The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1926-05-15
STERLING is
BACK TO GOLD
PARITY BASIS
Continued from mage one.)

NSOHllHueu lTOIH page OHe.J
Exchequer Winston Churchill was
accompanied by rise in the rate to
above $4.84, the highest point in more
than ten years, and thereafter the
,cpound gradually drew nearer the in
evitable parity basis.
The first great collapse in sterling
came in 1919 following the with
drawal Of artificial support which had
been in effect for about two years.
The abrupt decline from $4.76 in
March to $3.50 late in the year was
accelerated by the disquicting events
of that period, foremost of which
were the failure Of the peace treaty
to pass the United States senate and
the unsettlement Of world trade.
Sterling's darkest days were en-
countered in February. 1920, when
the cumulative effects of postwar
disappointMents were reflected in "A
veritable trading panic. A perpen-
dicular break Of 81 cents in four days
carried the rate to the lowest point in
H. .ory at 1919.
Rally Followed
= brisk rally followed. Announce
ment by chancellor Of the exchequer
that the British treasury would
pay off its portion of the Anglo
French loan. and if necessary ship
gold to the United States to accom-
plish the liquidation, initiated the
upturn. Thereafter rumors Of gold
shipments contributed to steady ad-
vance, and although $4,000, 900 in gold
which was consigned to the United
States actually was for payment Of an
Argentine loan. the propaganda was
effective in lifting the rate to $4.06A
by April 5. For the remainder Of that
year the course of sterling was gov
crned by trade demands and gold
shipments.
Further recovery in sterling took
place in 1921, when the price moved
up from a low Of $3.53A to high
mark of $4.24ls late in the year
Among the factors which contributed
to the improvement were the settle
ment Of many internal problems, ap.
proach of the Irish settlement and the
favorable impression created by the
disarmament conference in the United
States. This year saw the rise Of
speculative activities in exchanges or
a scale hitherto unknown. These
operations supplied much Of the pur'
chasing power which put sterling
above the 81 mark.
The gradual appreciation OF ster'
ling continued until December. 1929
when violent upturn OF about q
cents in q week to high level OF
$3.50 attracted the worlds attention
to England's recovery. The rise was
aided by favorable trade figures. thu
better condition Of the British Treas
ury. the return to London of large
balances by international companies
and the trapping" of q large mum
Der Of spectators who had sold ster
ling for decline.
By February, 1928, sterling al
$4.72h had reached its highest leve
since March, 1919. The uncertain
trend OF foreign political events. thu
>-growing strength Of the Labor part,
in England and unfavorable trade fac
tors. however, combined to force tn
rate down about 46 cents to $4.2G D!
November.
Depressed in 1924
Accession Of the labor governmen
in England. coupled with vague tall
Of a tax on capital and fears Of al
inflationary policy, started a flight
Of British capital to this countr,
early in 1924. which depressed ster
ling still further to $4.20. 4 turn i
the tide came with the spring Seac
ton in the stock market here, tn
extreme ease Of American none!
rates and higher interest rates
London, all Of which tended to attrac
funds back to the British capital.
Acceptance of the Dawes plan ac
celerated the advance which gainet
no usentum through the suecessfu
fIofstion Of the international loan u
Germany and the, return Of the Con
Hi{f1atives to pewsr in Great Britain
nespite ~ Sly heavy volume q
trade and essin bills, due to custom