Monday, Jul. 30, 1934

King Sterling

Recovery began in Great Britain when she unhooked Sterling from gold, scrapped traditional free trade and set her industries humming behind new tariff walls. Today this hum has become a "boom" with riveters dinning all day in and out of London. Last week came another omen of British recovery as hawk-nosed, stoop-shouldered Chancellor of the Exchequer Neville Chamberlain loosened the Empire's money bags a trifle and dangled the prospect of loans before countries which have hooked their currencies to Sterling. When he took the pound off gold, Chancellor Chamberlain slapped a precautionary embargo on loaning British money overseas. Technically this embargo still blocks even British loans to the Dominions, but Mr. Chamberlain has leniently winked at several issues of that sort. His real aim is to make Sterling the standard trading medium of the world, the king of currencies. Since the dollar abdicated all title to that regal role Mr. Chamberlain's task has been much eased. Last week the Canadian dollar was not pegged to Sterling as were the currencies of all other Dominions. Currencies of the following countries now move in close sympathy with Sterling: Norway, Denmark, Sweden, Finland, Estonia, Portugal, Argentina, Brazil.

Rising in the House of Commons last week, Chancellor Chamberlain said that while he is not yet ready to revoke Britain's foreign loan embargo entirely he is willing "to consider special cases" and make important exceptions to authorize loans which are sought under two major heads: "'First, Sterling issues by a country within the Sterling bloc where the loan is needed to increase Sterling assets of that country and so to minimize the fluctuations of exchanges; second, Sterling issues on behalf of any borrower where the proceeds are calculated mainly to produce direct benefit to British industry."

This meant that from now on Great Britain is launched on an official policy of special favors to lands in the money empire of King Sterling.

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