CURRENCY DEVALUATION

Otago Daily Times, Issue 26637, 6 December 1947, Page 7

CURRENCY DEVALUATION

PANIC BUYING IN RUSSIA SOVIET OFFICIAL’S DENIAL WASHINGTON, Dec. 4. The Acting Secretary of State, Mr Robert Lovett, officially confirmed today that the State Department is in possession of reports that “ panic buying ” is going on in Russia and that devaluation or changes in Soviet currency was scheduled to be made tomorrow. Mr Lovett made the disclosures before the Senate Appropriations Committee and said he had cabled the Moscow Embassy for a full account. Soviet officials in Washington are denying any knowledge of the reports, but the belief is that they have considerable substance. Neither Mr Lovett nor other informed quarters ventured a view' as to the significance of the developments. ... . . The most of the buying is reported to have centred on such things as jewellery, rare books, and anything with a physical and possibly continuing value. „ .. Discussing reports that there was financial panic in the Soviet due to the impending devaluation of the rouble, American diplomatic authorities to-day took the view that a temporary state of confusion among the people.exists in Russia arising from the Government’s efforts to cope with inflation and wind up war-time rationing These officials, giving what they described as a majority view among their associates, said that Russia had developed the same difficulty as other countries with surplus currency, but added that Russia’s basic economy was not believed to be shaky. New York observers believe that the revision of Russia’s financial and price structure would be aimed at draining off excess currency, particularly from war-rich peasants. Ostensibly, the step will be taken to drive speculators anc. the last remnants of capitalism from the Soviet scene, says the World Telegram correspondent. It was also said in Washington that efforts by American correspondents to report the story had jfeen thwarted by the censorship.