CURRENCY CRISIS

Hokitika Guardian, 23 September 1931, Page 5

CURRENCY CRISIS

WHAT BILL MEANS. United Press Association. —By ElectricTelegraph.—Copyright.) LONDON, September 21. The Gold Standard’ Amendment Bill prov’des for the suspension ‘‘until His .Majesty, by proclamation, or otherwise directs.” A section of the Act of 1925, whiv.h requires the Bank of England to sell gold at a fixed price, and a third clause authorises the Treasury to take such measures as may be expedient in connection with exchange and the difficulties from the suspension of tile gold standard. ' Britan, which was on the gold standard before the war, reverted to it on April, 1925, when it was annoupeed that the export of gold would be free, the Gold Standard Act, passed in the ‘following month, requiring the Bank of England to • sell gold bullion at par. At the time considerable controversy took place as to the merits of this decision. SLUMP IN THE £. RECORD DIP AT NEW YORK. LONDON, September 21. Agents in London are quoting the following rates for pound sterling:— Paris 100 franca, New York 4.20 dollars, The Reichsbank In Berlin has fixed the sterling rate at 90$ marks. It is recognised in well informed circles that some depreciation in the value of the pound for the time being is inevitable, but it is unlikely to be so great as the falls which have occurred on the Continent. NEW YORK, September 21. Fluctuating widely, the pound sterling dipped to a new low level for the present decade, to three dollars seventy-five cents., before rallying to around 4/35. The Board of Governors of the New York Stock Exchange, before opening to-day, issued a' notice prohibiting short selling of sterling. iSterling cables on the foreign exchange market sold at only four dollars, compared with Saturday’s close of 4.85 dollars. The Canadian dollar dropped to a nominal value of 94$ cents on the local foreign exchange market to-day, the lowest in many years.

Brokers, however, said that there was practically no call lor Canadian funds. Some banks went so far as to refuse quotations.

U.S.A. BOOM

STOCKS' GREAT RECOVERY

NEW YORK, September 21

The New York intlney Market, lifter early losses, staged a remarkable re* covery, stocks gaining from otte to 26 points. United States steel stocks reached 'B3s, being up 5J points, Leading railway stocks reached 74, gaining 26 points. The market then lagain reacted shortly before the close, but it dosed very strong, most of the issues showing a gain. There were no fewer than 4,400,000 shares traded. This is the heaviest day's business for 18 months. I

The smaller stock exchanges throughout the country have followed the; example of the large bodies in stringently controlling short selling, and demanding that ail such transactions shall be revealed, including the interested parties.

LITTLE FOREIGN TRADING

NEW YORK, September 21

Financial markets here to-day presented a formidable front to the tTdal wave of unrest which swept across the Atlantic. The judgment of the officials of the Stock Exchange, who turned deaf ears to urgent appeals both home and abroad, to close the market, was vindicated by the unexpectedly orderly scss’on. The market surged vigorously after an opening slump of one to seven points, showing gains of one to nine. A secondary reaction in the late trading cancelled much of the advance, the list closing irregularly, lower, with several losses of one to four points. Canadian dollars closed down seven cents. ,= Bankers experienced difficulty, m establishing a market for foreign currencies. In only a few •instances were the rates more than normal, the Italian lira sagged two cents, and the Spanish peseta ten. The French an Swiss francs were unchanged. Newspapers of all shades of opinion express admiration for the determined courage with which Britain is facing the danger.

foreign stocks. |. „ if SLUMP AT NEW YORK. j f NEW YORK. September 21. f Heavy liquidation occurred to-day on the foreign bond market of the New York Stock Exchange. Australian and Canadian bonds broke severely. T„ heavy trading, the Canadian National Airways lost up to ten points Australian Ommnenwcaltli f‘ ves (19 '. K '' fell to 36. ditto 1057 to 37; Australian 4> per cent, to 30, Brisbane- fives fell to 29, losing 101 Points: Sydney o-, a per cents to 30. United Kingdom o} per cents remained firm around last week’s quoting price of 94}. I German Government bonds * y '§ South American bonds also fell. Even Foiled States Government issues were unable to resist the selling wave, declining half a point. SILVER. RISES. NEW YORK, September 21. * Silver has advanced H eept-s to 29} [cents, the highest level since July.

STERLING DEALINGS BLOCKED. GENEVA, September 21. The Bourses at Zurich, Geneva and Basle have provisionally suspended sterling quotations. The Bourses at Brussels, Stockholm-, Oslo and Copenhagen were not open to-day. NEW WORK, September 21. A Winnipeg message says that liberal buying of wheat to-day boosted values one and thlee-quarters to one and five-eighths. Chicago grain was steadier at fractional losses to-day, after hitting new low levels for the year, the strength of grain marts at Winnipeg and Liverpool being decidedly a bullish factor. NEW PRICES OF GOLD FIXED. LONDON, September 21. The price of gold was fixed this morning at the nominal quotation of 81 Id ii per ounces fine. Saturday’s price was 84/11$. LONDON EXCHANGE CLOSED. LONDON, September 21. The Stock Exchange remains closed to-morrow. Financial interests in the city are of the opinion that i-t will remain closed for several days. CAN GOLD STARDARD BE NOW WORKED. "LONDON, September 22. The “London Herald’’ (Labour), referring to the gold standard, says: “Great Britain has gone off gold, because France and America have been hoarding gold. It will force their bankers and the Governments to reconsider the whole problem of the working of th e gold standard.” STERLING STEADIES. LONDON, September 21. “The Times” says: “The fall in the value of sterling has been less than had been predicted. At the end of the day it was inclined to appreciate in terms of dollars and francs. WAR LOAN INTEREST “SAFE.” LONDON, September 22. In answer to a- question, the Chancellor of the Exchequer referred to the apprehensions expressed, by the foreign holders of the British five per cent. War Loan of 1929, that their holdings might be compulsorily converted. He said that such fears were entirely groundless. RISE IN COST OF LIVING. LONDON, September 21. Tn the House of Commons, the Independent Labour Party Group moved the rejection of the Gold Standard Amendment Bill, on the ground there was no provision for checking the rise in the cost of living. Mr Henderson (Labour Leader), and other leading members of the •Opposition, did not support the motion. The closure was applied to the debate, and the Bill passed.

APPEAL FOR UNITY

LONDON, September 22

Rt. Hon. P. Snowden, in his broadcast address, throughout England, gave a concise resume of the world sensational week-end happenings. The keynote of his address was, an urgent appeal for national steadiness. He said: “The pound won’t go the way of the mark or of the franc.” . The Government was able to avoid inflation. Once, however, that vicious circle of inflation started, it might be impossible to check it. The British Budget was now most securely balanced.

Tbe Chancellor of the Exchequer proceeded to outline the causes of the drain on the gold and also as to re-' newed foreign uneasiness over exaggerated reports about the happenings in the British Fleet. He explained that it was not, internal troubles, but troubles of other countries, which had rendered the maintenance of the- gold standard impossible, as inquiries had revealed that the sales of sterling were predominantly on foreign account. He emphatically insisted that there was .no cause for the slightest anxiety about the money in the British banks, which was secure. “Though the value of the pound may fall in the terms of foreign currency,” bo said, we can be assured that the extent of that fall will. be limited. Tt is likely to result in higher prices on imported foodstuffs; but these should not he great.” That was really the worst that the great mass of people had to fear. While the country wa-s well stocked with es- , senbials, there wa-s not the least dang- [ ?r of any shortage. I He concluded by saying that Britj jsh nationals who now were abroad I on pleasure, might render the country !a service, by returning forthwith and spending their money at Home. ) SURPRISING MOVE. * TO INCLUDE LABOUR. IN NATIONAL GOVERNMENT. LONDON, September" 22. Negotiations have now been opened a between the Prime Minister. Mr MacDonald. and Mr A. Henderson (Laj hour Leader) for inclusion of the Lahour Opposition in the National Government. L is SI Med that Mr Henderson welcomes the idea, as he considers that the first duty of ail oartie- at the present time is to support the nation’s welfare. Sir Austin Chamberlain is consulting the Conservative opinion on the matter,

MR MACDONALD FOR TARIFF. LONDON, September 21. The “Daily Express” says: “We must prepare to establish an Empire system of credits upon a sure foundation of an Empire customs union.” The same paper says it understands chat Mr MacDonald is now prepared to go to the country on the full Conservative tariff programme. 'A meeting of one hundred members of the Conservative 1922 Club decided in favour of an immediate election, pledging their support to Mr MacDonald on the condition that he will advocate a tariff. . > i'A ■STIMULUS TO EXPORTS. LONDON, Sml ember 22. The “Morning Post” says: “If the pound should fall, that circumstance will at least afford a stimulus to our ex-ort trice, of vhi h our manufacturers sliou.d not be s.ow to take advantage.

BUY BRITISH!

LONDON. September 21

The “Daily Telegraph” S ays: The British people must make the protection of their home market- tlieii piimary aim. They must buy British or Dominion goods.”

TREASURY ORDER. (Received this day at 9.25 a.m, LONDON, September 22. The Treasury order that until further lotico Britain’s purchases of foreign jxclnuige or transfers of funds fol inquiring such exchange, shull be pr°nibited, except for normal trade and reasonable travelling purposes. Railway companies are increasing fares to the Continent in relation to ‘xchange. One travel agency has al•eadv increased the lares by twenty per rent. STERLING *IN PARIS. PARIS, September 22. Sterling is officially quoted at 104 francs. STOCK EXCHANCE. LONDON, September 22. The Stock Exchange re-opens to-mor-row. BELGIAN PRECAUTION. BRUSSELS, September 22. Twenty-seven leading banks have formed a six millions sterling consortium to prevent a slump in Belgian securities. MR THEODORE’S VIEWS. (Received this day at 9.25 a.m) CANBERRA, September 23. Mr Theodore (Federal Treasurer) referring to the possibility of reverting to bimetallic currency, expressed the opinion that she had gone off jzold standard permanently, and cither silver currency would be Uukeu with gold as a common measure of value or some more complex basis with the currency of countries having central reserve banks would he found.