GOLD COUNTRIES ACT.

Waikato Times, Volume 114, Issue 18986, 1 July 1933, Page 7

GOLD COUNTRIES ACT.

DEFENCE OF CURRENCIES

EUROPEAN BLOC MOOTED. PRESSURE ON BRITAIN. United Press Assn.—Elec. Tel. Copyright. LONDON, June 30. M. Bonnet (France) In an Interview with a representative of the News Chronicle said there was complete unanimity among the gold oountries regarding stabilisation and a determination to defend their currencies. “ We are preparing to make a categorical declaration to that effect,” said M. Bonnet.

Asked whether Britain would be associated with the declaration he replied: “That is another matter. We are old enough to walk by ourselves. The position is that the declaration will be made and Britain and America may join in if they wish."

The British Government remains Inflexible in its determination to resist any course likely to lead to the formation of a European bloo. It is supported in this attitude by Dominion circles, where fears are expressed about the consequences of President Roosevelt's inflationary policy. It is conceivable that a substantial rise in price levels in America, which Mr Roosevelt expects, may force lower price levels upon the rest of the world, with resultant complications that would shake monetary systems and eventually jeopardise the franc. This would have grave consequences for Britain, if in the meantime she were lured Into linking the franc with the pound. In these circumstances the measure of Britain’s resistance policy is the measure of French apprehensions for the franc. Dollar’s Fluctuations.

The United States dollar jumped widely on the foreign exchange market from 4.41 J dollars in .the morning to 4.25, falling again to 4.30 and closing at 4.29 J.

Gold countries, fearing that' the pound would follow the dollar, made a dead set on Britain to secure an open pledge of alliance for the maintenance of the gold standard, and strongly urged the linking up of the pound with the franc. It is no secret that the Bank of England and the Equalisation Fund are giving considerable support to the French franc, and through It to the lesser gold currencies. The Continental delegates, therefore, cannot understand why the British Government will not officially endorse this attitude by a declaration in favour, of the maintenance of such currencies as remain stable. These 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 as regards future stabilisation. America and Stabilisation. It is reliably stated that Professor Raymond Moley, Dr. O. M. Sprague and Mr James Warburg, America’s economic and financial advisers, have been in -consultation concerning a method by means of which fluctuation might temporarily he held between certain defined narrow margins. One plan would involve action by the central banks lo prevent speculation. The Daily Express says American circles believe stabilisation will occur during the week-end. In the meantime the crisis regarding stabilisation continues.

The latest development is a hurriedly convened meeting for this evening between Messrs MacDonald and Chamberlain and the British expert advisers and the delegates from the five European gold countries, who have been In conference all day. It seems that the United States is not yet prepared to discuss stabilisation, but may be Interested in an international exchange device which would prevent wide speculative fluctuations of currencies without hindering Mr Roosevelt’s inflationary powers. It is understood that this was the gist of Professor Moley’s conversations with Mr MacDonald.