DEFENCE OF POUND

Dominion, Volume 32, Issue 144, 14 March 1939, Page 12

DEFENCE OF POUND

Measures In Britain

Unlike the experience of New Zealand, the various embargoes which the British authorities recently placed on foreign exchange dealings were not to prevent a flight of capital, but merely to place difficulties in the way of speculation in sterling. Ever since 193 a the British Treasury has been anxious that bankers should, as far as possible, curb speculation against the pound, though at the same time taking care not. to hamper legitimate trade.' That intimation at once raised the delicate question of where to draw the line. Consultations among the varied interests in London resulted in the issue of a circular from the Foreign Exchange Committee to all London banks in midJanuary, defining in some detail the classes of business which either would or would not be regarded as legitimate. Broadly speaking, stated the “Economist” in reporting this development, any trader will remain perfectly free to follow his normal business, even if that involves forward exchange transactions, provided that they are abnormal and proper hedge against, future exchange fluctuations. The same applies to stockbrokers with connexions in foreign centres. There is no impediment against the transfer. of funds abroad, either for investment,or for deposit in foreign banks. Nor is a customer deterred from borrowing from his bankers against normal collateral, and it is not the banker’s business to ascertain how the customer proposes to use his loan. On the other hand, a banker will not henceforth lend sterling against gold or foreign currencies. In some instances, the bankers will not have sufficient information at their disposal, and for this reason the co-operation of the Stock Exchange was formally sought. It has also been made known that the authorities, in certain foreign centres have agreed to help, notably in New York, Amsterdam and Switzerland. FINAL DIVIDEND N.Z. Drug Company By Telegraph—Press Association. DUNEDIN, March 13. At a meeting this afternoon the directors of Keinpthorne Prosser’s N.Z. Drug Company declared a final dividend at per cent, making 8 per cent, for the year. The dividend is at an unchanged rate on last year.