1939-01-18 — Page 11

HONGKONG DAILY PRESS

Finance and Commerce

GREAT BRITAIN AND STERLING BLOC

Advantages And Some

in

Disadvantages

Much has been written about the advantages of the Sterling Bloc from Great Britain's point of view, and it would be idle to deny the advantages of our being able to trade with countries whose currencies bear a stable ratio to sterling. For that rea- son, and because of the international benefits of the position of sterling as the centre of an Important International monetary union, official quarters in London have always Attached great Importance to maintaining and strengthening the Sterling Bloc,- says. Paul Einzig in "The Financial Times."

The embargo un foreign loans was relaxed in 1933 in favour of issues made for the benefit of Sterling Bloc countries, in order to strengthen their foreign exchange reserves and thereby to enable them to maintain the stability of their currencies in relation to .sterling Very little use, however, was made of this arrangement.

in practice. for the simple reason that most Sterling Bloc tries have a favourable balance in relation to Great Britain. Consecuently, there is no need for them to raise sterling by isssuing loans in London. Nevertheless. the adoption of the principle was important as an indication of the stress laid in off- rial quarters on the conception of the Sterling Bloc.

coun-

U.S. MAY STOP SILVER BUYING

Strong Movement In Congress

NEW YORK, Jan, 17 (Reu- ter-The Washington bureau of the Dow Jones agency re- ports that a strong movement is under way in Congress for a major revision of the Silver Purchase Act, with attalion being centred on proposaly to ban Treasury buying of for- eign silver.

The movement is supported by many members of the silver bloc. who fear that continued large- scale purchases of foreign silver may ultimately tend to exhaust the ready market for «domestle silver

Mr. Herry Morgenthau, Secre- Lary" of the Treasury, stated at a press conferener: "last night that he had not yet been consulted 're- garding the Senate proposals for

"Even more important is the fact relation to currencies outside the discontinuance of the silver buy- that Great. Britan is, inclined to Sterling Bloc.

S

#

ne policy.

12

LÖNDÖN NÖT PERTURBED

LONDON, Jan. 17 (Keuter)- While surprised, London silver circles are not unduly perturb- ed by reports of pressure be- ing brought on the United ban States Government to purchase of foreign, silver,

While it is realised that such

favour Sterling Bioerountries in- Indeed. as soon as it became quatters of trade, by allowing thepy| evident that the tenderly of ster- * farge export surplus their ling was downwards, several ad- trade with her. In the case of ditional

joined ". the countries Some Sterling Bloc countries, such Sterling, Bloc-temporarily at any 'Fudand and Sweden, this rate. France has been practically favourable balance has assumedļa member since her last devalua particularly large proportions. tion. when the limit of the depre- The theory that any such sur clation of the franc was fixed, not plus automatically accumulated in relation to the dollar but to in the form of an "herease of the sterling. During the late summer purchases cannot go on forever. sterling balances of the countries the Swiss franc and the Dutch well-informed circles are of the termination concerned, explained the willing-gulder also tended to move to a opinion. that their ness of Great Britain to lend to large extent in sympathy with under existing conditions could -the Sterling Bloc countries, and to sterling. As a result: the deprecia-only lead to a sharp fall in the make favourable trade arrange- tion of sterling did aut correct its price of the metal, and in view of ments with" them. From this. it over-valuation to anything like the the United States Government's was only one step to the theory extent it would have done in the large silver holdings it seems im- that the countries of the Sterling absence of the Sterling Bloc ar probable, that Washington would" embark on a policy the result of Bloc actually constituted a single rangement. trading, aren.

which might affect it as much as anybody else.

CONVERSION OF BALANCES

SPECULATIVE PRESSURE

J

Fürthermore, speculators of the

con-

Moreover, it is pointed out that For years, while the trend of Sterling Bloc countries were en- owing to a heavy gold influx, some funds was towards London. It wascouraged to use the London at which is desterulised, a substantially correct to say that ket, by the tact that sterling was siderable amount of silver must the surplus of those countries ac-stable in terms of Sterling Bloc remain to be purchased If the cumulated, largely though, by no currencies Throughout September Currency Act, stipulating a ratio means exclusively in the form of and October there was large spe- of 75 per cent, gold to 25 per cent. sterling balances: Even then. how culative buying of dollars in Lon-giver, is to be fulfilled. ever, the Central Barks of the don on Swiss account, for instance. Sterling "Bloc countries were ac-The resulting selling pressure on customed from time to time to the krone was offset by sales of convert part of their sterling sterling by the Swedish authorities. balances into gold.

and the British Exchange Equaliza-

It is true that they left the gold tion Account had to support ster- In London for the time being, soling against pressure due to the that they could use it in the event Swedish purchase of dollars, of a change in the trend of their trade. When they found. however,

DISADVANTAGES

Is.

that their trade continued to be The conclusion suggested favourable, they repatriated part therefore, that the Sterling Bloc of the surplus, which they assum-system. possesses disadvantages as ed to be unnecessary for immediate well as advantages for Great Bri- exchange purposes.

tain. From more than one point of view it would be against Great Britain's Interests 1! many more countries were to stabilize their currencies in relation to sterling. The British monetary authorities,

however, have no means of pre- venting such developments, since

country with 3 any

..

DEMAND FOR

SPELTER

Air Raid Shelter Programme

LONDON, Jan. 17 (Reuter)—' Some London metal market circles "state that the recent Improved demand for spelter is Connected with the Govern- ment's air raid shelter, pro- gramme.

INCREASED VULNERABILITY

Whether the gold was held in London or whether it was re- patriated... the conversion of ster- ling balances into gold Ipse facto tended to interfere with the ex-

Though no official statement is .pected working-out of the Sterling

moderate available regarding either quan Bloc system. But the actual with amount of gold or foreign extity or price. It is believed that drawal of funds from London dur- change reserve is in a position to orders have already been placed ing the last few months has pro.jpeg Its exchange to sterling with for between 100,000 to 120.000 tons vided much more striking evidence out asking London's consent. that that system's theoretical basis is really untenable.

It is believed that about "one hundredweight of spelter is used t one ton of steel.

of corrugated sheets of 14 guage. Offcipi quarters in London It is also believed that the extra should certainly have realized by thick sheets have an additional Though statistical figures are this time that, it is certainly, not coating of spelter in view of the not available, it is understood. that. Worth going out of their way to abnormal wear to which they may recently. withdrawals by foreign find new members of the Sterling he subjected when employed below Sterling Bloc countries have been, Bloc. On the other hand, it is the earth surface. relatively, almost as substantial as most unlikely that they will take withdrawals by countries outside active steps to discourage any the Sterling Bloc. This has been country from joining, even if that true not only of privately-owned were possible. Great Britain must balances, but, in some instances, of endure the disadvantages of the The most popular estimate of official balances. In face of this Sterling Bloc, in the same way as the Government's probable re- evidence, the theory upon which she accepts the inconveniences at quirements is placed at 500,000 the Sterling Bloc has been tulit up tached to London's highly pro-tons over a year, though it is an international pointed out that works could take orders up to 1,000,000 tons in the same period without interfering with the fulfilment of present in- dustrial requirements,

seems to need revision."

TWO-EDGED WEAPON From a British"point of view, the Sterling Bloc system is 2 two- edged weapon for other reasons also. During the last few months, sterling has depreciated by some 8

25

Atable role banking centre,

DUTY ON EGGS

LONDON, Jan. 17 (Reuter)--An

GERMAN CREDIT FOR TURKEY

per cent. This depreciation has order issued on the 'recommenda- resulted, to a large extent, from tion of the Import Duties Ad- the withdrawal of foreign balances, visory Committee "revokes the but from one, aspect its effect, has specific duties which are charged been favourable; lor it, has re-under the Finance Act of 1933 in lleved the pressure of an over-substitution 10% a general ad Negotiations which had' been valuation of sterling on the British valorem duty an eggs, not in their carried trade balance.

shell.

The favourable effect would,

Accordingly these goods are however, have been much more considerable but for the operation again llable front January 18, to of the Sterling Bloc system. If all general ad valorem duty of 10 countries outside the British Em- per cent.

pire had stabilized their currencies

in relation to the dollar, the

moderate depreciation of sterling

BERLIN, Jan. 17 (T/Ocean)----

during .the past fortnight here between the German Government and the Turkish delegation have, it 13 announced. led to

agree-

ment concerning the details of a credit arrangement, the conclusion of which had already been decided upon in principle on the occasion of the visit paid to Ankara last

October by the Reichs Minister of Economy, Dr. Walter Funk.

would have stimulated British ex- He said to Inspr. Gillan: ports to every country. As it is. don't know what made me do I. a number of currericles have moved I wrote the letters myself. but r

The Turkish Government will with sterling. Consequently, the did not intend to do any harm. I beneficial effect of its depreciation did not intend to keep the money, obtain a credit to 150 million upon British trade is confined to as I should not have known what Reichsmarks for the purchase of

German industrial products. the under-valuation of sterling in to do with it."

FINANCE

WEDNESDAY, JANUARY 18, 1939.-PAGE 11

CRAVEN

"A" VIRGINIA CIGARETTES

In PACKETS of 10.

also in

FLAT POCKET TINS (ideal for the Handbag or Pocket) of 20 and 50

'TRU-VAC' TINS of 50

"Yes Craven A

have a real touch of quality!"

Made in London

MADE

PEOPLE do appreciate the unvarying quality of Craven 'A' for they smoke more Craven 'A' than any other cork- tipped cigarettes in the world. Try Craven 'A', your throat will notice the difference in smoothness and coolness at once.

SPECIALLY TO

PREVENT Carreras Ltd. - 150 years Reputation for quality

SORE

THROATS

C. A. 490

HONGKONG WEEKLY PRESS.

AND

CHINA OVERLAND TRADE REPORT..

ILLUSTRATED

PUBLISHED EVERY FRIDAY

FULL REPORTS

OF

LOCAL NEWS, SPORTS, GOSSIP, TRADE, ETC.

30 CENTS A COPY

HONGKONG DAILY PRESS, LTD.

MARINA HOUSE (3RD FLOOR) 16-18, QUEEN'S ROAD CENTRAL.

THE 30251,

LAMMERTS' AUCTIONS

| PUBLIC AUCTION.

THE Undersigned have received

Instructions

to sell by

W

PUBLIC AUCTION

ON

THURSDAY, the 19th JANUARF 1939.

Commencing at 10,30 a.m.

At their Sales Room, No. 2 Connaught Road, Central

Room No. 205, 2nd Floor).

{I

Fur Coats, Fur Capes, Fur Muffs, Tweed Couts, Leather Bags, Imita- tion Jewellery, Silver and Crystal Ware. Perfumeries and Novelties.

On VIEW from WEDNESDAY, the 18th JANUARY, 1939.

Terms: Cash on Delivery.

LAMMERT BROS..

AUCTIONEERS.

PUBLIC AUCTION.

THE

HE Undersigned have received

instructions

TO SELL BY

"

PUBLIC AUCTION

ON

THURSDAY, the 19th JANUARY,

Commencing at 3.30 p.m.

At their Sales Room, No. 35, Hankow Road. Kowloon.

A QUANTITY OF VALUABLE HOUSEHOLD FURNITURE

Comprising:-

Blackwood

Ware, Teakwood Dining Room, Bed Room, Drawing Room and Office Furniture, Car- pets, Rugs, Pictures, Cutlery, Porce- lain, Glass, Brass and E. P. Ware, Gramophones and Records, Elec- iric Lamps and Heaters. Enamel Bath, Sewing Machine, Cooking Stove, Cooking Utensils, Books, etc., etc.

On VIEW from WEDNESDAY, the 18th JANUARY, 1939.

Terms: Cash on Delivery.

LAMMERT BROS..

AUCTIONEERES,

PUBLIC AUCTION.

THE

HE Undersigned have received

Instructions

...

to sell by

"

PUBLIC AUCTION

FRIDAY, the 20th JANUARY, 1939.

Commencing at 2.30 p.m.

At their Bales Room, No. 2, Connaught Road, Central, Ground Floor,

A FINE COLLECTION OF OLD CURIOS

Comprising:--

Old Porcelain Vases, Jars, Figures, Bowls, Cups, Plates, etc., etc.

Bronze, Ivory and Boap Stone. Ornament, Carved Wood Figures, Silk Embroidered Figures, etc., eta

miso

[ ́A FEW - PIECES OF OLD CHINESE

HAND PAINTINGS

On VIEW from- 19th JANUARY,"

1939...

TERMS: Cash on Delivery,

LAMMERT BROS.,

AUCTIONEERS.

יי