CREDITS FOR BRITAIN

Rotorua Morning Post, Volume 1, Issue 13, 7 September 1931, Page 2

CREDITS FOR BRITAIN

The negotiation of credits for the British Government snce and the- United States has been explained in a memolandum issued by the Treasury. They are for tHe purpose of strengthening still further the exchange position of the sterling. The arrangement is for an. American financial group to take up, if requested by the Treasury, dollar bills to the ex--tent of £40,000,000, and in the case of France, a similar sum is bemg made available partly by credits from, its banks, and partly by the issue of bills to the French public. In each case the creaits are for one year. A feature of the negotiation s has been their cordially and expedition, and in this connection the Ti easury statement pays a tribute to the French Ministry of Finance, the Bank of France, and other financial people. The change of Government in Great Britain, which has been received with enthusiasm in France, no doubt has played a part toward this marked French cordiality. In the United States no difficulty, it also appears, was placed in the way of the negotiators. As is well known, the London money market is the nerve centre of the world's financial system, its leading feature bemg the undertaking to meet every legitimate deman'd in gold. A tremendous strain as evidenced in recent weeks, may thus^ at times be put upon the London money market, but British ciedit, M. Flandin points out, inspires well-earned confidence throughout the world. As the new Ministry progresses with its plans for the restoration of financial stability in Great Britain, the situation should show a marked improvement. In the meantime, the London Times' remarks should be remembered by those _who feel that the assistance of American and French financial inteiests may mean a weakening of the British system of which there is no evidence whatever. These credits (it points out) are really of an insurance nature. Their mere existence should have an excellent effect and a large portion of them may never be used at all. -