STERLING AND DOLLAR

Hawera Star, Volume LIII, 17 June 1933, Page 5

STERLING AND DOLLAR

Hopes for Stabilisation ENGLISH AND U.S.A. BANKS Prospect Of Early Pact GENTLEMAN’S AGREEMENT. R ATE SHILL INDEFINITE (United Press Association--By Electric Telegraph Copyright.) Received 10.30 a-.m. to-day. LONDON, June 16. Though it is officially declared that agreement on tho ,stabilisation of the .sterling; and the dollar has not been reached there are reliable indications that a decision will be. reached in a few days. It is expected that the agreement will be announced early next “It lias been definitely decided that the Bank of England and the American Federal Reserve Bank will conclude a gentleman’s agreement for the temporary stabilisation of the sterling and tho dollar,” says the “Daily Mail.” The rate is still undecided, but probably it will be 4.05 dollars to the pound, compared with the original par of 4.86. “M. Moret has- pledged the -Bank of France to aid both England and America to maintain the agreement, thus enabling prenstabilisation, which was a necessary prelude to a final stabilisation based! on a new gold content of the sterling.” “The gentleman’s agreement does not mean that eit-heir the sterling or the dollar will be linked to gold,” says the “News-Chronicle.” “It is douutful whether the figure at which the ex-' change is stabilised will be announced. There is no indication that the American representatives can guarantee that America will not be forced 1 to devaluate if stabilisation checks the inflationary boom.” “■Mr Chamberlain is informing the market that he does not wish money to leave England to purchase American .securities-, thus extending the Treasury ban. It is not intended to interfere with dealings in American shares already held in Britain, but unless market arbitrage difficulties are overcome the London prices of American shares will bo divorced from New York’s. The Chancellor is seeking the co-operation of arbitrage dealers tou the request has not the force of law. Mr Chainiberlain’s request to the market suggests that the authorities realise that the pound is at present over*-valued, to the detriment of British exports, and suggests that Britain made a rash bargain in an endeavour to patch an awkward failure at the outset of the conference to reach durable agreement. “Mr Chamberlain’s statement should completely reassure anxious souls apprehensive lest the British should be rushed into a premature return to the gold standards,” says “The Times” in a leader. “Few will cavil at the British decision to remain off gold until there is a reasonable certainty of stability of exchanges and a higher price level.

“Debtor primary producing countries have only too much reason to know that the post-war gold standard 1 has become an India-rubber footrule. Many of Mr Chamberlain's conditions for a return to gold are incapable of early fulfilment. The real merit of the statement is that it cleans the air and enables the delegates to concentrate on approximate stability between the principal currencies, also .on measures to secure the conditions necessary for the re-estaiblishment of an international standard.”

' DENIALS AT WASHINGTON.

NO AGREEMENT YET INVESTIGATION ONLY WASHINGTON, June 16. The secretary to the Treasury, Mr W. Woodin, in a formal statement topigbt said that the United States Government had not agreed to any stabilisation of the currency. He stated that such reports from London could not be founded in fact. “The discussions in London with regard to the subject must he exploratory only, and any agreement on the subject will he reached in Washington and not elsewhere,” he stated. ROOSEVELT NOT ADVISED. CONFERENCE POWERS LIMITED. Received 12.10 p.m today. WASHINGTON, .Time 16. It was stated to-day at White House that Mr. Roosevelt had heard nothing •. any way of a suggestion for currency stabilisation from London. It was almost asserted that nothing would be done or could be done by the eonfernce on stabilisation unless-the action ere approved by the President and the acting Secretary of State.