of foreign goods, will accelerate the much desired domestic buying movement. In circles close to the Administration it is felt, therefore, that the “stage setting” should not prove altogether inimical to the impending world drama.

PRESIDENT’S POWER. EFFECT OF LEGISLATION. A MONETARY DICTATOR. United Press Assn. —Elm. Tel. Cnpyrlpdit. NEW YORK', April 20. Rapidly sizing up llie turbulent reaction of I lie inllulionary movement President Roosevelt 10-day collaborated wilh the advocates of currency expansion in drafting legislation intended to lie acted upon without delay. There is no gainsaying the fact I hat. Hie Black Bill, as il is called, which In-morrow probably will lie passed, gives the President power lu do many extraordinary things, hut il dees not, make it mandalory. From Washing(Continued In next column )

ton oomes word to-night thkt the bill is “90 per cent psychology and only 10 per cent dynamite.” The Bill represents a compound of many ideas and contains the germs of many schemes that have been advanced in and out of Congress. By Its composite nature it not only represents all views, but bespeaks the support of all factions with the possible exception of a small minority.

Its major Import and its sufficient safety-valve lie in the fact that Mr Roosevelt is made a monetary dictator with discretion not only to do suoh exceptional things for instance as to bolster up Federal stocks by open market operations, but, also te negotiate a wide range of treaties of a political and economic nature with foreign Governments.

To-day the United States Is off the gold .standard, but to-morrow the President will have power to return to it. The same applies to other steps with 'which the measure empowers him.

Mr Roosevelt, as a known “sound currency" advooate, is said to be basically opposed to “tinkering” with fche currency. He does not want monetary inflation. He wants credit ■inflation so that the wheels of industry and production may start moving on a large scale with the attendant benefits.

It Is felt that If the president finds that the experiments which the Black Bill will allow him are not producing the desired credit expansion, without Injurious effects on the monetary system, he will quickly abandon them.

It Is no seoret that in spite of the general good nature and willingness to “follow the leader” with which the American people have aocepted Mr Roosevelt’s programme in the past six week 9, all that vast tier upon tier cf legislation lias resOlved into Amerioa trying to “lift herself by hor bootstraps.” It has not been without grandeur, but it has been exasperatingly slow as concerns -the end and results. The people’s impatience, sharpened by years of suffering, .began to voice itself in Congress by well known and woll calculated demands for a radical inflation of the currency and a radical change in the monetary system. * Had Congress been allowed to have its own way there is no saying what unorthodox measures in regard to money it would not have forced through during tho next few weeks, apart from otherwise disrupting the legislative programme of tho President. • The best opinion Is that Mr Roosevelt, by putting himself at the head of the movement, ha& cleverly stopped It.

STOCKS HARDEN. THE COST OF LIVING. QUICK RISE PROBABLE. United Press Assn. —Elec. Tel. Copyright. NEW YORK, April 20. Internally the various developments of the last two days are obsoure for the purposes of Interpretation as to thoir future effect. Yet, obviously, they constitute intensely vigorous leaven. Wall Street has charged strongly into a hardening stock market with certain important issues, such as United States ‘steel, gaining 50 per cent, in price, while bonds—even those of the United States Government —are greatly depressed. Prices of commodities have made exceptional gains. The parallel Is drawn that going off the gold standard did not seriously raise the cost of living in Britain and that In America also the ‘man In the street’ will not he affected In “any way. It seems impossible, however, that the basic necessities of life and living can continue to have any more such hectic markets as those of the past few days without the cost of living rising quickly and perceptibly. That this, if it is not accompanied by the automatic adjustment upward of the present deflated wages, might seriously discommode that great element of the population the labouring class, seems inescapable, and the labouring class at present can ill-afford to adjust itself to any further dislocations.