Exchange Fund To Be Increased

Hawke's Bay Herald-Tribune, Issue 137, 26 June 1937, Page 5

Exchange Fund To Be Increased

— PrAflti Assn. — CoD.vriffht.)

MAINTAINING PRICE OF GOLD Addition of £200,000,000 Proposed NO EXPLANATION GIVEN

( Kv ,l,p.lAorrn.r»h"

(Received 26, 11.0 a.m.) LONDON, June 25. The Chancellor of the Excheqner, Sir John Simon, asked the House of Commons for authority to increase the Exchange Equalisation Fund by £200,000,000. He is deferring explanation of this until the debate. He stated that, in addition to recent heavy selling of gold, there had been much financial disturbance abroad, and the tendency was for capital funds to move to London. Questioned why only recently he had said that the exehange fund was sufficient, Sir John replied that there was no sudden change in policy, but circumstances cnight develop. Mr. James Maxton asked: "Why this urgency? What has happened sinee yesterday to cause this alteration in the House 's business t" "Doubtless the Prime Minister will make a statement about the order of business," replied Sir John. "I am conscious of my great responsibility and I am confident that the action I am proposing should be taken." I Mr. Neville Chamberlain then an« oounced the necessary Bill, whieh will be taken through ' ali its stages next week, beginning on June 28 and con cluding on July 2. The London market interpreted Sii John Simon 's announcement to mean that the gold price will continue around 140/-, as a result of which there waa a sharp rise in gold shares. Gold is quoted at 140/6|d. Rumours of further devaluation of the franc resulted in a widening of discount rates. Forward francs, three months, are quoted at 120, a month ahead 118 to 119. The Bourse indulged in a wild outburst of speculation, internationals and certain industrials soaring. ?