BANK RATE INCREASE

Sun (Auckland), Volume III, Issue 786, 5 October 1929, Page 11

BANK RATE INCREASE

MR. SNOWDEN DEFENDS DECISION ONLY POSSIBLE COURSE British Official Wireless LONDON, Thursday. The outstanding feature of today’s proceedings at the Labour Conference at Brighton was the speech bj T Mr. Philip Snowden, Chancellor of the Exchequer. In discussing the effects of the bank rate, he boldly proclaimed that, it was no use railing at the Bank of England. It had been quite clear for months that a financial situation was developing which would require some measure to be taken in order to avert certain otherwise inevitable consequences.

The raising of the bank rate, which was the only means in existing conditions to restore unfavourable exchanges and the only corrective of the drain on British gold, had been delayed as long as possible. In no quarter where opinion was informed had there been a suggestion that in the circumstances any other course was possible. Mr. Snowden said the time of greatest strain on our exchanges was approaching, when it was necessary to pay for food, cotton, and other raw' materials. If. when payments had to be made, sterling was at a discount, the cost of raw materials w'ould be considerably increased, and that of course would be reflected in export trade. The rise in the bank rate had turned the American exchange in our favour, and had had the same result in every country in Europe except France, and even there a movement in Britain’s favour had begun. The effect of the rise on British funds was negligible. It was also folly to attribute a growth of unemployment and a decline of exports to a single cause.

In conclusion, Mr. Snowden • remarked that in the matter of the bank rate the Treasury had no influence and no responsibility.