STANDARD ABANDONED

Rotorua Morning Post, Volume 1, Issue 25, 22 September 1931, Page 3

STANDARD ABANDONED

government takes steps 0l attack on sterling f markets demoralised iGOLD withdrawals make jEASURE necessary jjns of meeting the demoralisation of the money Je end of Iast week and of checking the severe draizi s*|, goid reserve, the British National Cabinet has jjspend the gold standard as a safeguard of Great llernal position.

rUGBY, Sunday. Ainet, which held ?esterday and again Liine the situation iP- ■tjorali^'tion of the \ :jer markets during j ;3Ji(i excessive with"f ^epositn from Lon!ra mentous decisions 4 ,'rjced in the followJ. !covenirnent has deA s-jltation with the i t f that it has become ■ rend f1"-' the time j ^Bn of sub-section j 'jj.e Gold Standard ^ ',requires the bank ^ 'iixed priee. A bill i to bc introduced lu •' ,tjon of ihe Governirlianient to pass it t.wnoi'row. ti.-1 Bank of 3 autlior l >-ed to pro'.jn juii k'ipation of I 'arliamein'. xvhicli Mive led to .gince Me middle of jting to more than ive bet n withdrawn ninarkt-. The with:"ja met ; artly from : carr-. • y held by fhnd. ■ ;.rtly from J Sit ( t o07000,000 j [{lyinat" secured H :Eng:and from New i and paic'y from the each aii i American j j to i'h' . "-0,000, re~T :DV the - -icvernment. ;-V fev; days with31 balav ,-es have ac- ? arply th--t the Govt j ;3Ii(i to uike the deF( jjbove. This decis1 ; a not ;■ "ec't the ob- ? Qi.vt : ' nt or the lD i whici: :.r e payable I' -HCI0S. I j dlng c-f the Bank of sto • £130,000,,ef regart! ♦..> eontingenhv& t" i-e met, it is >1 >* ti/.- reserve to y4 , •} iv i !»r, rruption of I : hvvs. The ten a - al for the •ei i ^ their civ iumers, and

| there is no reason why sterling transj actions should be affeeted in any way. j "It has been arranged that the j Stock Exchange shall not be opened ; on Monday, the day on which Par- ! liament is passing- the necessary lej gislation. I "This will not, however, interfere ! with the business of current settlement on the Stock Exchange, which will be carried through as usual. "The Government have no reason | to believe that the present difficulties j are due to any substantial extent to 1 the exportation of capital by British j nat.'onals. Undoubtedly the bulk of ! the withdrawals have been for forej ign account. They desire', however, 1 to repeat emphatically the warning recently given by the Chancellor of the Exchequer that any British citiJ zen who increases the strain on the ! exc'ianges by purchasing foreign se- | cur'ties himself, or assisting to do so, j is deliberately adding to his country's difficulties. "The banks have undertaken to co- ! ope:ate in restricting purchases by J Brb ish citizens of foreign exchange exc ?pt those required for the actual j neels of trade or for meeting existi ing contracts, and, should further j me; sures prove advisable, the Govj ern nent will not hesitate to take the:n. "The Government arrived at their dec'sion with the greatest reluctance, but during the last few days inter- ; nat'onal financial markets had become 1 den oralised, and had been liquidat- | ing their sterling assets, regardless ! of their intrinsic worth In the circumI starces there was no alternative but to protect the financial position of this country by the only means at our disposal. "The Government are securing a bah nced Budget, and the internal | pos'tlon of the counti-y is sound. This j pos'tion must be maintained. It is one thir g to go olf the gold standard with. an unbalanced Budget, and uncomrolled inflation, and it is another j thirg to take this measure not bej cau e of interhal financial difficulties, j but because of the excessive with- | dra vals of borrowed capital. The ulti-" j mai e resourccs of the country are : eno 'raous, and there is no doubt that i the present exchange difficulties will ! pro 'e only temporary." i 1 he bank rate will be 6 per cent.