cfc_19330708.pdf

Volume 137

Theaninurci31

financiallirontrie

New York, Saturday, July 8 1933.

The Financial Situation'

T WAS a severe lecture which President Roost-velt delivered in his message on Monday to the

London Monetary and Economic Conference, and itwas nothing less than a lecture. Nor did Mr. Roose-velt express himself in diplomatic language. It wasevidently his desire to rebuke the nations which feltthat they could not yield ready acquiescence to hisattitude antagonistic to the early stabilization ofthe American dollar, and of the other leading Euro-pean currency units, and, accordingly, he did notchoose his words but proceeded without restraintto denounce what he considered their policy of oppo-sition and destruction. The result is most unfor-tunate. A feeling of deepest resentment has grownup against the United States and its policy, destroy-ing all chance of that co-operation among the nationsof the world which is so essential if there is to beeven a modicum of success.And the tone and character of the message have

wounded susceptibilities all the more because of thePresident's genial personality and the pains he tookto receive in most gracious fashion the distinguishedleaders of so many of the countries only a few weeksback, with the deep impression he then left upontheir minds that all controversies would be discussedin a most friendly and conciliatory manner. ThePresident has doubtless succeeded in making it plainthat he will not allow himself to be balked in any ofhis purposes, but all the evidences of fraternity andgood will have vanished, and the power to accom-plish any good correspondingly diminished.Whether the sessions are continued or not, thechances of reaching any accord, even in minor mat-ters, now that such a hostile atmosphere has beencreated, may well be doubted.Mr. Roosevelt begins by saying: "I would regard

it as a catastrophe, amounting to a world tragedy,if the great conference of nations, called to bringabout a more real and permanent financial stabilityand a greater prosperity to the masses of all na-tions, should, in advance of any serious effort toconsider these broader problems, allow itself to bediverted by the proposal of a purely artificial andtemporary experiment affecting the monetary ex-change of a few nations only." "Such action, suchdiversion," he went on to say, "shows a singularlack of proportion and a failure to remember thelarger purposes for which the Economic Conferenceoriginally was called together." This is plainlanguage, to be sure, but it is also harsh in tone andnot calculated to promote a spirit of harmony andgood will.But Mr. Roosevelt goes on with the same disre-

gard for diplomatic niceties. Continuing in simi-

Number 3550

lar strain, he indulges in some more of the samelanguage: "I do not relish the thought that insist-ence on such action should be made an excuse forcontinuance of the basic economic errors that under-lie so much of the present world-wide depression.The world will not long be lulled by the speciouspolicy of achieving a temporary and probably anartificial stability in foreign exchange on the partof a few large countries only. The sound internaleconomic system of a nation is a greater factor inits well being than the price of its currency in chang-ing terms of the currencies of other nations. It is forthis reason that reduced costs of government, ade-quate government income, and ability to service itsgovernment debts are all so important to ultimatestability."As if this were not enough of a charge of ignorance

and short-sightedness, the President goes on to say:"So, too, old fetishes of so-called international bank-ers are being replaced by efforts to plan nationalcurrencies with the objective of giving to those cur-rencies a continuing purchasing power which doesnot greatly vary in terms of the commodities andneed of modern civilization. Let me be frank insaying that the United States seeks the kind of adollar which a generation hence will have the samepurchasing power and debt-paying power as the dol-lar value we hope to attain in the near future. Thatobjective means more to the good of other nationsthan a fixed ratio for a month or two in terms ofthe pound or franc."Here we might inject the observation that if the

Administration expects in its process of stabiliza-tion to establish a dollar "which a generation hencewill have the same purchasing power and the debt-paying power" as the dollar it is proposed to estab-lish, the Administration is aiming at the impossible,since that would imply that supply and demand areno longer to play any part in governing commodityvalues.Mr. Roosevelt makes the present aim and policy of

the United States clear and emphatic when he windsup by saying: "Our broad purpose is permanentstabilization of every nation's currency (What agreat task r). Gold or gold and silver can well con-tinue to be a metallic reserve behind currencies, butthis is not the time to dissipate all reserves. Whenthe world works out concerted policies in the ma-jority of nations to produce balanced budgets andliving within their means, then we can properly dis-cuss a better distribution of the world's gold andsilver supply to act as the reserve base of nationalcurrencies. Restoration of world trade is an im-portant partner both in the means and in the result.

Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

184 Financial Chronicle July 8 1933Here also temporary exchange fixing is not the trueanswer. We must rather mitigate existing embar-goes to make easier the exchange of products ofwhich one nation has and the other nation has not.The Conference was called to better and perhaps tocure fundamental economic ills. It must not bediverted from that effort."It is plain from the foregoing that Mr. Roosevelt

means to insist on adherence to the present courseof this country, no matter what the consequencesto the gold bloc countries. And these consequencesmay be serious. Mr. Roosevelt rebukes the gold bloccountries for putting stabilization first, but the NewYork "Times," in an editorial article, asks the ques-tion, "Who put the questions of foreign exchangeand currency stabilization in the forefront of theprogram for the Conference?" It then answers thequery by saying: "President Roosevelt himself. Itwas the very first item on his list when he appealedto all governments on May 16 to help bring aboutconclusions at London 'quickly.' He then definitelydeclared 'the Conference must establish order inplace of the present chaos by a stabilization of cur-rencies.' It must naturally puzzle somewhat theuntutored minds of Europeans to find Mr. Rooseveltnow speaking of his own proposal, less than twomonths ago, as among 'the fetishes of so-called inter-national bankers.'"What the outcome is to be, as far as the Conference

itself is concerned, remains to be seen, and it reallyseems to be a matter of very little consequencewhether the Conference undertakes to maintain anominal existence by seeking to continue certainfunctions in order to give the semblance of life, orgives up the ghost altogether without any furtheradoall this is immaterial, since the usefulness ofthe Conference has been so seriously impaired by thebluntness with which the President assails hisopponents. London advices on Thursday stated thatwhat on its face appeared to be a great Americanvictory had been won at that day's meeting of the"bureau" of the Economic Conference in the de-cision "to continue the Conference at half speedwith the omission of monetary and tariff questions."Subcommittees are to meet to decide what subjectsthey can usefully proceed with, and they will reportto the bureau. There is also agreement with the goldcountries, we are told, that although other monetaryquestions are to be dropped for the time being, nego-tiations on silver are to go ahead. It was addedthat the gold countries had served notice that theywould not attend any monetary meeting and as-sumed no committees would be called under thisheading except those dealing with silver.The subcommittees on economic subjects were to

meet Friday and Saturday, and report to the bureauMonday. A subcommittee, it appears, has been setup to draft a resolution defining the work which theConference should carry on while waiting for clari-fication of the currency confusion. The AssociatedPress accounts said that the decision had come aftera furious battle, and must be considered a victoryfor Cordell Hull, American Secretary of State, who,on instructions from President Roosevelt, stoutly in-sisted that the conclave must continue its attemptto solve pressing world problems. The morning ses-sion of the Steering Committee, it is stated, lastedthree hours and a half, but was unable to arrive at adecision. The evening session, however, was com-

paratively brief, ending in triumph for the Americanposition.One of the main difficulties in the whole matter

appears to be that the United States does not under-stand or appreciate the position of the Europeancountries who feel such deep aversion to anythingin the nature of inflation by means of which the de-preciation of the American dollar is to be broughtabout. Thus, in certain quarters there is talk of adevalorization of the French franc, and it is urgentlyinsisted that France must be forced off the goldstandard in order that the devalorization may takeplace. People who talk thus forget that France hasalready had devalorization, and of the most pro-nounced type. Formerly the French franc wasworth close to 20c.; now, because of devalorizationin June 1928, it is worth less than 4c. when atpar. France has had its lesson of what inflationmeans, and its experience in that respect has beenof the bitterest kind. France has reduced its oldcurrency value to a greater extent than any othercountry excepting alone Germany. Why, then, askthat France should be forced off the gold standardin order that there may be further devalorization?There is nothing logical or reasonable in this.If France and the gold bloc countries want to re-

main on the gold standard, why should the UnitedStates raise any opposition tO their so doing? Thesimple truth is that these gold countries fear thatthe depreciation of the American dollar may go toextreme lengths, and knowing from bitter experi-ence what the consequences of inflation are, they aredetermined not to embark on a new policy of infla-tion which would surely involve a breakdown allaround, to the detriment of the whole world. Itmay well be questioned, too, whether the UnitedStates, with all its superb strength, can in a finan-cial matter like this really undertake to defy thewhole world. The question appears pertinent inview of the way the dollar has been slumping thepresent week, the pound sterling yesterday havingrisen to $4.75 and the French franc to 5.63c., onwhich basis the dollar is worth less than 70c.

THE authorities at Washington are very activelyat work putting into operation the National

Industrial Recovery Act. Representatives of all theleading industries are presenting codes for approvalof General Hugh S. Johnson, the newly

-appointedChairman of the Industrial Administrative Board.The Industrial Recovery Act is the measure whichPresident Roosevelt declared, when attaching hissignature, that history would probably record as themost important and far-reaching legislation everenacted by the American Congress. It certainlyprovides for Government regulation and control ofprivate business on a scale never before attemptednot even during the late war. Its goal is, accordingto the President, "the assurance of a reasonableprofit to industry and living wages for labor, withthe elimination of the tyrannical methods and prac-tices which have not only harassed honest business,but also contributed to the ills of labor." One thing,however, growing out of the existence of the new lawis not, we fear, receiving the attention and scrutinywhich are absolutely needed.The new Act suspends the operation of the Anti-

Trust Law, and, as a result, if current accounts areto be believed, profiteering is being indulged in in


Volume 137 Financial Chronicle 185numberless ways and to an extent that reallyamounts to actual oppression. Large dealers andsmall dealers alike appear to be engaged in the prac-tice, and the common thought seems to be how highprices can be carried. Both at wholesale and atretail, prices are marked up in accordance with thedictates of greed and avarice. Granting that pro-duction costs may be increased as a result of higherwages and higher raw material costs, the extra ex-pense is being added on at every stage of the processuntil the ultimate consumer is reached. The whole-saler allows for it, and a little more, at every stepin the manufacturing process, and the retailer isdoing the same thing as it passes through his hands.The result is that the price to the ultimate consumeris often doubled and trebled, especially in the case ofsmall articles. And the producers and manufac-turers are not waiting for the codes in their respec-tive industries to receive approval, but are actingand have acted to raise prices in advance, knowingthat the Anti-Trust Law has been suspended in itsoperation and that it will not be easy to bring anyaction of law against them.Any man who is obliged to make small purchases

in the course of his daily business will find thathe is obliged to pay a great deal more for what hewants and needs than before. Not only that, butif he undertakes to obtain prices for the future onhis large-scale operations, he will learn that no newprices are being quoted, and that what is vouchsafedis merely the one fact that the quotations will surelybe materially higher. In a general way, the replyreceived is that everything depends upon the sched-ule of prices that may be fixed during the processof co-ordination. In the meantime, however, pricesare being marked up in numerous ways in advanceof the formation and establishment of the generalschedules. Of course the Federal Government isendeavoring to correct practices of that kind, butonly a few cases come to its notice.In very flagrant cases the Federal investigator

is already making investigations, but where there isone case that will reach the Administrative Boardthere are a thousand others that will never comeunder its eye, as no complaints will be made be-cause of the trouble involved. The public prints lastweek mentioned a case where the price of milk hadbeen raised three cents a quart. Washington advicesthis week say that prosecution of persons profiteer-ing in bread will be inaugurated by the Departmentof Justice as soon as conclusive evidence of theaction is obtained. Attorney-General Cummings isquoted as saying that he was studying complaintsby Secretary Wallace that plans had been made tounduly increase prices. Bakers in some instanceshave said that the proposed wheat processing taxwas responsible for contemplated increases. Mr.Cummings promised action against profiteers if anywere found. Of course, wheat cases and milk casescome under different departments of the Govern-ment, and do not come under the jurisdiction ofthose administering the National Recovery Act.But cases of the kind mentioned go to show in howmany different ways the consumer is likely to sufferunless the Washington authorities pursue the utmostvigilance. Every producer ought to be obliged tofile schedules indicating the advances made, notonly as a result of the general code plans, but alsothe increases he has made in advance of the adoptionof the general code schedules.

The National Industrial Recovery Act is a mostremarkable piece of legislation. The subject is ablydiscussed in an article in this week's issue of the"New Outlook," by former Governor Alfred E.Smith. After pointing out that absolute individualinitiative and unhampered freedom of action by in-dividuals in the public utility field are things ofthe past, he goes on to observe that it is quite an-other matter, however, to set up Government controlof all business. He says he has never hesitated torecommend the extension of Government activity tomeet the needs of a growing population in an ageof industrial invention, "but this plan goes beyondanything my imagination can follow. I may be old-fashioned, but I can't understand how it can pos-sibly work."The first article of the National Industrial Re-

covery Act, which provides for the control of busi-ness, he contends, is largely the work of the newschool of social and economic planners. "The Actcontemplates agreements governing all branches ofindustry to regulate output, wages, standards andmanagement generally. It abrogates the ShermanAnti-Trust Law. It will permit any kind of com-binations and even the division of territory. In theabsence of agreements on the part of industrialgroups, the Administrator or Board designated bythe President will set up compulsory machinery.The Act is labeled as a temporary emergency meas-use so as to get it by the United States SupremeCourt. If its terms are carried out literally, thetendency will undoubtedly be to cripple initiative,legalize, and even officially encourage, monopoly,raise prices and require higher tariffs to maintainthe new structure. In such a triumph of bureau-cracy, the little man would be lost in the shuffle."No truer words were ever written. Ex-Governor

Smith then goes on to add with telling force: "Allthis is a long way from the traditional role of theDemocratic party, which has been since the days ofJefferson the party opposed to highly centralizedFederal control, the party of individualism, State'srights, and private initiative. Personally, I am infavor of applying the curb to industry where neces-sary, but not of placing the heavy, paralyzing handof the Government upon all the business enterpriseof the nation. I believe in good public administra-tion, but I know its limitations. I am in favor ofrestoring conditions which make business leader-ship possible, rather than of looking to the Govern-ment to provide it. It may be that we have reacheda new era in which the Government must run every-thing, but I hope not, because I do not want to seethis land of opportunity sink to a dead level inwhich we shall all be civil servants working underpolitical control. If that should happen, we shallhave sold our American birthright for a mess pfcommunistic pottage."

FEDERAL RESERVE operations in the purchaseof additional amounts of United States Gov-ernment securities from week to week have at lastbeen effective in bringing about an increase in thevolume of Reserve credit outstanding, and it willnow become incumbent to see that the process ofinflation is kept within bounds. Previously, theresult has been that though Reserve credit was beingemployed in the acquisition of additional amountsof United States securities, this was more than off-set by a diminution in the volume of Reserve credit


186 Financial Chronicle July 8 1933outstanding in other directions. More particularlythere has been a diminution in member bank borrow-ing at the Reserve institutions and a reduction inthe open market purchases of bankers' acceptances,which also constitute a form of member bank bor-rowing. On the present occasion, however, the fig-ures show that with the purchase of $20,046,000 ofadditional United States Government securities theamount of Reserve credit outstanding, as measuredby the total bill and security holdings, increasedfrom $2,177,227,000 to $2,202,442,000. Member bankborrowing, as reflected in the discount holdings ofthe 12 Reserve banks, did further decrease, the sameas in preceding weeks, dropping from $190,981,000to $181,803,000. Contrariwise, however, the accept-ances purchased in the open market ran up from$8,186,000 to $23,084,000, and the increase in thatitem, combined with the increase in the holdings ofUnited States Government securities, accounts forthe substantial increase that has occurred in theamount of the Reserve credit outstanding, as alreadyindicated. The New York Reserve Bank last weekreduced its buying rate for acceptances from 2% to1%, and this brought it a supply of bills.There has also been on the present occasion an in-

crease in the amount of Federal Reserve notes incirculation, after the long series of antecedent de-creases, the total rising from $3,061,324,000 to$3,115,331,000. Concurrently, there was also an in-crease from $120,081,000 to $124,012,000 in theamount of Federal Reserve ban?* notes in circula-tion. The Federal Reserve Bank reports a total in-crease in money in circulation for the week of noless than $77,000,000, and of this $57,938,000 is ac-counted for by the expansion in Federal Reservenote circulation and in Federal Reserve bank notecirculation. The expansion is no doubt explainedby the holiday demand for money in connection withobservance of the Fourth of July. Gold reserveswere further increased from $3,543,765,000 to$3,549,092,000. The reserve liability on account ofthe increase in Federal Reserve note circulation waslarger than the further increase in cash reserves,even though the liability on deposits was reducedowing to the falling off in such deposits from $2,509,-783,000 to $2,450,724,000. The result is that theratio of gold reserves and other cash to deposit andFederal Reserve note liabilities combined is slightlylower at 68.4% as against 68.8% last week. Theamount of United States securities held as part col-lateral for Federal Reserve notes outstanding in-creased during the week from $441,200,000 to $505,-700,000. Brokers' loans are now expanding as aresult of the increase in speculation on the StockExchange at rising prices, and this week these brok-ers' loans, as shown by the reporting member banksin the New York Federal Reserve District, rose from$764,000,000 to $858,000,000; this last compares withonly $333,000,000 twelve months ago, on July 6 1932.

THE stock market this week has manifested re-newed buoyancy, with further large and gen-eral advances in prices. Monday was a gala dayin that respect, prices swinging up in spectacularfashion, mainly as the result of the further deprecia-tion in the exchange value of the American dollar,due to the growing friction between the gold bloccountries and the United States on the point of theearly stabilization of the American dollar, theUnited States insisting that no early stabilization

should be attempted inasmuch as general commodityprice levels have not yet sufficiently advanced, whilethe gold standard countries insisted that there mustfirst be stabilization before the Monetary and Eco-nomic Conference shall take up the other problemsfor solution with which it is charged. The dollarslumped even worse than on previous occasions, theclosing gold value of the dollar at New York on thatday being 75c., with quotations at some banks aslow as 72c. Simultaneously, there were spectacularadvances in the grain and cotton markets, all thedifferent wheat options in Chicago selling above adollar a bushel and closing 31/2 to 4y2c. a bushelhigher for the day. Cotton at one time was up $2 abale, and closed about $1 a bale higher. On Tues- day, July 4, the stock markets in this country wereclosed in commemoration of Independence Day. Inthe European markets, however, the dollar furtherslumped badly in terms of both British sterling andthe French franc as a result of the blunt statementissued by President Roosevelt on Monday sayingthere would be no compromise on the question ofearly stabilization.On Wednesday the dollar suffered still another

bad break, but our stock market did not respond ason Monday, realizing sales on a large scale havingcaused a temporary setback. On Thursday, how-ever, the security markets resumed their upwardcourse, even though the foreign exchanges developeda greater steadiness. On Friday the dollar slumpedstill further, dropping to below 70c., and this gavea new impetus to the rise in stocks.Speaking generally, the influences which operated

to carry prices to new high levels were the sameas those of recent previous weeks. Trade reportsshowed that business activity and recovery were pro-ceeding in all lines of trade and industry, and thatcarloadings were now running far in excess of thecorresponding weeks in 1932, while the electric out-put for the week ending July 1 aggregated 1,655,-843,000 kilowatt hours as against only 1,456,961,000hours in the same week of 1932, showing an increaseof 13.7%, the largest yet recorded for any weekthus far. This was an indication not only that busi-ness activity was proceeding on an increasing scale,but it meant also that the growing activity in tradeinsured larger revenues to the roads, while at thesame time the returns coming in for the month ofMay in numerous instances registered very decidedimprovement in net even in the face, in some in-stances, of diminished gross revenues, carloadingsin that month not having been on the same ascend-ing scale as has now been proving the case for themonth of June. The iron and steel trade continuedto give a good account of itself, the steel mills ofthe country now being reported as engaged at 56%of capacity compared with 53% last week. The"Iron Age" also reported "that steel demand hasbeen steadily becoming more diversified. Althoughconsiderable recent buying of steel may have been forstocking purposes," the "Age" stated, "it was alsotrue that consumption was steadily gaining, in someinstances forcing buyers to make immediate use oftheir inventory material."

All the leading commodity markets show substan-tial gains for the week, the spot price for cotton hereat New York on Thursday having been marked upto 10.50c. and the price yesterday having been 10.30c.as against 10.15c. on Friday of last week. In thecase of grain, wheat at Chicago for the July option


Volume 137 Financial Chronicle 187closed yesterday at 9634c. against 903/4c. on Fridayof last week, and the September option at 9934c.against 931/2c. Domestic copper closed yesterdayat 9c. as against 8c. on Friday of last week. Theexchange value of the American dollar suffered fur-ther sharp depreciation during the week. Cabletransfers on London closed yesterday at $4.67against $4.277/8 on Friday of last week. Cabletransfers on Paris closed at 5.53c. against 4.941/2c.on Friday of last -week. Silver in London continuedto move within narrow limits, the London priceyesterday being 18 5/16 pence per ounce as against185/8 pence on Friday of last week. The spot pricefor crude rubber here in New York closed yesterdayat 7.62c. against 6.32c. on Friday of last week. Thebond market continued its spectacular rise, espe-cially in the case of the low-priced issues, whichmoved up with great rapidity on' the improved in-come prospects of the properties. Of the stocks dealtin on the New York Stock Exchange, 495 establishednew high records for the year during the week, whilethere were no new lows for the year. In the case ofthe New York Curb Exchange the record is 190 newhighs and six new lows. Call loans on the New YorkStock Exchange again continued unaltered at 1%throughout the week.Trading has again been large. On the New York

Stock Exchange the sales at the half-day session onSaturday last were 2,791,230 shares; on Mondaythey were 6,715,170 shares; Tuesday was Independ-ence Day and a holiday; on Wednesday the saleswere 5,802,400 shares; on Thursday 6,541,910 shares,and on Friday 6,972,880 shares. On the New YorkCurb Exchange the sales on Saturday last were332,680 shares; on Monday 706,593 shares; onWednesday 645,490 shares; on Thursday 802,214shares., and on FridaY 1,023,499 shares.As compared with Friday of last week prices are

quite generally higher. General Electric closed yester-day at 293/8

against 24 on Friday of last week; NorthAmerican at 3432 against 32; Standard Gas & Elec.at 20%3 agaist 183/8; Consolidated Gas of N. Y. at601% against 57; Pacific Gas & Electric at 30%against 281%; Columbia Gas & Elec. at 26%3 against23%; Electric Power & Light at 13% against 12;Public Service of N. J. at 5334 against 5234; Inter-national Harvester at 44 against 4034; J. I. CaseThreshing Machine at 97 against 883/2; Sears, Roe-buck & Co. at 4434 against 391%; MontgomeryWard & Co. at 281% against 253/2; Woolworth at 49against 46; Safeway Stores at 55% against 55;Western Union Telegraph at 6234 against 5534;American Tel. & Tel. at 1323/2 against 1273/8; Brook-lyn Union Gas at 8334 against 81; American Can at953/i against 90%; Commercial Solvents at 28%against 291%; Shattuck & Co. at 121% against 11, andCorn Products at 81 against 763/2.

Allied Chemical & Dye closed yesterday at 13134,against 1151% on Friday of last week; Associated DryGoods at 143%, against 153/2; E. I. du Pontde Nemours at 823/8, against 789; National CashRegister A at 21, against 2114; International Nickelat 19 8, against 18%; Timken Roller Bearing at341%, against 31; Johns-Manville at 563/2, against 51;Gillette Safety Razor at 171%, against 1434; NationalDairy Products at 24, against 233/2; Texas GulfSulphur at 333%, against 313/2; American & ForeignPower at 18, against 16%; Freeport-Texas at 38%,against 361/8; United Gas Improvement at 233/s,against 22; National Biscuit at 58, against 57%;

Coca-Cola at 10134, against 9534; Continental Canat 639, against 6134; Eastman Kodak at 84, against8234; Gold Dust Corp. at 25%3, against 23%; Stand-ard Brands at 271%, against 2734; Paramount PublixCorp. ctfs. at 234, against 11/8; Westinghouse Elec. &Mfg. at 55%, against 4614; Drug, Inc., at 5434,against 60; Columbian Carbon at 67, against 62;Reynolds Tobacco class B at 49%, against 451%;Lorillard at 2434, against 22; Liggett & Myersclass B at 9534, against 9334, and Yellow Truck &Coach at 71%, against 614.

Stocks allied to or connected with the brewingindustry have moved irregularly this week. CanadaDry closed yesterday at 245%, against 25% on Fridayof last week; Crown Cork & Seal at 59, against 6034;Liquid Carbonic at 3814, against 38;. Mengel Co.at 1234, against 111%; National Distillers at 1021%,against 97; Owens Glass at 87, against 8434, andIT. S. Industrial Alcohol at 69, against 601%.The steel stocks have been foremost in their

strength. United States Steel closed yesterday at 66against 58 on Friday of last week; United States Steelpref. at 1031% against 9734; Bethelehem Steel at485% against 4134, and Vanadium at 283' against2534. In the auto group, Auburn Auto closed yes-terday at 671% against 635% on Friday of last week,General Motors at 3334 against 29%, Chrysler at375% against 35, Nash Motors at 243% against 2034,Packard Motors at 6 against 51%, Hupp Motors at61% against 614, and Hudson Motor Car at 151%against 11%. In the rubber group, Goodyear Tire& Rubber closed yesterday at 3934 against 36% onFriday of last week, B. F. Goodrich at 171% against15%, and United States Rubber at 15%3 against 1334.The railroad shares in their strength surpassed

all others. Pennsylvania RR. closed yesterday at4034 against 32% on Friday of last week, AtchisonTopeka & Santa Fe at 7834 aagainst 6734, AtlanticCoast Line at 56 against 4734, Chicago Rock Island& Pacific at 934 against 7%, New York Central at571% against 43, Baltimore & Ohio at 365% against271%, New Haven at 325% against 293%, UnionPacific at 1281% against 117%, Missouri Pacific at934 against 534, Southern Pacific at 371% against3134, Missouri-Kansas-Texas at 163% against 1434,Southern Ry. at 3034 against 253%, Chesapeake &Ohio at 465% against 415%, Northern Pacific at 34%against 24%, and Great Northern at 33 against 25.The oil stocks continued to rise on the good out-

look for the oil trade. Standard Oil of N. J. closedyesterday at 39% against 3734 on Friday of lastweek, Standard Oil of Calif. at 3934 against 363%,Atlantic Refining at 3034 against 28%, and TexasGulf Sulphur at 338% against 3134. In the coppergroup, Anaconda Copper closed yesterday at 201%against 16% on Friday of last week, KennecottCopper at 245% against 201%, American Smelting &Refining at 37% against 34, Phelps-Dodge at 1634against 1334, Cerro de Pasco Copper at 29 against24%, and Calumet & Hecla at 834 against 7.

PRICE trends on stock exchanges in the leadingEuropean financial centers were generally up-ward this week, notwithstanding a little irregularityin all markets. Traders and investors in London,Paris and Berlin paid less attention to the WorldMonetary and Economic Conference, and more tothe growing signs of recovery from the depression,reports said. Much significance was attached to thepronounced strength of the American securities mar-


188 Financial Chronicle July 8 1933kets, which was reflected in the international sec-tions of the London and Paris exchanges. Evenmore impressive, however, were distinct signs oftrade improvement in all the leading industrialcountries of Europe, whether on or off the goldstandard. The fact that production is advancingand unemployment is decreasing in France and Ger-many, as well as in England, gives assurance that therecovery is not due merely to monetary manipula-tion but to other and more fundamental influences,and a corresponding optimism is beginning to pre-vail throughout Europe. The steady and consistentimprovement is at last affecting all the importanttrades, and government revenues also are beginningto mount.The London Stock Exchange was cheerful and

active in the opening session of the week. Britishfunds were slightly lower, but all other sectionsshowed good advances. Industrial stocks wereespecially active, with speculative influences an im-portant factor, while home rail stocks also reflecteda lively demand. Anglo-American favorites movedup despite a fall in the dollar quotation. Businessimproved further in Tuesday's session, and a num-ber of notable advances occurred in various sectionsof the list. British funds remained dull, but indus-trial stocks enjoyed a small boom and home railwayissues also continued their advance. The interna-tional section was relatively quiet, owing to the holi-day in New York. In Wednesday's dealings thesemain trends were continued. British funds wereneglected, but strong buying lifted the quotationsfor industrial securities and home rail stocks, whileinternational issues also were firm. The tendency,Thursday, was somewhat more irregular, partly be-cause of end-of-account profit-taking. British fundswere steady, but small losses appeared in industrialstocks. The selling was well absorbed, however, andthe undertone was firm. Home rail stocks receivedexcellent support on good traffic returns. Interna-tional securities weakened slightly. After early un-certainty yesterday, industrial stocks resumed theiradvance. British funds were quiet.The Paris Bourse was affected somewhat by fears

of inflation early in the week. Industrial and bankstocks were in keen demand in the initial session,and prices advanced sensationally in some instances,but rentes were weak. It was noted in reports thatthe market was very thin and that prices advancedeasily. Trading was extremely active, Tuesday, withmuch the same tendencies apparent. Stocks surgedahead, with speculative issues in greatest demand,while rentes drifted slowly lower. Profit-taking de-veloped Wednesday, and put a damper on the swiftrise in the quotations for stocks. Small net gainswere reported, however, in a majority of issues.Rentes again receded. Trading was quieter, Thurs-day, with liquidation more pronounced. Stockswere heavy, with the losses important in many issues,but rentes gained as the funds apparently wereplaced in these fixed-income obligations. Pricechanges were small yesterday in an irregular sessionon the Bourse.The Berlin Boerse was uncertain as business

started, Monday, with most stocks and all bondssharply lower. There were a few advances in issuesthat are expected to benefit from the Government'sconstruction program for the alleviation of unem-ployment, but the international currency difficul-ties weighed heavily on the market and declines were

the rule. The opening Tuesday was again weak, formuch the same reasons, but a better tendency set intoward the close and a part of the initial drop wascanceled. The Boerse remained sluggish, Wednes-day, but a better tendency prevailed in fixed-interestsecurities. Apprehension regarding inflation inGermany were less pronounced, and a steady buyingmovement appeared in bonds, but stocks receded.The tendency was irregular, Thursday, but the un-dertone was better. Bond quotations were sharplyhigher, while stocks manifested more resistanceto the decline, with net changes small in thisdivision.

/V ALREADY noted in previous comments inthis issue, the World Monetary and EconomicConference at London was in a state of continuoustension during most of the current week, with ad-journment steadily under consideration, owing tothe sharp refusal of President Roosevelt, Monday,to commit the United States Government to cur-rency stabilization at this time. Even though theAmerican attitude against immediate stabilizationof the dollar in relation to other currencies had beenpreviously made plain, President Roosevelt's curtstatement had all the effect of a bombshell in thegathering, because of its tone and character, asalready indicated. So severe was the reaction thatthe message was followed, two days later, by a milderand more persuasive account of American views onstabilization, presented through the United Statesdelegation in London. Currency stabilization waseffectually ruled out of immediate consideration atthe Conference by these moves, with sharply adverseeffects on the American dollar in the foreign ex-change market. Profound disappointment was feltby the delegates of the European "gold bloc" coun-tries, which include chiefly France, Belgium, Hol-land, Switzerland and Italy, and a protracted debateon adjournment developed Thursday in the bureau,or "steering committee" of the Conference. Not-withstanding the deep gloom which prevailed inLondon, it finally was decided to keep the Confer-ence in session for the discussion of economic ques-tions, with tariffs ruled out.The Conference struck the stabilization snag im-

mediately after it was convened on June 12, and thedelegates of the gold bloc countries did not allowthe currency problem to drop into the backgroundfor a moment. The American stand on the matterwas made very clear in several statements issued atLondon, after due consultation with Washington.Great Britain preferred to adopt a neutral attitudein the dispute, siding neither with the United Statesin favor of continued instability, nor with the goldcountries in favor of immediate anchoring of thefluctuating units. After the arrival of AssistantSecretary of State Moley in London, last week, theefforts to achieve some sort of agreement on cur-rency stabilization were redoubled by the gold coun-try delegations, and it seemed for a time thatarrangements would be made for control of thewilder speculative fluctuations of unstable curren-cies through concerted action by the central banksand banks of issue in the nations concerned.Toward the end of last week it was indicated that

experts of the United States, Great Britain, France,Italy, Holland, Belgium and Switzerland had drawnup a tentative agreement for the control of suchspeculative fluctuations, and that it had been sub-


Volume 137 Financial Chronicle 189mitted for the approval of President Roosevelt withearnest recommendations by some of the Americanleaders in London for its acceptance. Last Satur-day, however, a statement was issued by the UnitedStates delegation in London, declaring that Presi-dent Roosevelt had rejected the joint proposal in itscurrent form, and adding that a further statementwould be made Monday elaborating the UnitedStates policy in the monetary field.The text of the proposed declaration, published

last Saturday, called for agreement that stabilityin the international monetary field should be ob-tained as quickly as practicable. It held, further,that re-establishment of gold as a measure of inter-national exchange value should be accomplishedwith recognition that the time at which each of thecountries off gold should undertake stabilizationand the time at which parity is established must bedetermined by the respective governments. The in-tent of the gold standard countries to maintain thatstandard without further impairment was expressedin the declaration, and it was asserted that goVern-ments of countries not on the gold basis "take noteof the above declaration and recognize its impor-tance without in any way prejudicing their ownfuture ratios to gold, and reiterate that the ultimateobjective of their currency policy is to bring backan international standard based on gold underproper conditions." Each Government whose cur-rency is not on the gold standard agreed to adoptsuch measures as it might deem most effective tolimit exchange speculations, and that other signa-.tory governments undertake co-operation to thesame end, the declaration continued. The signatorygovernments were to agree, moreover, to ask theircentral banks to work together in limiting specula-tion and, at the proper time, reinaugurate an inter-national gold standard.The announcement by Secretary Hull last Satur-

day that this agreement was not acceptable to theWashington Administration "in its present form"rudely shattered the hopes that some "truce" couldbe arranged on temporary stabilization, and the Con-ference thus permitted to discuss other problems.Far more drastic, however, was the message whichPresident Roosevelt sent to the gathering on Mon-day, the provisions of which have already beendiscussed in the earlier portion of this article.

REACTIONS to this communication from Presi-dent Roosevelt among the 66 delegationsassembled at London ranged from bewilderment toscornful anger. "Another American schoolmaster,"was the scornful and general comment, accordingto one report. The tone of the message was vari-ously interpreted as "pedagogic," "lecturing" and"pulpit preaching," and was said to have causedmore annoyance than its actual content. "The pass-age in the message which has been generally acceptedon this side of the ocean as a laudation of managedcurrency drove the final nail in the coffin of thehopes of the gold nations, for it convinced themthat President Roosevelt differed from them notonly on details and on procedure, but also in funda-mental conception of monetary policy," a dispatchto the Associated Press said. The message was re-garded as staggering in its implications. The goldbloc countries considered that Mr. Roosevelt hadissued a grave challenge to all they stand for in theway of monetary policy, and an uneasy apprehension

prevailed that the United States had underminedthe gold standard everywhere. The first impulsethroughout the Conference was for adjournment, atleast until the smoke of the currency stabilizationbattle had cleared away, and even the United Statesdelegation was said to feel adjournment advisable.It was made known that Premier Colijn of Hollandwould move for adjournment in a meeting of theSteering Committee Tuesday, with a final plenarysession to be held Thursday in order to ratify thisaim. But pressure for continuing promptly wasapplied, first by the American delegates under in-structions from President Roosevelt, and then by theBritish, and this view ultimately prevailed.The. gold standard countries, with a few rather

anomalous additions, hastily organized for the de-fense of their position, when the American rejectionof the proposal for curbing speculative currencyfluctuations was received. A declaration was drawnup and signed by representatives of France, Holland,Italy, Poland, Switzerland and Belgium, last Mon-day. These governments, it read, "convinced thatmaintenance of their currencies is essential to theeconomic and financial restoration of the world, forthe return of credit and for the safeguarding ofsocial progress already accomplished, confirm theirformal will to maintain the free functioning of thegold standard in their respective countries at thepresent gold parities and within the framework ofexisting monetary law, and ask their central banksto remain in close contact in order to give this dec-laration the maximum effect." Czechoslovakia washastily added to the signatories, Wednesday, afterserious runs had developed on banks in that countrybecause of an impression that the lack of a Czecho-slovakian signature meant virtual abandonment ofthe gold standard by the country. The runs werebrought under control soon after the announcementthat the Prague Government had aligned itself withthe gold group.The fight to keep the Conference going was

speedily organized by Secretary of State CordellHull, after receipt of a message urging this coursefrom President Roosevelt in the early hours of Tues-day. "The President's cable to Secretary Hull wassent very soon after receipt of an urgent messagefrom the Chairman of the American delegation, out-lining the desperate status of the parley and askingnew instructions," a Washington dispatch to theNew York "Times" said. The time factor favoredthe American contentions that much useful work canstill be done by the gatherings

London reports indi-cated. "Sober second thought has succeeded the dis-appointment and anger over the tone and substanceof the President's message," a dispatch of Tuesdayto the New York "Times" remarked. "Confrontedwith the consequences that may follow adjournmentand the inevitable public reaction if the Conferencethrows up the sponge, few delegations wish to takethe risk of incurring them," the report added. TheSteering Committee of the Conference decided afterlong deliberations, Tuesday, to wait until Thursdaybefore making a final decision on adjournment. Animportant factor in this decision was the attitudeof the British delegation, it is said. The Dominionswere especially anxious to avoid a breakdown, andthe London Government concurred in these views,with the result that the whole weight of Anglo-Saxonopinion was thrown against the proposal for ad,journment.


which the Government and people of the UnitedStates cannot be diverted." In order to make thisperfectly clear, it was reiterated that Americans areinterested in American commodity prices. "Whatis to be the value of the dollar in terms of foreigncurrencies is not and cannot be our immediate con-cern," the statement continued. "The exchangevalue of the dollar will ultimately depend upon thesuccess of other nations in raising the prices oftheir own commodities in terms of their national cur-rency, and cannot be determined in advance of ourknowledge of that fact. There is nothing in ourpolicy inimical to the interests of any other country,and we are confident that no other country wouldseek to embarrass us in the attainment of the eco-nomic ends required for our economic health."It was pointed out in the statement that the de-

preciation and ultimate devaluation of the curren-cies of France, Italy and Belgium in the post-waryears occasioned no criticism from the UnitedStates, while the drop from the gold standard byGreat Britain and the Scandinavian countries inrecent years was met by sympathetic understandinghere. Great Britain has been off the gold standardnearly 1% years, while the United States has beenoff less than three months, it was added. Neverthe-less, the statement said, the United States Govern-ment gladly associates itself with a statement ofBritish policy, made in behalf of the Chancellor ofthe Exchequer in the House of Commons, July 4,favoring return to the gold standard as the ultimateobjective, while reserving complete liberty of actionas regards the time and parity of any such return."If there are countries where prices and costs arealready in actual equilibrium we do not regard it tobe the task of the Conference, as it certainly is notthe purpose of the American Government, to per-suade or compel them to pursue policies contrary totheir own conception of their own interests," it wasstated. In order to 'escape from present evils andavoid their repetition in the future, the first taskis to restore prices to a level at which industry and,above all, agriculture, can function profitably andefficiently, while the second task is to preserve thestability of this adjustment, once achieved, the Con-ference was reminded. The part which gold andsilver should play after adjustment has been securedwould seem a further subject suitable for considera-tion by the Conference. Finally, the need for ex-ploration of the pressing problems confronting thegathering was held to be as great as when the Con-ference met, and the advisability of further discus-sion was urged.

Q ---.----

UITE as important as the statement issued inLondon were indications in Washington that

President Roosevelt was preparing to embark on aplan for a managed American currency based on the

190 Financial Chronicle July 8 1933After much intercommunication between Wash- 1924-1925 commodity price levels. This and other

ington and the American delegation at London, a aims of the Administration might not be realized forstatement was issued by Secretary of State Hull in two or three years, and an international stabiliza-London, Wednesday, concerning the stand of the tion treaty may not be possible in the interim, it wasUnited States in connection with the Conference. maintained. "The President indicated," a dispatchThis statement was viewed in the British capital as to the New York "Times" said, "that foreign coun-an attempt to moderate the harshness of the mes- tries and the United States differed as to how goldsage published Monday, and to explain and justify should be used. Many foreign countries at the Lon-the American attitude toward stabilization. After don Conference urged that it should be used as abriefly summarizing the previous message, the state- medium of international exchange, while the Unitedment indicated that "revaluation of the dollar in States holds that it should continue as a collateralterms of American commodities is an end from behind paper currency." The Administration also

was represented as believing that no feasible planhad been advanced at London for stabilization ofworld currencies. It was held that Federal Reservebanks cannot enter the market and buy dollars toprevent wide fluctuation. Under the law they can-not speculate in foreign exchange because they arecustodians of the reserves of the member banks ofthe System, it was pointed out.When the question of adjournment came up for

discussion in the meeting of the Steering Committeeof the Conference at London, Thursday morning,earnest efforts to keep the gathering in session againwere made by American representatives and leadersof the British Dominions. In this they were success-ful, but in order to meet some of the delicate require-ments of the situation it was agreed to restrict thediscussions. The gold standard countries foundthemselves obliged to declare that for the time beingthey could not take part in any monetary discus-sions, obviously because any such conversationsmight lead their countrymen to the conclusion thatlapses from the gold standard might occur. Thevarious subcommittees of the Conference were re-quested to meet as soon as possible to draw up alist of questions which can be usefully studied in thecircumstances as they have developed. Althoughthe text of the Steering Committee's resolution con-tains no reference to tariffs, it was reported that dis-cussion of tariffs and quotas had been ruled out onthe insistence of the gold standard countries, whichmaintained that any agreement would be impossibleuntil currency stabilization had been achieved. Indeciding to continue, the Steering Committee wasinfluenced by an emotional plea by Secretary ofState Hull, dispatches said. Representatives ofGreat Britain, the Dominions, Japan and the Scandi-navian countries also urged further sessions. Fi-nance Ministers Bonnet of France and Jung of Italyargued for adjournment, since the basis of the Con-ference had been entirely changed by recent develop-ments in the United States. Neville Chamberlain,Chancellor of the British Exchequer, urged a com-promise and suggested continued discussions on themany problems facing the gathering.Although the arrangement for continuance was

considered a victory for the American group, therewas not much expectation in London that any sub-stantial results now can be attained at the Confer-ence. "Faithful to the last to Conference technique,the delegates avoided giving the parley a clean-cutend, and arranged instead for its demise throughthe slow process of lack of nourishment," a Londondispatch to the New York "Herald Tribune" re-marked. There were predictions by a few moreoptimistic observers that the gold bloc countriesmight back down and eventually discuss monetaryand other questions. But on the other hand, Fi-nance Minister Georges Bonnet announced that he


Volume 137 Financial Chronicle 191was returning to Paris, next Monday, and he indi-cated that the other important members of theFrench delegation Would follow him soon.There were indications yesterday that the gold

standard countries intend to fight with intenseenergy against any impairment of their position.It was indicated in London that the Governors ofcentral banks in six gold standard countries wouldmeet in Paris, to-day, to work out a plan for co-operation in remaining on gold. The "gold standardcountries" named are France, Italy, Belgium, Hol-land, Switzerland and Poland, although the appela-tion clearly does not fit all of them. Some dis-patches state that Czechoslovakia also will be amember of this bloc. A gold-bloc customs union wasreported in a London dispatch to the AssociatedPress to be under consideration as one means to beemployed in the fight against inflation. The Parismeeting to-day will be attended by Leon Fraser,President of the Bank for International Settle-ments, and the facilities of the bank probably willbe placed at the disposal of the gold standard coun-tries, since its statutes require it to promote theestablishment and maintenance of the gold standardeverywhere.

TO THE series of modifications of the Germanmoratorium decree of June 9, covering pay-ments in foreign currencies on the external debts ofGerman borrowers, has been added a further "con-cession," announced on June 30, just before thedecree became effective. After a protracted meetingwith the German Cabinet, it was indicated by Dr.Hjalmar Schacht, President of the Reichsbank, thatpayment in foreign currencies will be permitted dur-ing the final six months of this year to the extent of50% of interest or dividends due on long-term in-debtedness or on stocks. The maximum paymentin that fashion in the period will be 4% interestor dividends, which means, a dispatch to theNew York "Times" remarks, that Reichsbankshareholders will obtain transfer of only 331/3%instead of 50% of the bank's 12% dividend.The 4% limitation will not occasion any reduc-tion in the transfer of bond interest, it is noted.Dr. Schacht reaffirmed, at the same time, that theDawes 7% loan of the German Government will befully exempt from the moratorium, while the YoungPlan 51/2% international loan will be exempt so faras interest is concerned. These arrangements sup-plement the agreement made early last week, where-under full transfer of interest on short-term loansunder the standstill pact will be permitted.In announcing the latest modification, Dr.

Schacht remarked that the Reichsbank "proceedswith this regulation on the essential presuppositionsthat the normal development of Germany's foreigntrade will not be interrupted from any side becauseof the execution of the projected regulation, andthat the early resumption of full transfer is whollydependent on the development of Germany's ex-ports." Such international payments, he warned,can be made in the end only through the movementof goods or through services. Amounts paid by Ger-man creditors, but not transferred, will be kept inmarks in the conversion fund, which the Reichsbankwill administer, but distinctions will be made be-tween the various kinds of payments. To cover theuntransferred interest and dividend payments, therewill be placed at the disposal of creditors negotiable

bills in amounts of 30, 40 and 50 marks, or multi-ples thereof. Untransf erred amortization pay-ments, on the other hand, will be held in the con-version fund for the credit of bondholders. Regu-lations providing for the possible use of the lattersums will be issued soon, it is remarked.Dr. Schacht received foreign newspaper corre-

spondents last Saturday, to explain the necessityfor the moratorium decree which was made effectivethat day. Germany had made extraordinary effortsto be fair to her creditors, the Reichsbank Presidentsaid, but the outside world had forced the Reichto take her future into her own hands. In a dispatchto the New York "Times" it was noted that he placedthe blame for the moratorium decree on the failureof the London Monetary and Economic Conferenceto deal with the debt problem, and on the "delib-erate currency deprecation by Britons, Scandina-vians and Americans." Germany is determined tomaintain her currency at the gold parity rate, hereiterated. It was also emphasized that the modi-fications of the transfer moratorium were for sixmonths only. "If German exports do not obtainfreer markets than heretofore, payment of Ger-many's private debts will become wholly impos-sible," Dr. Schacht continued. "Germany's greatindebtedness is, first of all, a consequence of thesenseless and vicious tribute policy which attemptedto shift Germany's political debts onto the shouldersof private debtors. The Young loan is a typical ex-ample. It is nothing more than an experiment incollecting impossible tribute with the money of pri-vate foreign investors. Now the depreciation of for-eign currencies has further strangled Germany's ex-ports, with which alone Germany can pay her debts."

ONE of the most pronounced changes in Americanforeign policy in recent years is implied inthe decision, announced at Washington last Sun-day, to finance, through the Reconstruction FinanceCorporation, the sale of 60,000 to 80,000 bales ofcotton to an official agency of the Russian SovietGovernment, for shipment to that country. Thistransaction is expected to involve about $4,000,000,which will be advanced to American exporters of thestaple in the form of loans for one year, bearinginterest at 5%. Such loans will be secured by notesof the Amtorg Trading Corporation, which is ownedby the Soviet Government, and the notes will beguaranteed unconditionally by the State Bank ofthe Soviet Union. The Russian Corporation willpay 30% of the purchase price in cash at time ofshipment, which is to take place promptly. Underthe terms of the loan the cotton purchases are tobe made in the open market and not from any hold-ings of United States Government agencies. JesseH. Jones, Chairman of the R. F. C., announced thearrangement after receipt of Associated Press dis-patches from London, to the effect that a plan forselling American cotton to Russia was under con-sideration by Assistant Secretary of State RaymondMoley, and Maxim Litvinoff, Foreign Commissar ofthe Soviet Union. The loans had been approved byPresident Roosevelt and Secretary of the TreasuryWoodin, Mr. Jones stated.In confirming this arrangement, Mr. Jones empha-

sized that the transaction did not involve recog-nition by the United States of the Soviet Govern-ment. Mr. Moley, in London, also denied that itimplied recognition. That subject is political, Mr.


192 Financial Chronicle July 8 1933Moley said, and he denied having authority to dis-cuss it.The loan by the R. F. C. to finance the sale of

American cotton to Russia was under considerationfor about a month, the question first coming upearly in June immediately after a $50,000,000 loanto the Nanking Nationalist Government of Chinawas announced by the R. F. C. officials, to covercotton shipments to that country. A. Rosensheim,New York representative of the Amtorg TradingCorporation, suggested the loan to finance cottonshipments to Russia, with the idea of developing a"very considerable trade." After studying the mat-ter and conferring with President Roosevelt andSecretary Woodin, the R. F. C. directors indicatedtheir willingness to make the advances. It wasnoted in Washington press dispatches that theSoviet Government has scrupulously met all itsforeign engagements since 1919, and is one of thevery few governments in the world to have done so.In a Washington report of Monday to the New

York "Times" it was remarked that seasoned ob-servers within the Government attach much sig-nificance to the terms of the financing arrangedby the R. F. C., and accepted by the Amtorg Trad-ing Corporation. As against the initial payment of30% and completion of the transaction in a year,it was recalled that in most Soviet purchases fromforeign countries little or nothing is offered in downpayment, with three years usually requested formeeting the sum in full. "The conclusion of severalauthorities on this point is that considerations of apolitical nature must be a factor in Russia's willing-ness to comply with the American terms," the dis-patch added. One point, reported in this dispatch,is that the American exporters will be required toguarantee repayment of the loans by the R. F. C.to the extent of 25%. In a supplementary state-ment, Monday, Mr. Jones indicated that any Amer-ican exporter with resources and standing satisfac-tory to the R. F. C. will be entitled to the loans. Itwas suggested in some accounts that further loanswill be arranged to finance the sale of Americanagricultural machinery and other products toRussia.

ERMINATION of the trade conflict betweenGreat Britain and Soviet Russia was an-

nounced in the capitals of the two countries, lastSaturday, after a series of conferences in Londonbetween the British Foreign Secretary, Sir JohnSimon, and Foreign Commissar Maxim Litvinoff,of Russia. The embargoes placed by both countrieson imports from the other were promptly revoked,and negotiations were resumed for a new Anglo-Russian commercial treaty. Concurrently with thisannouncement, and obviously as part of the arrange-ment, the two British engineers who were impris-oned for sabotage by a Moscow court in April werereleased and given permission to return to England.The announcements that normal trade relations be-tween the two countries had been restored werebrief. In London dispatches it was indicated, how-ever, that the official conferences between Sir JohnSimon and M. Litvinoff were concerned chiefly withthe finding of a "face-saving formula" satisfactoryto both Governments. It was noted in Moscow re-ports that W. H. Thornton and W. L. MacDonald,the two engineers, were released a few hours afterthe embargoes were ended. But in London it was

indicated that M. Litvinoff first had notified theBritish Foreign Secretary that the appeals of theengineers for commutation of the.sentences had beengranted by the Executive Committee of the Soviets.The two Britons arrived in London, Wednesday,where they were wildly cheered by a huge crowdassembled at the railway station. The embargoes,which were terminated on July 1, were applied onApril 26 by the British Government on 80% of theimports from Russia, and on the following day bythe Russian Government, which retaliated with acomplete embargo on imports from Great Britain.

Relations of the Soviet Government with othercountries also are improving rapidly. We havealready noted the arrangement for financing ofAmerican cotton sales to Russia by an officialagency of the United States Government. In Lon-don, meanwhile, Foreign Commissar Litvinoff hastaken advantage of the presence of numerous offi-cials of all countries by negotiating a series of non-aggression treaties with most of the important neigh-boring States of Russia. Agreements were signedby M. Litvinoff, Monday, with plenipotentiaries ofPoland, Rumania, Latvia, Estonia, Turkey, Persiaand Afghanistan, providing that no excuse of apolitical, military or economic nature shall justifyaggression between the signatories, as defined veryclosely and clearly in the Politis report to the Secur-ity Committee of the General Disarmament Con-ference. On the following day similar conventionswere signed with Czechoslovakia and Jugoslavia,while another was signed Wednesday with Lithu-ania. The pact with Rumania was regarded ashighly important throughout Europe, as it is be-lieved to indicate the end of the long dispute betweenRussia and Rumania regarding the sovereignty ofBessarabia, which was carved out of Russia in the1919 peace settlement and awarded to Rumania.The series of arrangements effected in London occa-sioned the comment in an Associated Press dispatchof July 4 that H. Litvinoff, alone among the states-men assembled at London, had obtained some-thing concrete out of the meetings in the Britishcapital.

Negotiations between the Governments of SovietRussia and the Japanese puppet State of Manchukuowere instituted at Tokio, last week, for the sale toManchukuo of Russian interests in the ChineseEastern Railway, which runs across Manchuria fornearly 1,000 miles. The Japanese ostensibly are act-ing in an advisory capacity in these negotiations,but in view of their absolute control of their creaturein Manchuria, the discussions are regarded as vir-tually direct between Russia and Japan. Sovietdelegates at this conference submitted a memoran-dum, Monday, which called for transfer of owner-ship of the railway proper and all timber and otherconcessions for a consideration of 250,000,000 goldrubles, or about $132,600,000. Spokesmen of theManchukuan Government countered with an offerof 50,000,000 Japanese yen ($13,500,000 at the preva-lent exchange rate) for the entire property. Despitethe great disparity, neutral observers in Tokio weresaid to believe that a compromise would be reachedin long-drawn bargaining between the officials.Any arrangement for sale of the railway would sig-nify an adjustment of one of the most delicate prob-lems of the Far East, and one which has disturbedRussian relations with Japan and China on numer-ous occasions in recent years.


Volume 137 Financial Chronicle 193

WITHDRAWAL of the United States from theInternational Convention for the Abolitionof Import and Export Prohibitions and Restrictionswas announced in Washington, Wednesday, concur-rently with publication of a note to the Secretary-General of the League of Nations to that effect. TheAmerican action is similar to that taken by GreatBritain on June 14, when London withdrew in orderto have a free hand at the World Monetary and Eco-nomic Conference. In the note to the Geneva au-thorities, it was remarked by Acting Secretary ofState Phillips that the American Government hadhoped, when the convention was signed in 1927, thatits principle would be accepted by all nations. "Thereverse has, however, been true," the note continued,"and the withdrawal from the convention of othernations which had adhered leads to the conclusionthat the existing convention may not be fullyadapted to present economic and commercial con-ditions in the world."In a Washington dispatch to the New York

"Times" it was remarked that plans had been madefor announcement of the withdrawal by Secretaryof State Cordell Hull, in London, in the expectationthat some agreement would be reached at the LondonConference giving real strength to the purpose ofthe convention. The convention stipulates, how-ever, that notification of withdrawal must be onhand on June 30 of any year to be effective for thefollowing year, and official withdrawal was accord-ingly made immediately after Great Britain actedin June. The agreement was to become effective notlater than Sept. 30 1929, provided 18 countries hadratified it by that time. Twenty countries actuallyratified the convention before the date set, but insome cases the actions were so hedged about by con-ditions based on ratification by other States that itnever did go into effect. A protocol placing it ineffect among seven countries was signed Dec. 301929, the signatories being the United States, GreatBritain, Japan, Sweden, Denmark, Holland andPortugal. As originally drafted, the conventionprovided for removal within six months of all pro-hibitions and restrictions against imports or exportsby the contracting countries.

THE Bank of Japan on Monday July 3 reducedits discount rate from 4.38 to 3.65%, the formerrate having been in effect since Aug. 18 1932. TheJava Bank on Saturday July 1, raised its rates A of1% to 5%. Present rates at the leading centersare shown in the table which follows:

DISCOUNT RATES OF FOREIGN CENTRAL BANKS

Counittl.Rafe InWedJuly 7

DateEslabliskea.

Pre-atmRate.

Country.Raiz inWedJuly7

DateEstablished.

P.,-stoutMae.

Austria..., 5 Mar. 23 1933 6 Hungary... 414 Oct. 17 1932 5Belgium . _. 3% Jan. IR 1932 2% India ilyi Feb. 16 1933 4Bulgaria... 8% May 17 1932 0% Ireland.-- 3 JUne 30 1932 814Chile 414 Aug. 23 1932 554 Italy 4 Jan. 9 1933 5Colombia... 5 Sept. 19 1932 6 Japan 3.65 July 3 1933 4.38Czechozio- Java 5 July 1 1933 4%vakia____ 354 Jan. 25 1933 4% Lithuania 7 May 5 1932 754Danzig _ ..... 4 July 12 1932 5 Norway. -. 354 May 23 1933 4

Denmark. . 3 June 1 1933 314 Poland._.. 6 Oct. 20 1932 714England_ _ _ 2 June 30 1932 254 Portugal -_. 6 Mar' 14 1633 614Estonia.... 554 Jan. 29 1932 654 Rumania _ . 6 Apr. 7 1933 1Finland__ 5% May 27 1933 6 South Africa 4 Feb. 21 1933 5France . _ _ 254 Oct. 9 1931 2 Spain 6 Oct. 22 1932 64Germany.. 4 Sept. 31 1982 5 Sweden.. 3 June 1 1933 3%Greece 734 May 29 1933 9 Switzerland 2 Jan. 22 1931 254Holland 414 June 28 1933 334

In London open market discounts for short billson Friday were 3/2@9-16%, as against 1/@9-16%on Friday of last week and 9-16@/% for threemonths' bills as against 3/2@9-16% on Friday oflast week. Money on call in London yesterday wasM%. At Paris the open market rate remains at2% and in Switzerland at 13/2%.

THE Bank of England statement for the weekended July 5 shows a further gain in goldholdings which of course again brings the total to anew high mark. The amount of the increase was370,711 and the new high mark reached, 190,954,-832. A year ago the Bank held only 136,965,018 ofbullion. As the gain in gold was attended by anexpansion of 3,648,000 in circulation, reserves felloff 3,277,000. Public deposits rose 2,113,000 andother deposits decreased 5,070,602. The latter con-sists of bankers' accounts which fell off 12,776,750and . other accounts which increased 7,706,148.Proportion of reserve to liability dropped to 45.57%from 46.76% a week ago. A year ago the ratio was33.27%. Loans on Government securities increased353,000 and those on other securities 19,724. Thelatter consists of discounts and advances which felloff 289,662 and securities which rose 309,386.The rate of discount is unchanged at 2%. Belowwe show the figures with comparisons for five years:

BANK OF ENGLAND'S COMPARATIVE STATEMENT.

July 51933.

July 61932.

July 81931.

July 91930.

July 101929.

Circulation_ a 578,773,000 366,678,881 359,257,662 363,803,626 388,839,800Public deposits 16.175,000 20,947,109 15.734,020 9,264,376 9.230.390Other deposits 142,214,646 115,163,831 99,529,705 105,769,921 102,527.832Bankers accounts_ 92.343,876 80,922,753 64,543,324 69,532,815 65,380,123Other accounts... 49,870,770 34,241,078 34,986,381 36,237,106 37,167,709

Govt. securities 75,726,033 67,620,570 31,825,906 54,125,547 43,291,8.55Other securities 28,528,858 41,238,065 34,939.855 26,176,439 39,649,422

Disot. & advances_ 16,352,931 14.991,091 7,102,368 6,265,564 16,182.431Securities 12,175,925 26,246,974 27,837,487 19,910,875 23,466,991

Reserve notes & coin 72,182,000 45,286,137 66,553,284 52,781,828 46,871,907Coin and bullion 190.954,832 136,965,018 165,810.946 156,585,454 155,711.707Proportion of reserveto liabilities 45.57% 33.27% 57.73% 45.88% 41.93%

Thank rate. 2.7... 2%, 244% 3% M4 %,a On Nov. 29 1928 the fiduciary currency was amalgamated with Rank of England

note Issues adding at that time 234,199,000 to the amount of Bank of Englandnotes outstanding.

THE Bank of France in its statement for the weekended June 30 records a decrease of 1,714,727francs in gold holdings. The Bank's gold stands nowat 81,242,741,809 francs, in comparison with 82,316,-793,585 francs a year ago and 56,228,692,706 francstwo years ago. Credit balances abroad, bills boughtabroad and advances against securities register in-creases of 49,000,000 francs, 1,000,000 francs and99,000,000 francs while French commercial billsdiscounted and creditor current accounts reveal aloss of 629,000,000 francs and 1,776,000,000 francsrespectively. A large gain is shown in note circula-tion, namely, 2,117,000,000 francs. The total ofcirculation is now 84,708,889,890 francs, as comparedwith 82,709.569,635 francs last year and 78,609,-675,165 francs the previous year. The proportion ofgold on hand to sight liabilities stands at 77.80%,last year it was 76.11% and the previous year 56.47%.Below we furnish a comparison of the various itemsfor three years:

BANK OF FRANCE'S COMPARATIVE STATEMENT.

Changesfor Week. June 30 1933. July 1 1932. July 3 1931.

Francs. Francs, Francs. Francs.Gold holdings

1,714,727 81,242,741,809 82,316,793,585 56,228,692,706Credit baLs. abroad_aFrench commercial

bills discounted_

+49,000,000

629,000,000

2,585.823.346

2,791,790,042

4,528,521,085

2,868,739,918

6,945,695,379

4,431,968,358bBills bought abroad +1,000,000 1,405,460,887 1,701,854,743 18,686,568,993Adv. against secure. +99,000,000 2,766,386,605 2,815,362,854 2,891,802,934Note circulation_ _ _ _ +2,117,000,000 84,708,889,890 82,700,569,635 78.609,675,165Credit current sects 1,776,000,000 19,714,850,704 25,440.387,211 20,971,382,442Proportion of goldon hand to sightliabilities

0.26% 77.80% 76.11% 56.47%a Includes bills purchased in France. b Includes bills discounted abroad.

4--

THE Reichsbank's statement for the last quarterof June shows a decline in gold and bullionof 33,942,000 marks. This further loss reducesthe total of gold holdings to 188,719,000 marks.At the corresponding period a year ago, the total ofgold was 832,209,000 marks and the year before itwas 1,421,095,000 marks. Increases appear in re-


194 Financial

serve in foreign currency of 3,478,000 marks, in billsof exchange and checks of 235,333,000 marks, inadvances of 139,814,000 marks, in investments of495,000 marks, in other assets of 124,949,000 marks,in other daily maturing obligations of 19,175,000marks and in other liabilities of 34,696,000 marks.Notes in circulation record a gain of 282,019,000marks, raising the total of the item to 3,650,294,000marks. A year ago circulation aggregated 3,984,-207,000 marks and the year before, 4,294,685,000marks. Silver and other coin and notes on otherGerman banks show decreases of 123,293,000 marksand 10,947,000 marks respectively. The proportoinof gold and foreign currency to note circulationstands 7.5% in comparison with 24.1% last yearand 40.1% the previous year. Below we furnish acomparison of the different items for three years:

REICHSBANICS COMPARATIVE STATEMENT.

Changesfor Week. June 30 1933. June 30 1932. June 30 1931.

Assets Retchsmarks. Retehsmarks. Retchsmarks. Reichsmark-s.Gold and bullion 33,942,000 188,719,000 832,209,000 1,421,095,000Of which depos. abroad No change. 41.269,000 87,150,000 177,041,000Reserve in foreign curt'. +3,478,000 84,530,000 129,688,000 299,574,000Bills of each, and checks +235,333,000 3.212,597,000 3,102,382,000 2,652,327,000Silver and other coin... 123,290,000 212,883,000 190,855,000 77,991,000Notes on other Ger.bks. 10,947.000 3,315,000 2,528,000 2,318,000Advances +139,814.000 209,648,000 261,318,000 355,179,000Investments +495.000 320,685,000 364,431,000 102,765.000Other assets +124,949,000 530,340,000 844,492,000 855,863,000

LiabilitiesNotes in circulation.- - - +282,019,000 3,650,294,000 3,984,207,000 4,294,685,000Other daily matur. obi*. +19,175,000 446,886,000 472,682,000 397,949,000Other liabilities +34,696,000 210,850,000 703,588,000 587,149,000Propor.of gold & foreign

....,.... tr nn. nirevIl'n 1 5% 7.85 24.15, 40.15,

SLIGHT advances in rates occurred this week inseveral departments of the New York moneymarket, apparently as an indirect effect of the recentelimination of interest payments on demand depositsunder the Glass-Steagall banking act. Substantialwithdrawals of deposits by out-of-town institutuonsare beginning to affect the market a little. Rates atwhich the New York banks are lending funds todealers to carry bankers' bills were advanced slightlyyesterday, it was reported, and the dealers respondedwith an all-round increase of A% in acceptance rates.The official buying rate of the New York FederalReserve Bank is 1% for bills maturing up to 90 daysNo changes have been noted in commercial paperrates.

Call loans on the New York Stock Exchange heldat 1% all week, both for renewals and new loans.In the outside market loans were reported done atYi% to Thursday, inclusive, but there were noofferings at a concession yesterday. A slightlyfirmer tendency also was reported in time loans yes-terday. Both the usual tabulations of brokers'loan totals were made available this week, wtih sharpincreases evident as a result of the speculative enthu-siasm. The comprehensive Stock Exchange figuresfor the entire month of June reflected an increaseduring the month of $251,876,682. The FederalReserve Bank of New York figures for the week toWednesday night showed an advance of $94,000,000.

DEALING in detail with call loan rates on theStock Exchange from day to day, 1% hasbeen the ruling quotation all through the week forboth new loans and renewals. The market for timemoney has been very quiet this week with only oneor two transactions in 90-day money. Otherwisethe market has been at a standstill. Rates arenominal at Yl% for 30 days, 1% for 60 days to fivemonths, and 1370 for six months. The marketfor commercial paper has been active this week.The supply of paper is increasing. Rates are 13/2%

Chronicle July 8 1933

for extra choice names running from four to sixmonths and 13470 for names less known.

THE demand for prime bankers' acceptances hasbeen very good this week, particularly fromout of town banks, but the best paper is still scarce.Rates have been advanced. Rates were raised onFriday A of 1% in both the bid and asked columnson all maturities. The quotations of the AmericanAcceptance Council for bills up to and including threemonths are A% bid, and A asked; for four months,Y% bid and 34% asked; for five and six months,13/8% bid and 1% asked. The bill buying rate ofthe New York Reserve Bank is 1% for bills runningfrom 1 to 90 days, and proportionately higher forlonger maturities. The Federal Reserve banks'holdings of acceptances rose during the week from$8,186,000 to $23,084,000. Their holdings of ac-ceptances for foreign correspondents has also in-creased during the week from $36,060,000 to $36,-140,000. Open market rates for acceptances areas follows:

SPOT DELIVERY.180 Days 150 Days 120 DaysBid. Asked. ltIct. Asked. Bid. Asked.

Prime eligible bills 13' 1 19 1 34SO DaVs Days 30 DaysBed. Asked. BM. Asked. Bid. Asked.

Prime eligible bills M 3.5 3' Si

FOR DELIVERY WITHIN THIRTY DAYS.Eligible member banks 114% bidEligible non-member banks 114% bid

THERE have been no changes this week in therediscount rates of the Federal Reserve banks.The following is the schedule of rates now in effectfor the various classes of paper at the different Re-serve banks:

DISCOUNT RATES OF FEDERAL RESERVE BANKS.

Federal Reserve Rank.Rate toWel onJuly 7.

DateEstabItthed.

PreviousRate.

Barton_ New York Philadelphia Cleveland Richmond Atlanta Chicago St. Louis Minneapolis Kansas city Dallas San Francisco

2)4a

3343%

33343%3%3

June 1 1933May 26 1933June 8 1933June 10 1933Jan. 25 1932Nov. 14 1931May 27 1933June 8 1933Sept. 12 1930Oct. 23 1931Jan. 28 1932June 2 1933

3)433)53)44333'33'434334

STERLING exchange has fluctuated wildly thisweek and has further advanced in a most sen-sational way. This has been due mainly to the de-termination of the gold bloc countriesFrance, Italy,Belgium, Holland, Switzerland and Polandto adherefirmly to gold, and the resolute action of the AmericanGovernment in refusing to agree to the early stabili-zation of the dollar. The market is in a highlynervous state owing to the wild gyrations in exchangeand especially to the unprecedented swings in sterlingand the franc. On July 5 in consequence of PresidentRoosevelt's rejection of the stabilization plans broughtup at the Monetary and Economic Conference inLondon the United States dollar fell in Paris andLondon to the equivalent of 73.7 cents gold, in Am-sterdam to 74.0 cents and in Zurich to 73.6 cents.But this was as nothing compared with the furtherbreak in the dollar which occurred yesterday whensterling rose to $4.75 and the franc to 5.63 cents,making the dollar worth less than 70 cents. Therange for sterling this week has been from 4.3134 to4.743/2 for bankers' sight bills, compared with a rangeof between 4.20M and 4.43 last week. The rangefor cable transfers has been between 4.324 and 4.75,compared with a range of between 4.2034 and 4.433/ia week ago. Of course the major events affecting


Volume 137 Financial Chronicle 195the foreign exchanges this week were centered aroundthe developments at the London conference. Theseare fully described in other columns. Actual trans-actions in the foreign exchange market are very lightand the wide variations in quotations from hour tohour, representing rather the attempts of foreign ex-change traders to gauge the pulse of the market thanthe result of actual trading transactions. Only themost essential transfers are effected and dealings incommercial bills are of very small volume.

Following the announcement of the gold blockcountries that the chief officers of their central bankswould meet promptly in Paris in order to formulateeffective plans for the mutual protection of theirrespective currencies against speculative drives, themarket reported that there was evidence of a move-ment . of capital and gold to these countries, so thaton Wednesday the gold currencies in London dis-played considerable strength against sterling, con-trary to the usual tendency of the recent past infavor of sterling, which had been held down only bypersistent selling of sterling by the British ExchangeEqualization Fund. There can be no doubt that atthe moment, at least, the London authorities havenot taken a technical position in the exchange mar-ket, as they are anxious to avoid any appearance ofserious conflict with the Washington administrationprogram for the dollar. On the other hand bankersgenerally are convinced that the Bank of England andthe British Treasury will do nothing to disrupt what-ever plans the gold bloc countries may adopt for thedefense of the gold standard and their own gold re-serves from speculative drives. Indeed there canbe not doubt that Great Britain will actively assistthese countries in their program. To oppose theirmeasures would only impair the confidence whichhas been so long reposed in the London market, whilea policy of cordial co-operation with the gold-bloccountries may be expected to induce a continuanceof confidence which for some time past has caused agreat flow of foreign funds to London for purposesof mere security.Gold continues to flow to the London open market

from all quarters. Most of it is taken by Continentalgold hoarders, as has been the case for many months.The Bank of England or the Exchange EqualizationFund are also frequent buyers, sometimes openly butfrequently under cover of the phrase "tor an unknownbuyer." On Saturday last 1,250,000 bar gold wasavailable in the open market and was taken for Con-tinental account at a premium of 6Md. Bars werequoted at 122s. 41%d. On Saturday also the Bank ofEngland purchased 104,200 in gold bars. On Mon-day 100,000 of bar gold was taken for Continentalaccount at a premium of 10d. Bars were quoted122s. id. The Bank of England bought 1,192 ingold bars. On Tuesday 165,000 bar gold was takenfor Continental account at a premium of 91%d. OnWednesday 020,000 in bars was available in theopen market, of which 250,000 was taken by anunknown buyer (doubtless the Bank of England) andthe rest went for Continental account. Bars werequoted 123s. 7d. The premium dropped to id. OnThursday of 550,000 bar gold available, the bulkwas taken for Continental account and the re-mainder by an unknown buyer at a premium of 7d.Gold bars were quoted 124s. ld. Yesterday, Friday,330,000 in bars was taken for Continental interestsat a premium of 9d. Bars were quoted 124s. 3d.Money continues in great abundance in the London

market and rates show hardly any change from dayto day. Call money against bills is in supply at 1%%to 3L70. Two-months' bills are quoted 3A% to %%,three-months' bills at 1%%, four-months' bills 1/2%to 9-16%, six-months' bills :74% to 34%. The Bankof England statement for the week ended July 5shows an increase in gold holdings of -E370,711.Since January the Bank has acquired more than70,000,000 in gold. Present bullion holdings standat 190,954,832, which compares with 136,965,018a year ago and with the minimum of 150,000,000recommended by the Cunliffe committee.At the Port of New York the gold movement for

the week ended July 5, as reported by the FederalReserve Bank of New York, consisted of exports of$10,463,000, all ear-marked gold. There were nogold imports. In tabular form the gold movementat the Port of New York for the week ended July 5,as reported by the Federal Reserve Bank of NewYork, was as follows:GOLD MOVEMENT AT NEW YORK, JUNE 29JULY 5, INCL.

Imports. Exports.$900,000 to England.9,563,000 to France.

None.$10,463,000 total

Net Change in Gold Earmarked for Foreign Account.Decrease: 810,463,000.

The above figures are for the week ended Wednes-day evening. On Thursday there were no importsof gold but $5,996,000 was shipped to France, andgold held ear-marked for foreign account decreased$5,996,600. On Friday there were no imports orexports of the metal or change in gold held ear-markedfor foreign account. There have been no reportsduring the week of gold having been received atany of the Pacific ports.Canadian exchange, while still at a severe discount,

is more favorable to Montreal than at any time inmany months. This is due entirely to the appreci-ation in sterling with respect to the dollar. OnSaturday last, Montreal funds were at a discount of8ht%, on Monday at 7A%, on Tuesday, July 4,there was no market in New York. On Wednesday,Canadian exchange was at a discount of 6%8%, onThursday at 63/%, and on Friday at 53'%.

Referring to day-to-day rates, sterling exchange onSaturday last was firm. Bankers' sight was [email protected]%; cable transfers 4.32/@4.35. On Monday,on President Roosevelt's repudiation of stabilizationprograms the pound moved up sharply. The rangewas 4.39%@4.47% for bankers' sight bills and4.40/@4.48 for cable transfers. On Tuesday, July 4,there was no market in New York, but abroad thepound rose still higher. On Wednesday sterling de-veloped further exceptional strength. Bankers' sightwas [email protected]; cable transfers [email protected]/. OnThursday sterling was strong. The range was 4.463%@4.59 for bankers' sight and [email protected] for cabletransfers. On Friday sterling further advanced insensational fashion; the range was [email protected] forbankers' sight and 4.663/[email protected] for cable transfers.Closing quotations on Friday were 4.661% for demandand 4.67 for cable transfers. Commercial sight billsfinished at 4.66; 60 day bills at 4.65; 90 day bills at4.6434; documents for payment (60 days) at 4.65,and seven-day grain bills at 4.663I. C

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