DEVALUATION OF FRANC

Evening Post, Volume CXXIII, Issue CXXIII, 10 April 1937, Page 9

DEVALUATION OF FRANC

OFFICIAL DENIAL

"NO REASON FOR DISQUIET"

(Received April 10, 11.30 a.m.)

PARIS, April 9.

The- Finance Minister, M. Vincent Auriol, conferred with the Exchange Equalisation Committee,, after, which, he denied reports that France"would allow the-franc to fall below the legal limit of 111 to.the- £ sterling.. He also denied that modification, of the Three-Power , Agreement- : , was imminent and, declared that-there.was no reason for , disquiet owing to exchange fluctuations, in. regard-to which the Equalisation Fund would take appropriate measures..

The Exchange Equalisation Fund was established by- the British- Parliament in 1932 with authority to, borrow £150,000,000 in order to-buy; and sell foreign. currencies so as to keep sterling steady and, prevent disturbances in the money • market through the action of speculators. The Fund also took over'the' balance of the war-, time dollar fund. In 1933 the amount of the Fund was-raised to £350,000,000 owing to the "bulling" of the pound by timid capitalists in the United States and in the gold bloc countries, particularly France. ■ In 1934 a -similar fund was set' up .in ;' the Ignited States arid a stabilising ' fund was established in last year Rafter she left, the gold standard. ;■ The currency agreement which came into force last October' between Great Britajn,France, and the United States was to ensure that: the three funds" would maintain : a practical equilibrium amongst currencies.' < Other,- currencies have come into line with those.of the three great financial Powers,'; •; ■- '.."" A- cablegram: received from. London on Thursday reported that consternation was caused'in the city by rumours that'the United' States intended to cut the buying price' of gold frO'.r its present level by 35 cents per ounce in order to restrict the .present influx from Russia. : :. ■ ' ■ . ■ Yesterday it was reported ■ that the future, American gold policy was still being anxiously ' debated in London where nerves were so-: badly shaken that the-wildest stories1 had found at least some - ready to . believe ' them. Prices in' all sectioni: were .marked down,, sometimes; sharply; and a similar weakness has : infected the Continental Bourses,' notably'■■ in Paris. J Wall Street itself had one of. its black- i est days. : ' ~'. ' ■.-' . ,"> .■ . ;■. j