CURRENCY PACT

Evening Star, Issue 22457, 30 September 1936, Page 9

CURRENCY PACT

A GENTLEMEN'S AGREEMENT WORKING AS EXPECTED Press Association—By Telegraph—Copyright WASHINGTON, September 28. It is understood that an arrangement for co-ordinating the British and American' stabilisation funds to protect the Anglo-American conditional currency agreement with Franco is being negotiated. Apparently a soothing effect after Saturday’s flurry is resulting from the use of the American stabilisation fund to counteract what then seemed to be a Russian attack on the pound. Mr Morgcnthau is believed to have acted independently of Britain and France when be purchased the Russian State Bank’s offering of £1,000,000. Mr Morgcnthau said the plan to tie the American, British, and French currencies was working as projected. He described the currency arrangement as a gentlemen’s agreement. There was no fixed ratio. Any currencies involved in the operation would be determined from day to day, almost from hour to hour. He emphasised that the American intention to act with others ensures a smooth currency situation. Belgium is expected to enter the pact. REVIVAL OF INTERNATIONAL TRADE BRITISH PRESS OPTIMISTIC. (British Official Wireless.) RUGBY 7 , September 28. Events abroad following the French Government’s decision regarding the franc, showing a wide extension of currency realignment for the revival of international trade, are recorded in the papers with approval, and optimistic conclusions are generally drawn. Latvia to-day decided to link her currency to sterling, and Press reports suggest that Greece will do likewise. As the result of adjustments made or generally believed to be in contemplation it is argued that a substantial area embracing most of Europe, nearly all Africa, the whole of North America, and of Australia, and considerable parts of Asia will enjoy stable exchange relations and be set free gradually from hampering currency restrictions, FRANCE BANS GOLD EXPORT PARIS, September 28. ‘Le Journal’ states that an official announced that there would be an immediate embargo on gold exports. BILL PASSES" FRENCH CHAMBER PARIS, September 29. (Received September 30, at 1.30 a.m.) M. Blum intervened in the debate in the Chamber of Deputies to point out that they were discussing a fait accompli. Even if the Chamber threw out the Government it could not go back on what had been done. An amendment modifying the sliding scale of wages adjustment was adopted by 335 votes to 199, and the Bill was finally adopted by 350 votes to 221. DRASTIC CHANGES BY SENATE COMMITTEE PARIS, September 29. (Received , September 30, at 2 p.m.) The Finance Committee of the Senate spent many hours drastically changing the Devaluation Bill. This, as voted in the Chamber, permits the Government to fix the rate of devaluation between 25 and 33 per cent., and Cabinet to determine the gold content of the devalued franc between 43 and 49 milligrammes of gold. The Senate is reconciled to the decision, but objects to the clause investing the Government with full powers to regulate prices, which was substituted for the sliding scale clause. ' The Senate regards the new clause as the thin end of the wedge of dictatorship. It also objects to the requisition of gold. FAVOURABLE RECEPTION CONTINUES PRICES YVELL MAINTAINED. i Itriiiah Official Wireleci.) RUGBY, September 29. (Received September 30, at noon.) The favourable reception given to the announcement of the devaluation of the franc and the monetary agreement continues, and in political circles the proposals for currency readjustments are welcomed.

On the London Stock Exchange there was a tendency to mark time, and values in some sections displayed some irregularity, but prices generally were well maintained.

The weakest market yesterday, as was expected, was gilt-edged securities and other fixed interest-bearing securities. The record of to-day’s gold dealings show that 603 bars of an approximate value of £1,410,000 were disposed of.

LONDON STOCK EXCHANGE

LONDON, September 20. (Received September 30, at 2 p.m.) Ihe London Stock Exchange markets were quieter. Dealings in dollars, though heavy, were lighter than the previous day. Business began in the newly revalued Swiss franc and Dutca guilder at 21.321 tor the former and i) to 9.1 for the latter. The French trano cannot be quoted until the Bill is passed. British Government stocks rallied. Gold shares are still in demand, but the commodity markets are quieter.

FOREIGN EXCHANGES. . LONDON, September 29. (Received September 30, at 11 a.m.) Dealings opened in Swiss francs at 21.32 J, compared with Friday’s 15.45. Dutch guilders are 9.07, compared with 7.441 and New York 4.94. Batavia is not quoted. THE NEW GUILDER. AMSTERDAM, September 29. (Received September 30, at 11 a.m.) Dr C'pliju announced in Parliament that owing to the contusion of the international money market the Government did not intend to fix the gold value of the new guilder. The extent of the depreciation could not be foreseen at present.