CURRENCY STAILISATION

Evening Star, Issue 22456, 29 September 1936, Page 9

CURRENCY STAILISATION

RELATION OF DOLLAR TO STERLING RUMOUR GF SUPPLEMENTARY AGREEMENT Pres* Association —By Telegraph—Copyright PARIS, September 28. The lobbies are buzzing with a story of an impending Anglo-American supplementary agreement fixing the relation of the dollar to sterling, on which the United States is reported to be suggesting 4.95, while Britain is urging 4.70, though willing ,to accept 4.86. The Government has taken full measures to prevent Hostile demonstrations when the Chamber ra-ets this afternoon. All Rightist newspapers assail the proposals, M. Leon Bailby, in an article in 1 Lo Jour,’ emphasises that financial reconstruction in Britain and America was not entrusted to Socialists, and he comments: “ Incendiaries never make good firemen.” GOVERNMENT WINS FIRST ROUND PARIS, September 28. (Received September 29, at 10 a.m.) The Government won the first bout in the Chamber by 865 votes to 248, rejecting a right wing motion to refer the Gold Bill back to the Finance Commission. which was made a vote of confidence. CHAMBER ADJOURNS PARIS, September 28. (Received September 29, at 11 a.m.) The Chamber, after receipt of copies* of the Gold Bill, adjourned on the demand of the Radical-Socialists, who demanded that M. Auriol appear at a meeting of their parliamentary group to explain the sliding scale of wages, readjustment of civil service salaries, and removal of cuts in war pensions. FUNDS FLOWING BACK TO FRANCE PRONOUNCED EFFECTS IN LONDON. LONDON, September 28. (Received September 29, at 10 a.m.) The effects of the monetary devaluation were much more pronounced in the city in the afternoon. Funds are swiftly flowing back to France, resulting in substantial falls in English and French issues, including gold mines. Gold was unofficially quoted in the afternoon at £7 Os lOd. The Bank of England purchased £272,114 worth of bar gold. The bullion market report states that 427 bars of gold, valued at £1,200,000, were sold. THE EXCHANGE MARKET LONDON, September 28. There was considerable ■ excitement at the opening of the exchange market, and dealing in all currencies except French, Swiss, and Dutch had ready support, the dollar at 4.95, thus lowering sterling on that centre. Other rates were adjusted accordingly. There was instant reaction on the mining market,' with gold price fixing later in the day. THE GUILDER AMSTERDAM, September 28. Dr Colijn, in a broadcast speech, hinted that a slight weakening of the guilder could be expected. The Government would immediately create an exchange stabilisation fund v of £40,000,000, and would legislate to prevent an unnecessary rise in prices, PRICE OF GOLD CAPE TOWN, September 28. No South African gold will be offered in London to-day. It is expected that the next price fixed will be in the neighbourhood of £7 an ounce, with the possibility of a further appreciable rise shortly, ITALIAN BOURSES CLOSED TILL THURSDAY. ROME, September 28, (Received September 29, at 10.30 a.m.) The authorities have ordered the Italian bourses to close until Thursday. LATVIA JOINS STERLING BLOC RIGA, September 28. (Received September 29, at 10.30 a.m.) Latvia has decided to abandon gold and join the sterling bloc on September 29. LEAGUE FINANCES COMPLICATED GENEVA, September 28. (Received September 29, at 10 a.rn.l The Associated Press says that so complicated will the effects of revaluation of currencies be on the League that the Fourth Committee decided to refer the budget back to the Permanent Commission supervising expenditure. SWISS STABILISATION FUND BERNE, September 28. (Received September 29, at 11 a.m.) -The Government is inaugurating a stabilisation fund from the profits of 650,000,000 francs due to depreciation.

CSPuL'JS INSTEAD, C? DEFICIT EFFECT OF DEVALUATION ON LEAGUE FUND. GENEVA, September 28. (Received September 29, at 1.5 p.m.) The Associated Press says:—The League’s pensions fund, which lias converted all its holdings into gold, became solvent* overnight as a result of devaluation. The Associated Press learns that it made a profit of 4,000,000 Swiss francs. Now, instead of a deficit of 3,000,00(5 francs, it has a surplus of 1,000,000. Doubtless other curious repercussions from devaluation will be disclosed in the next lew days. THE BRITISH PRESS A CHORUS OF APPROVAL (British Official Wireless.) RUGBY September 28. (Received September 29, at 11 a.m.) The financial measures announced on Saturday are welcomed by the Press. • * The Times ’ says: “ The immediate objects are to prevent any disturbance in the exchange rates such as might otherwise be occasioned by the readjustment of the franc, and as a beginning to get rid of quotas and exchange controls now obstructing international trade. ' Other nations are invited to co-operate in this policy. There is at long last a real prospect of negotiations which may lead by gradual steps to effective economic co-opera-tion between nations, and thus to mitigation of political fears and suspicions.” The ‘ Daily Telegraph ’ says; “ After the first efforts at adjustment, in which quotas and exchange agreements will all come under 'review, trade should obtain a strong stimulus and internal sufficiency become a discredited doctrine. In the common action of France, the United States, and Britain there is the fairest promises since the war of ultimately bringing trade back to normal conditions and removing the moat powerful factor in world unrest. The * Manchester Guardian ’ says; “ The task before Governments is that of framing an economic policy in each country so as to get the best of the world’s goods for one’s money instead of putting up with inferior goods and smaller quantities of them. The three Governments are now pledged to a measure of co-operation perhaps never before equalled except between the Allies in wartime, and other countries may decide to join in.” The ‘Morrfing Post’says; ‘‘The joint declaration of Britain, France, and the United States offers the. hope that the stabilisation, at any rate de facto, is at last within the range of accomplishment. If this hope proves justified the advantage to international trade should be inestimable. FRiCZ OF GOLD RISES LONDON, September 28. (Received September 29, at 11 a.m.) To-day’s price of gold is the highest since May 2, when it was £7 0s 10d. Samuel Montagu and Co., bullion dealers, explain that both on Friday and to-day the price of sterling and the price of gold were fixed on a basis of the American exchange. As the value of the pound to-day had fallen 12 cents gold was expressed in terms of sterling, which has risen to a correspSnding extent. CHANGE IN GREECE ATHENS, September 28. (Received September 29, at 10.30 a.m.) The Government has decided to align the drachma with sterling, instead of the franc. DUTCH STOCK EXCHANGES TO REOPEN AMSTERDAM, September 28. (Received September 29, at 11 a.m.) Owing to the satisfactory reaction to the monetary measures the stock exchanges are reopening to-morrow HEAVY BUYIHG GOLD SHARES IN JOHANNESBURG. JOHANNESBURG, September 28. (Received September 29, at 10.30 a.m.) There were animated scenes on the Stock Exchange, and there was heavy buying «f gold shares, even non-pro-ducers advancing. CHANGE IN PLANS COMPENSATION PROPOSALS DROPPED. PARIS, September 28. (Received September 29, at 1.5 p.m.) Pressure by the Opposition has caused M. Blum to make a significant change in tho devaluation plans. The Government proposals provided for compensation to wage earners and State employees and for any rise of internal prices. The Opposition strongly urged that all the advantages of devaluation would soon be lost if they resulted in increased Government expenditure. Consequently, the compensation proposals were dropped. Cabinet will instead take action, if necessary, by decree. TURKEY ADOPTS POUND AS CURRENCY BASIS ISTANBUL, September 28. (Received September 29, at 1.15 pan.) It is announced that, the Government has adopted tho English pound as tho basis of currency instead of the franc.