Sterling flop creates panic WALL ST-1929 TOKYO—1972?

TORY CHANCELLOR ORY CHANCELLOR of the Exchequer Anthony Barber will be in Luxembourg today to give an account of his panic devaluation to Common Market Finance Ministers. He will face a chilly reception and hostile criticism in view of the monetary chaos which it has caused.

Foreign exchange markets remain closed throughout the world while bankers and monetary authorities anxiously gauge the extent of the crisis.

The electrifying effect produced by the Tory decision is an indication of how far the international monetary situation has deteriorated since Nixon's measures on August 15, 1971. It has destroyed at a stroke the agreement on exchange rates worked out last December 18 at the Smithsonian Institute in Washington.

'Now that sterling has lopped, the whole monetary regime is put in doubt,' commented leading New York banking expert.

Sharpest expression of the crisis came in Tokyo where wave of sell-at-any-price orders Hooded stock market and brought the biggest ever plunge in prices.

The weekend meeting of central bankers from the Common Market countries and the four seeking admission only revealed division and disarray the face of the threat to stable exchange rates. Throughout the world bankers and top executives passed a grim weekend trying to decide what to do next.

With international agreements once again being flouted, re. turn competitive exchange depreciation reminiscent of the 1930s seems to be on the cards. Countries like Tapan" and Germany fear an upward valuation of their currencies which would undermine their export trade by raising the prices their products in terms of other currencies.

The relentless laws of capitalism are closing in on the once booming Japanese economy.

Based upon a continuous growth of exports, a stream of credit has been pumped into industry by the banks to finance long term investment as well as =hort term needs. Dependent upon this bank credit rather than upon share capital, Japan's giant firms must sell abroad in order to pay interest on existing loans and raise new ones.

A further revaluation of the yen of the order of 10 per cent against the dollar which is now being spoken of, and the retaliatory measures against the Japanese export invasion which can be expected, could bring the whole credit pyramid crumbling down.

Holders of shares in Japanese firms would be the first to suffer, since with a fall in profits they would sink sharply in value. It was in anticipation of this that there was so much panic selling on the Tokyo stock exchange.

The Japanese economy is now the most vulnerable part of the capitalist world system. A panic on the Tokyo market will have immediate repercussions throughout the Pacific area, including Australia and the US West Coast. Japanese trade and investment in • Europe are also considerable.

The precarious situation of Japanese capitalism only displays, in an exaggerated form, what holds true for other countries in Europe as well as the United States.

ULAS NATIO THROW Gun battles before Provos' SPORADIC bombings and shootings continued in Ulster throughout yesterday as tonight's ceasefire deadline drew nearer.

In a furious gun battle in the Suffolk area of Belfast, ten civilians were reported hit. More than 500 shots were exchanged between 9.30 a.m. and 2.30 p.m.

Altogether several thousand Inflationary credit had been increasingly resorted to as the boom of the 1960s ran out. Barber's 'reflation' was part of this movement which has now paid off—in galloping inflation and the pricing of British exports OI T competitive markets making devaluation inevitable.

Capitalist governments and central bankers are aware that the system of which they are the custodians contains hidden explosive charges quite outside their control.

A mass of credit is held by offshore funds of the IOS variety which could swamp stock markets in the event of a panic.

The multi-national corporations throughout the world also hold large volumes of liquid capital which can be moved about from one country to another.

A large-scale selling of shares by these concerns could cause a stock market collapse and bank YOUNG SOCIALISTS shots have been exchanged since last Friday. The weekend death toll is six including three soldiers killed in the mine explosion.

Interviewed in the States, former Stormont premier Brian Faulkne ir said: 'At the moment there is a sense of relief that there is a prospect of peace failures in a number failures in a number of countries. In 1929, for instance, it was the In 1000 fan inatan. removal of American funds from the European stock markets which paralysed the whole credit structure and spread depression far and wide.

As confidence diminishes with each monetary crisis the volume of 'hot money' grows, thus making speculative movements more sudden and sharper in their effects, as has been shown in the past week.

Without exchange controls of a type which would drastically reduce foreign trade and investment, little or nothing can be done to prevent such movements which threaten to swamp the The very flimsiness of the credit system within countries and the large-scale financial operations conducted by doubtful firms based on such places as Nassau in the Bahamas adds to the tension.

It is a case where a small pebble could cause an avalanche.

inelr peace doubt as to whether it is an waelicr unconditional end to the violence.

'No one should be mistaken about this. If it is not an unconditional end to the violence, then the situation could be very much more serious in the future than it has been in the past.' THE POSITION still remains serious for our June Fund. At the moment our total stands at £846.82—a long way from raising our £1.750 taraet.

This month, it is more vital than ever that our Fund is raised. Workers Press will be decisive particularly in the coming week to explain the sterling crisis. It is the only daily paper to prepare the working class for the next round of Tory attacks that lie Therefore we appeal to every one of you, our readers.

We have always relied on you and you have never let down. These next five days will decide. Rally everyone you possibly can to change the state of our June Fund. Collect donations at work, where you live, from our supporters everywhere. If you can, add something extra yourself. Rush all these donations immediately Fund, 186a Clapham High Street, London, SW4 7UG 1111) indee shoppers stopped In eir tracks to watch the :ottish Region. Y$ set_off on • first leg of their Right-toork march to Glasgow : on Saturday For a fuller report see P.12 The Irish 'Sunday Press' revealed yesterday that Belfast Provisional leader Seamus Twomey was in touch with Ulster Secretary William Whitelaw and Tory Prime Minister 1 Edward Heath last Wednesday. The direct telephone contacts were set up by an 'as yet unidentified semi-public figure'.

AND THE TUC Press,