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Canberra Times (Newspaper) - November 20, 1967, Canberra, Australian Capital Territory National Library of Australia Sterling takes plunge Appeal to if for $l,250m loan to bolster Economy London sunday Aap Reuter. Britain took the plunge into Sterling devaluation and a huge austerity pro gramme last night in a drastic attempt to cure the nation s economic ills. At the same time As it Cut the Sterling us Dollar parity rate by 14.3 per cent the Treasury announced it was hopeful of securing a standby credit of $us1,400 million $a1,250 million from the International monetary fund. This plus further credit arrangements with a number of overseas Central Banks making a total of around sus3.000 million sa2.679 million will help Shore up the Economy until the devaluation starts boosting British exports and slowing the flow of imports. Failure to keep these in balance was one of the main causes of the devaluation Britain s first in 18 years. The devaluation Means Britain s exports will become cheaper for other nations to buy and sales of cars machine tools and a whole Range of items should get an immediate boost. But imported goods will Cost More which could Lead to a drop in the nation s living standards. Almost half of Britain s food comes from overseas. Devaluation is going to Send up the average Iton s housekeeping Bill and deprive the whole Nily of some of their luxuries. The devaluation should ease Britain s bid for membership in the european common Market. President de Gaulle had insisted that even before negotiations begin on British member ship Britain should devalue the Pound and end Sterling s role As a currency that serves to Fin Ance Trade throughout the world. Big defence cuts in Brussels the common Market commission today reaffirmed its View that negotiations should be opened with Britain on her entry to the trading group following devaluation. Britain s new Bank rate of eight per cent is Britain s highest for 53 years and the second highest this Century. The previous All time High was 10 per cent in 1914. The government plans to save More than �400 million next year in Public spending including defence. Britain already has a rough list of ways to slash �100 million from its defence Bill. Several possibilities have been selected for speedy investigation. Britain s major areas of defence operation abroad Are the far East West Ger Many and places around the Mediterranean. Britain s annual defence Bill runs at around �2,000 million. It has been pruned Stead ily in recent years. The Pound has been devalued twice before in 1931 and 1949. Its value against the Dollar fell from five us dollars to the Pound before 1931, to 4.03 us dollars up to 1949, and it dropped to 2.80 us dollars after the 1949 de valuation. The Chancellor of the exchequer or Callaghan in happier times. Am the reaction was. From the press the news of the world a London Sun Day newspaper which claims to have the world s largest circulation told the British government the time has come to quote Cromwell s words you have stayed too Long. In the name of god go ". Other Brit Ash sunday newspaper reaction included sunday Mirror a Day for Britain the d standing for disaster and disillusion As Well As for devaluation. There should be no nonsense about the Dun Kirk spirit. This is not our finest hour and All the gimmickry and the gobbledegook in Westminster won t kid us this time. Or Wilson must acknowledge a catastrophic defeat. The Kitty is More than empty it has been turned inside out after three years of his administration. Tie people a shatter ing defeat for which alibis such As the Middle East War and the Dock strike cannot be convincing. It Marks the collapse of the government s economic policies. The sunday times the government s action is much preferable to the alternative which might have been expected yet an other loan to bail us out and put us further into Hock. Sunday express the people of Britain have lost every scrap of Confidence in Wilson s administration and so has the rest of the world. Let us have a Gen eral election immediately. The observer a Brave act. The advantages of de valuation will still greatly outweigh those of any other possible course. The Washington Post a step in the right direction. The Post said however that the step did not go far enough. It suggested that it was a matter for regret that the British government did not permit the Pound to float to fluctuate freely in the foreign Exchange markets until it reached an equilibrium level. Because of this the Post said the deflationary measures accompanying the devaluation were unfortunate. From the parties the opposition Leader or Heath condemned the devaluation. The conservative party Leader issued a statement saying i utterly condemn the government for devaluing the Pound. This As or Callaghan said in the House of com Mons on july 24, Means a reduction in the real wage standards of every Mem Ber of the working class of this country. Twice in 20 years disastrous socialist policies and incompetent labour ministers have brought about devaluation created hardship at Home and Dis credited Britain abroad. In Wellington or Reginald Maudling Chancellor of the exchequer in the last British conservative government said he was shocked and stunned at Britain s devaluation. I was not expecting this at All. I believed the Brit ish government would stick to the former parity. The former Chancellor who arrived in new Zea land on Friday on a Brief visit announced he was cutting Short his trip and flying Home on tuesday. The Leader of the Mino Rity Liberal party or Jeremy Thorpe said the devaluation had been done in a great scramble sur rounded by something close to panic. Two labour parliamentarians blamed the labour government s handling of the Economy for the Ster Ling crisis. Or Desmond Donnelly declared this weekend s economic disaster. Is a devastating indictment of personal incompetence in decision and government failure. Unbelievable mistakes some of the mistakes have been unbelievable. Or Woodrow Wyatt said the government had brought the crisis on it self. Britain has spent More than it could afford Over seas he said. Or John Davis director general of the confederation of British Industry said the emergency Steps alone would not solve Britain s economic prob lems. Britain has got to be pulled out of the red by the determination of its people to work harder he said. Or Robert Booth director of Birmingham Cham Ber of Commerce repro enting the Havy industries of the midlands said de valuation coming after the freeze and squeeze was a bitter blow. It will be Only a temporary palliative unless the government accepts the need for Long term Taxa Tion and economic re forms he said. I from Europe the West German government gave the devaluation decision an unqualified Welcome. A government announcement said the West German Mark would re main unchanged and that the other european com Mon Market governments had likewise decided not to alter the Exchange value of their currencies. The statement said the Federal government expresses its respect for the courageous step in monetary policy taken by the British government. In Frankfurt the fed eral Bank president Karl Blessing said West Ger Many would take part in a credit operation to help bolster the Pound. He said West Germany s contribution to the credit would be among the largest with the United states. He said it would be necessary to defend parity but there would be help from other countries. The French finance ministry said in Paris that the value of the franc would remain unchanged. In Zurich the decision came As a Surprise to some commercial Bankers. They had considered it More Likely that another inter National loan to bolster Sterling could be. Arranged. Others however had not ruled out the possibility of such a move following recent Strong Selling pres sure against Sterling and widespread devaluation rumours on european Money markets. Swiss francs had been in heavy demand on International foreign currency markets in the past few Days As financiers and businessmen were seeking a hedge against possible devalue tion.? Boh Saniamaria Ctc-7 10.30 tonight painful haemorrhoids nearly 75 people in every Hundred p suffer from pile haemorrhoids. & yet Many people avoid discussing or even getting advice on How to Deal with this distressing complaint piles haemorrhoids Are aggravated by Many fa6torsranging from Over exertion to unsuitable diet piles afflict people in All walks of life businessmen housewives manual worker the Young and the old. It s just not sensible to be the distressing discomfort the pain and itching of piles. Or to rely on old fashioned superficial Relief. This kind of neglect can Lead to the a Remote i tablets serious step of surgery. Now with Vare Moid you just Swallow two tablets with each meal Vare Moid is now regarded by overseas specialists As the anti inflammatory treatment for piles. Vare Moid treats the cause. Its Active principle is Ethyl rut Osife. This is the specific therapy for the inflamed anal veins of haemorrhoids. Its Posi Tive results were proven in years of clinical testing on actual sufferers from piles Many of whom had suffered for Over 20 years. Ask your chemist for Vare Moid tablets today. A week s course will convince you. In simple and dignified treatment. Jar two tablets with meals. The modern Oral treatment for haemorrhoids product of Xzma. Ftp. Ltd var4935 London sunday Aap Reuter. This is the full text of last night s economic state ment by the British Treasury. The government has decided that in order to achieve a substantial sur plus on the balance of payments consistent with economic growth and full employment the Exchange rate of the �1 should be lowered from 9.30pm to night from sus2.80 to the �1 to sus2.40 to the �1, a change of 14.3 per cent. This change brings with it fresh opportunities but at a heavy Cost. The main Opportunity is that our exporters should be Able to sell More goods overseas such As motor vehicles and tractors ships aircraft chemicals textiles and much else. But if we Are to derive the full Benefit from it we must reduce the growth of demand by Consumers at Home in order to shift the use of our resources to exports and import saving. We need an improve ment in our balance of payments of at least �500 million a year and the government intends to ensure that this is achieved. The Banks Are therefore being asked to limit Bank advances except of course to priority borrowers especially exporters. Bank rate is being raised to 8 per cent immediately. From Midnight tonight the hire Purchase regulations on the Sale of cars at Home will require a mini mum Deposit of 33 1/3 per cent and a maximum re payment period of 27 months. The government propose to curtail Public expenditure in the following ways. Defence expenditure will be reduced by Over $100 million next year. Except in development areas the extra amount received by manufacturers in the set selective employment tax Premium will be with drawn thus saving Over $100 million. Other pub Lic _ expenditure including nationalised industries Cap ital expenditure will be reduced by �100 million. The Export rebate now costing just under �100 million a year will be abolished since it will no longer be necessary. The major disadvantage of the change in the Exchange rate is that it will cause a Rise in certain prices though this will not happen All at once. It is essential that Price increases should be con fined to those unavoidable cases brought about by in creased import costs. It is essential equally to ensure that these Price increases do not result in Large wage claims and settlements for such action would mean that Industrial costs would go up once More and the competitive benefits of devaluation would be frittered away. The government is therefore entering into immediate discussions with the Tuc trades Union Congress and the Chi confederation of British Industry in order to ensure that the operation of the agreed policy on prices and incomes measures up to the requirements of the new situation. A strict watch will be maintained on dividends and it is proposed to raise the rate of corporation tax due to be fixed in the next budget to 42i per cent. Sympathetic consideration it is the government s firm intention to take at the right time the 6teps that will be needed in order to protect the most Vulner Able sections of the Community from hardship resulting from the change in the Exchange rate. In accordance with the rules of the International monetary fund the change in our Exchange rate has been notified to the fund who have concurred. We have made a formal application to the if for an immediate stand by of sus1.4 million sa1.250, 000,000 and have been assured that this application will Receiva prompt and sympathetic consideration. Further credit arrange ments have already been made with a number of overseas Central Banks which together with the new if 6tand-by, if approved will provide new resources of around $us3 billion. By Royal proclamation to be submitted to the Queen in Council Tomor Row the Banks in the uni Ted kingdom will be closed to the Public on monday november 20. Bank 6taffs should report for duty As usual. The 6tock exchanges will also be closed on Mon Day. . Dollar will not be devalued Washington Sun Day Aap Reuter. President Johnson moved swiftly tonight to make Clear that the United states would not devalue the Dollar in the Wake of Britain s de valuation of the Pound. Us Treasury officials declined to comment on a report from London that the United states was contributing sus700 million sa625 million towards the sus3.000 million sa2.679 million package to help Britain s position. President Johnson said the nations of the free world Are United in their determination to keep the International monetary system Strong. The United states will continue to meet its inter National monetary responsibilities. I reaffirm unequivocally the commit ments of the United states to buy and sell Gold at the existing Price of 35 dollars an ounce. I believe the United kingdom will at the new parity achieve the needed improvement in its ability to compete in world markets. The attain it of equilibrium by me United kingdom will be a healthy and constructive development in International financial markets. It has now become Clear to the British authorities and the International monetary fund that the United kingdom was faced with a fundamental imbalance which called for an adjustment in the Exchange rate he said. Us Bankers expressed no Surprise at the British devaluation the associated press reported except that it was such a modest amount. I think they were pretty late in taking the step one said. But he added i think most people expected they would Cut it More. Olympic toughness Means something when you follow the horse trails it Means Security i safety when you hit jagged Rocky Road surfaces safety on tight hairpin bends. Olympic olympic toughness in car bus truck and tractor tyres Means you get there and Back safely. Wherever you go. 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