A NEW FEATURE

Rotorua Morning Post, Volume 2, Issue 573, 3 July 1933, Page 5

A NEW FEATURE

(Press Assn.-

MOVE BY DOMINIONS united objectioln to linking' sterling with franc HIGHER PRICE LEVELS

— By Telegraph — Copyrig ht\

London, June 30. The crisis took a further startling turn when the Dominion representatives requested Mr. Ramsay Mac-' Doliald and Mr. Neville Chamberlain to meet them. Only Messrs Bruce ( Australia) , R. B. Bennett (Canada), General Smuts .(South Afrxca), and G: W. Forbes (New Zealand) attended. ' " This meeting f ollowed a long cdn'vefsation- between Mr. Bruce and General S'muts an'd then' betwfebn Mr MacDonald and General S'muts." • 5: ' The Dominions are insisting on an immediate statement of Britain's monetary poiicy. ,'t " It is understood they wanted two xind'ertakings. Firstly that Britain will 'not " link sterling tb the franc, and secohdTy, that Britain 'will 'eni-1 hai-k "o'ri a poiicy of 'raising prices' | hy perhaps 30 "per Centj iinvolviiig i ppeh niarket "ppera'tio'ris, arid pos- { sibly the unorthodox' poiicy' of not" ! halancing the tjudget, hy emharkihg on extensive puhlic works programmes. ' , • If is "believed Mi" MacDonald and Mrf" Chamberlain demurred, but GenerAl Smuts]' emph'abised 'thaf' linking sterli'n^ Tp the ftaric 'w'ould be disastrous 't'o ^Africa, 'which'' depended dh up'holding th.e.' price] of gbl'd. Australia's case, forcefuliy present- ' ed, was that the collapse of world

prices in consequence of sterling and franc understandings would affect Australia's position as a debtor, especially in resepect to Britain. It is understood Mr. MacDonald and Mr. Chamberlain still oppose raising prices in an unorthodox manner, or by inflation, but General Smuts and Mr Bruce's apprehensions as to the effect of the linking of the sterling and franc may possible eause Britain to forgo such a proposal and refrain from participation in a European currency bloc, simultaneously refusing to follow the dollar. British authorities think that America's wave of inflation is subject to a sudden turn of the tide, and believe Mr. Roosevelt may shortly find it necessary to take the dollar in hand and negotiate stabilisation with Britain. In the meantime Mr. MacDonald sits on the fence, while the conference approaches its doom. Signs of a substantial agreement are most remote.