STERLING'S LOW LEVEL

Press, Volume LXXI, Issue 21413, 4 March 1935, Page 13

STERLING'S LOW LEVEL

POUND AND DOLLAR STABILISATION FUNDS NOT USED C.VITED PRESS ASSOCIATION —BY ELECTRIC TELEGRAPH —COPYRIGHT, i i Received March 3, 6.35 p.m.} NEW YORK, March 2. The downward tendency of sterling and the currencies joined to it continued to-day in what experts interpreted as a major monetary adjustment. Sterling was quoted at 4.77 5-8, the lowest since November 1, 1933. Apparently the market is getting no support from either the British or American stabilisation funds. This inactivity gave rise to the opinion that authorities are willing, for the present at least, to allow economic forces to determine the new relationship between the pound and the dollar, possibly as a prelude to stabilisation. RECORD PRICE FOR GOLD Ji7/(i/10A A FINE OUNCE (Received March 3, 6.30 p.m.) LONDON. March 2. Gold, a fine ounce, is quoted at £7 6s 10-ld. Quotations (a fine ounce) are: — £ s. d. March 2..70 10.', February 28 ..741 February 27 7 3 ll. 1 , February 26 .. 7 3 6", February 25 .. 7 3 9^ February 23 .. 7 3 11 February 20 ..72 9i February 16 .. 7 2 8J

ECONOMIST'S VIEWS POIND AM) DOLLAR Fine gold touched 143s lid per oz in London on Saturday last. This was a record price- in the London market. Professor Douglas Copland, the wellknown economist, has been writing in the "Sydney Morning Herald" on the price ol gold. His remarks were printed before the latest rise took place. Up to then the highest, price recorded was 143s 3d a fine oz, and that was on October 11 of last year. The cause of the latest increase in the price in relation to English money is difficult to ascertain in New Zealand. Professor Copland, however, points out in his article that for those who place great store on the natural adjustment of economic forces the rise in the price of gold is seen to be the inevitable consequence of a scarcity of gold. "But we have become so accustomed to a sterling price of 85s a fine oz that we think there is something artificial and unsound about the present price. The price of gold is always, even in present circumstances, somewhat artificial in the sense that it is a price controlled either by law or by the official policy of central banks. In the United States, for example, th<legislation passed 'by Congress in January, last year, by altering the gold content of the dollar, ,'>xed a minimum price cf approximately 34 dollars an ounce. This is very important for the sterling countries. If we take the old par of 4.86 dollars io tlie pound sterling as a basis this gives a price of £7 sterling a fine ounce in London. This price cannot fall unless either the U.S.A. Congress amends th'j law or Britain is content to maintain a rate of exchange with the dollar above the old rate. As to the first, there is no basis for expecting any change in the American law in the direction suggested. On the contrary, the law at present gives the Government power to fix a higher price for gold up to a maximum of approximately 41 dollars an ounce. On the second point, it is clearly not in the interests of Great Britain to have a high sterling-dollar exchange rate. Short-term movements of capital will doubtless cause fluctuations in the rate, but as world recovery proceeds the short-term capital held in London is likely to go elsewhere for investment. This will tend to hold down the sterling-dollar rate, rather than to raise it. In the long run the rate will, of course, settle at a figure that allows British exporters to maintain effective competition in oversea markets. Technically, we may. therefore, state that the pound is not under-valued relative to the dollar, but rather over-valued. This being so, a permanent and significant rise in the sterling-dollar rate-is not likely. Without it a substantial fall in the sterling price of gold is also unlikely."

BRITISH TREASURY BILLS 'BRITISH OFFICIAL WI R KI.F.SS.) 'Received March 2, 5.5 p.m.) RUGBY, March 1. The amount applied for in tenders for £30.000.000 in Treasury bills was £55.995.000. The amount allotted in bills of three months was £26,945,000. and the average rate per cent, was 9s 5.13 d, as compared with 8s 4.15 d per cent, last week. M EETING POSTPONED RKSTRK.TIONS OX KILLING A meeting of the Farmers' Union was to have been held in the Chambe.' of Commerce building on Wednesday, when an address was to be given on" the restrictions on the killing of sheep by the deputy-chairman of the Meat Board, Mr T. A. Duncan. The meeting has now been postponed, as Mr Duncan is unable to be present, owing to pressure of business. The meeting will take place at a later date. LONDON MARKETS .l-KITBD I'RSSS ASSOCIATION—BY F.LICTRIC TF.LEG It AMI—COPYRIGHT.) (Received March 3, 6.30 p.m.) LONDON, March 2. Friday's closing prices were: — Cotton—Spot, 7.09 d per lb; April, 6.85 d. ' \ Rubber—Para. 4£d; plantation smoked, 6 13-16 d per lb. Jute—March-April, £l7 a ton. Copra—March-April, South Seas to London and Rotterdam, £l2 10s a ton; smoked, Marseilles-Genoa, £l2 7s 6d a ton; plantation, Rabaul to LondonRotterdam, £l2 15s. Linseed oil—£23 a ton.