BANK RATE COMES DOWN

Sun (Auckland), Volume III, Issue 809, 1 November 1929, Page 1

BANK RATE COMES DOWN

Reduction to Six Per Cent EMERGENCY HAS NOW PASSED Stocks Firm Up In London United P.A.—By Telegraph—Copyright Received 10.15 a.m. LONDON, Thursday. A REDUCTION of the bank rate to 6 per cent, is announced by the Rank of England. The rate had been raised from 5| per cent, to 64 per cent, on September 26 last.

The reduction in the discount is regarded as an indication that the emergency which caused the last advance has now passed. French demands for gold are expected to cease for the time being. An immediate and favourable effect was noted on the Stock Exchange, prices firming all round, notably giltedged stocks, with Australians especially strong. GOLD FROM NEW ZEALAND The Bank of England has received £375,000 in sovereigns and halfsovereigns from New Zealand. An additional £125,000 is on the ivay. bringing the total consignment to £500,000. The Bank of England’s discount rate was raised from 5i per cent, to 6J per cent, (the highest it had been since April, 1921) on September 26, because by that week the stock of gold had fallen to £18,000,000 below the £150,000,000 recommended by the Cunliffe Committee. This was due to a continued efflux of gold to the United States and France. The following table shows the fluctuations of the bank rate from April, 1921, onward: Date. Percentage. April 28, 1921 6J June 23, 1921 6 July 21. 1921 55 • November 3, 1921 ...... 5 February 16, 1922 4J April 13, 1922 .. .. .. .. 4 June 15, 1922 31 July 13, 1922 3 July 5, 1923 4

March 5. 1925 5 August 6, 1925 4* October 1, 1925 4 December 3. 1925 5 April 21, 1927 4* February 7, 1929 September 26. 1929 October 31, 1929 6 STRINGENCY IN CANADA OFF THE GOLD STANDARD FOR SOME MONTHS REQUEST MADE TO BANKS (Received 11.40 a.m.) MONTREAL, Thurs. The “Montreal Star” today stated: “Because of the strigency which has existed in Canada for money, and in order to protect Canada’s position with regard to its gold holdings, the country has been unofficially off the gold standard for some six months. At the verbal request of the Minister of Finance, Mr. J. A. Robb, the banks refrained from shipping gold, although Canadian currency is at a discount, making New York shipments profitable. Although the condition has been existent for some time, it was not generally known that Mr. Robb had taken the step which investigation now shows he did take. The situation is regarded as being extremely acute: but it is believed that the condition will right itself in the ordinary course of events.”