EXCHANGE CONTROL

Manawatu Standard, Volume LX, Issue 162, 8 June 1940, Page 7

EXCHANGE CONTROL

BRITISH MEASURE. AIMED AT STABILITY. TRADING FACTOR. (United Press Association—By Electric Telegraph—-Copyright! (British Official Wireless.) Received June 8, 11.10 a.m. RUGBY, June 7, The Treasury announced to-day several important steps ta ken in continuation of its policy of basing 1 foreign trade on the official rate oi exchange and of limiting the volume of transactions in the free market for sterling. These measures will help to ensure, the benefit of a stable rate of both to British exporters and to importers in other countries.

From the point of view of the British war effort they will secure that full value is received for United Kingdom exports in the form of either imports or currencies urgently required for payments for materials, foodstuffs, and munitions essential to the prosecution of the war. It should he noted, however, that in the case of the United Kingdom trade with the sterling area, which includes all the British Empire, with the exception of Canada, Newfoundland and Hong Kong, the Anglo-Egyptian Sudan and Iraq, no question of exchange arises, and with Canada there is an agreement having the effect of a payment agreement? PRINCIPAL FEATURES. The riieasures announced to-day are as follow: Firstly, for the time being no licenses will be given for the sale in the United Kingdom of securities owned by persons resident outside the sterling and franc areas. Secondly, all exports from the United Kingdom to the United States and Switzerland will have to he paid for in sterling obtained from the Exchange Control at the official rates, or else in United States dollars or Swiss francs, respectively. Exchange will normally be provided in their own currencies to residents in the United States of America and Switzerland in respect of commercial and current financial payments, including interest and dividends due to them. Thirdly, as regards transactions' with other countries outside the sterling and Allied areas, broadly the same effect will be achieved by extending the system of payments, agreements and special accounts which enables a settlement to be effected in sterling through the official channels at official rates. Fourthly, regulations, requiring payment for exports of jute, rubber, tin, whisky, fur, and diamonds to certain countries, including Belgium, and the Belgian Congo, the Netherlands, and the Netherlands Empire, and the' countries of South and Central America to be obtained in certain specified foreign currencies, or in sterling, are revoked in the case of exports to countries other than' the United States and Switzerland. Arrangements similar to the measures announced in London to-day have been or will be made by other countries in the sterling area. NOTE CIRCULATION.

Exceeding even last week’s record high issue, the United Kingdom note circulation has been expanded by £12,000,000 to £509,000,000 There is some tendency to regard the increase uneasily, but financial circles declare the expansion indicates neither an inflationary threat nor hoarding. The principal causes of the currency outflow«are an increase in till money in bank branches, and the rapid-growth of the national wages bill. The latest •Exchequer returns disclose that the total expenditure for the week ended June 1 was £71,000,000, which was easily the highest for this financial year. The amount applied for in tenders for £65,000,000 of Treasury hills was £110,365,000. The average rate per cent, for bills at three months was 20s 4.77 d, against 20.4.11 a week ago.