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Hokitika Guardian, 3 October 1929, Page 4

iirxioros the reference yesterday to tiie gold mvvenve.it, • and 'tne laev that the A.unit or ixiigiand liad to increase

tne cuacount rate, it is interesting to imie Ironi a New ipne nmu.cial journal 01 .-iugu.it, t.iat tlie action was prediev ea in .i.i.enca in auvance as inevitable. ..ns cv.iciusiou was readied from a stißty or woiid lrnaiice, and it was thought that tire increase would not tie avuiued. Tne Ai.iencan banking autliority said that uittuii a little over a ...ouch the Bnn.c’s weekly statements have rocorued a precipitate mop in go.d Holdings from d,yj on June idtlib alien ti.e peak of the opring recovery in geld holdings was leueiied, to sojl-JJ,iOo,bdd , oil Julj Zoth., birue the last statement was published the bank, is reported to have lost an additional sum which will bring the total substantially below the level of £150,006,060 which was deter ? mined upon by the Cunhfle Committee in 1918 as the normal minimum. it will be recalled that when these holdings reached this minimum in February of this year the bank rate was raised to o£ per cent. Since the advances by the Bank oF England are always made a full one. .per cent, at a time, a change at this time will carry the rate to per cent. That* the authorities in Great Britain will be most reluctant to impose this higher cliaige upon industry goes without saying, hut unless the Bank has some assurance of a change in foreign exchange tendencies in the near future it is difficult to see how an increase, m ...e rate can be avoided. Foreign exchanges did' not' improve'and so the prediction came true. Probably it did not arrive as early -s was expected, and but for the Hatry failure might have been avoided. "With a financial crash of that nature, it is obvious the financial position must be maintained at ‘as sound a level as possible. The advance, however, will have untoward effect on trading for credit will be restricted, and that is not conducive to wider intercourse. But it is essential a sound policy must be maintained, and the advisers of the Bank of England may be expected to attempt nothing more nor less. A check to trading at a ti lie when Great Britain was feeling the advantage of improving business will not be welcomed. More especially, too, because of the season now advancing which will restrict many trndes and lesser traffic and genera,l intercourse. That fact might in itself be but another -reason for a timely check financially so as to avoid loose methods in trading at a time when there should be ,a close haul in business leanings. There is the possibility of an early lift in trade and intercourse following the visit of Mr Ramsay MacDonald to the United States. At the conclusion of that auspicious event there is bound to be some effect on the financial barometer, and it will not be surprising if the rise will not, also, affect the bank rate, in Great Britain favourably. In that event all will be.well that ends well.