SOUND MONEY

Hokitika Guardian, 10 November 1932, Page 5

SOUND MONEY

CANADIAN POLICY

ANNOUNCEMENT BY PREMIER.

(United Press Association —By T .ectric Telegraph—Copyright}

OTTAWA, November 8

A recent loan of thirty-five millions dollars was, secured by the Dominion Government jfrom the banks on two year notes at four per cent. This was m accordance with an idea that an easing of money is highly desirable in the interests of a business recovery, so Mr Bennett, Prime Minister, told the House on Tuesday. So far as he was aware, said the Prime Minister, the best and most conservative opinion throughout the world was committed to this idea. Such was certainly the case in Britain and in the United States.

The Prime Minister made a further statement, in reply to a question that, while he felt that the Government would be quite justified in joining with other countries in the adopt.on of monetary measures! designed to encourage. a recovery, broad action along this line was not necessary, and he reiterated his previous declaration that his country will not depart from its established principle of sound money. He said 'that easier credit conditions meant if anything, an imrovenient in the market for gilt-edged bonds, and he expressed the opinion that the present opportunity to purchase Canadian Dominion Government bonds at a four and a half per cent, basis might not present itself again for a long time. There w r ere no more temporary loans to redeem, and the next maturity was in August of next year.

CANADIAN DOLLAR DECLINE.

BRISK BUSINESS IN WHEAT.

MONTREAL, November 8

The outstanding feature in the wheat market at the moment is the question of the trend of the Canadian dollar in the international markets, states the ‘‘Market Reviewissued by Messrs James Richardson and Sons, i leading grain organisation. “The recent debates in the Dominion Parliament advocating a polity of mrrency in Canada, coming at this time when the Dominion Government has, by means of a bank loan, increased the paper currency by thirty-five million dollars,, and has caused wide;pread attention, with the result that eople in other countries are now withIrawing their funds from Canada, and, as a result, the Caadian dollar tas declined in value in the outside markets.

This, of course, places Canadian wheat on a more attractive export basis, and the immediate result has been heavy buying of Winnipeg wheat futures as against sales in Chicago, which has strength in the Winnipegmarket. Unless the Dominion Government issues an emphatic denial of inflation, the Canadian dollar -.is ikely to decrease still further in value, with the consequent result of further independent advances in Canadian ?rain prices.”