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Hokitika Guardian, 2 March 1933, Page 4

That there should be anxiety regarding 'the influx of foreign money into London, as the statement by the Chancellor of the Exchequer revealed, is an illustration of the difficulties of monetary management in a world of unstable currencies. Before th© war, when London was the undisputed financial centre of the world, it was the repository of vast sums of foreign money, which continuously flowed through its intricate organisation, leaving a substantial residue of profit to Britain. But the world was not then liable to take alarm as easily as it has done i:i recent years, and there was no serious risk of sudden demands for the withdrawal of such investments, a,i occurred with devastating effects in the autumn of 1931. From one point of view, it is gratifying that dollars and francs are being converted into sterling investments, but since the control of the gold standard is root operative, British authorities have to take. elaborate precautions—to prevent the i'flux of funds from abroad forcing up the exchange value of the pound tee rapidly and to protect it against severe depreciation by any heavy withdrawals. The methods employed are not pnb-

holy displayed, though- it has recently been remarked that officers of the Bank of England who had no experience of handling exchange control before the financial crisis have improved their technique “beyond recognition” in the last year or so. They, have controlled the appreciation of sterling by buying foreign currencies according to the origin of the influx and the bank has amassed a large addition to its gold stocks as ai insurance against any embarrassing withdrawal of foreign funds. The December debt payment reduced the bank’s gold holdings of £19,677,000 to £120,628,C00; the latest return shows an increase during the nine weeks of no less than £22,355,000, the total now being £142,983,000, so that the reserve hag risen from £25,530,000, equal to 18 rear cent, of public liabilities, to £61,734,000, or 38.70 per cent.