STERLING DECLINE

Hokitika Guardian, 27 October 1932, Page 5

STERLING DECLINE

LONDON OPINION DUE TO SEASONAL INFLUENCES. _ „ V ("United Fnsn Association—By Electric Telegraph—Copyright.) LONDON, October 26. The low' price of the pound is attributed in city circles here to influences of a 'seasonal character, whicfi are naturally more marked since the departure from the gold standard, accelerated by selling by foreign speculators, whose operations are considered to be attended by a considerable measure. of risk to themselves.

On the London Stock Exchange, today, the. feature at the clos e was the sharp recovery in leading British Government stocks especially War Loan Assented, at 102. Answering in the House of Commons a question as to whether the speculation and attacks on sterling had been checked by the exchange equalisation account, the Chancellor of the Exchequer Mr Neville Chamberlain, replied that he was unable to say to what extent speculation jn exchange existed, but he had no doubt the reserves of foreign currency in this accouot acted m a deterrent against the activity of speculators. 'The purpose of the ac. count was to prevent excessive fluctuation in the value of and it was never intended to keep exchange at a fixed price, or keep it within a fixed range of values in opposition to seasonal or other tendencies.

SWITZERLAND AND GOLD. ABANDONMENT PREDICTED. LONDON, October 26. The ‘ Daily Telegraph’s” Geneva correspondent states that trade in Switzerland is in a disastrous condition, owing to the fall in the demand from abroad, due to the high value ol the Swiss franc. The hotels there are almost ruined, while the watch-making industry is at a standstill. The Sw.ss Federal Railways are showing a deficit of £1.590,000 for the period o'f January and September,. 1932. The farmers are clamouring for a Government subsidy to avoid ruin. It is likely that Switzerland will go off the gold standard. BRITAIN’S INTERNAL POLICY. REPLY BY PRIME, MINISTER. RUGBY, October 25. The Prime Minister replying in the House of Commons to a question, said the Government’s policy would continue, to be to provide, jn every way in its powef. conditions requisite for a national revival of trade and industry by balancing the budget; by converting the national debt to iv lower rate p| interest M opportunity offered, and to facilitating the supply 0 f cheap .an' abundant money; Iby stimulating trade within the Empire, and by negotiations •with foreign countries for the removal or reduction of existing. barriers to. international trade. No country, could hope to escape altogether from effects of such .a state of depression as now existed throughout the world, .but on the points .mentioned in the question, namely production and exports, Britain had remained relatively unscathed since last December, , whilst great declines wer, e occurring in the United States, France and Germany.

Mr Ho.re Be'isha informed a questioner that revenue to September 30, under the Import Duties Act was £11,881,00, the Abnormal Importations .Act £1,356,000, and the Horticulture Products Act £72ff,Coo.

REACHING NATURAL LEVEL. IN RELATION TO WORLD TRADE. (Received this Hay at 9 25 m.m, LONDON, October 26. “People are unnecessarily perturbed about the .fall In sterling, which,, without the support of the equalisation fund, is reaching a natural level m relation to the amount of trade with the outside world,” said Mr Horne. “The difficulties are small in comparison with the advantage of having sterling at' a natural level, except in one respect, in. which there is a possibility of great difficulty, namely the level of currency obtaining throughout the Empire. Unless there is a definite arrangement between the communities .in the (Empire it >s obvious that any system of preference can ibe broken up by Changing the currency values. Consequently Hne of the first essentia.s is to fix the ratio of' currencies, which is not difficult.’’ SOUTH AFRICA AND THE GOLD STANDARD. CAPETOWN, Oct. 26. The terms of the Union’s eight millloan, issued at 965, interest 3$ per cent,,, indicates that her gold Standard Policy has not affected her credit in relation to. sterling.