New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1921-08-01
Paris Outlook
Frightened by
Easier Money
Situation Improves With
Reduction of Discount
Rate and the Recall of
Circulating Notes
Franc Reacts Upward
Pessimistic Harvest Pros
poets Offset by Hope of
q ra in From Rumania
Special Cable to The Tribune

Copyright. 1921. New York Tribune Inc
PARIS. July 3f.-The outlook in
financial circles is brighter this week
as result Of the action of the Bank
OF France in recalling from circula-
ton 3s2,oooooo francs, lending 1oo.-
ooo,o0o francs to the state, and reduc-
ing the discount rate from 6 to 51a
per cent. These developments show a
tendency toward defiation and indicate
an easier money market in which hard
pressed industry has been at better
advantage.
On the other hand, the franc in ex-
change has reacted upward over the
prospect Of large purchases Of Ameri-
can collars as the result of the evident
intention of the United States Treas
ury to collect 100000, 900 in war
creclts within short time. Exchange
rates also have been influenced by the
very unsettled state of European poll
tics the last week. The value of the
frame mounted from 1890 to 1916. the
highest 1t has been in weeks. The
pound likewise went up from 4639 to
ao.Sa, while the Swiss franc, the peseta,
HORN, lire and some others experienced
smaller gains. The mark was station
airy.
'ioA 0isauVanCageouS movements
OF exchange rates are forecast ~ tho
Administration in Washington remains
firm in its determination not to accent
IN part payment of Frances debt Of
ao'ooo, 900 francs, the bonds of ma
tons indebted to France, such as Tur-
key, Poland and Greece.
Will Favor Foreign Trade
The market was we'll impressed with
n
the Bank of France. Some expressed
the belief that this indicated trend
IN the country's economic policy toward
the example set by England in dis
continuing efforts to uphold the value
OF the pound at the expense of British
foreign trade. The loosening of the
money market in France is expected to
have its best results in stimulating in
dustry, which needs the assistance of
lower rates in the extension of its
scope.
Although the harvest outlook is bad
on account of the lack of rain, there
is some local encouragement in the
possibility that France will be able to
import wheat, If necessary, this year
from Rumania and Bulgaria. Exchange
rates on those countries would make
the purchase Of grain there much more
tHdA III LHe OIlCeQ
States or Canada.
The banking outlook is better. Some
encouragement is obtained in the new
lease of life given the Industrial
Bank. of China and the possibility held
out that it may recover.
Government Favors Budget
Encouragement Is seen also in the
outlook for national finances, as q re-
suit of the tendency Of the government
to put its budget demands on a more
stable basis and discontinue the week
to-week borrowing and paying custom
now in vogue.
Under the general influence Of the
lack Of confidence, the Bourse contin-
ues dull, although it reacts to the least
encouragement. Russian stocks have
enjoyed some popularity as the result
OF runors that the Bolsheviki will be
disposed to recognize the debts Of the
foner regimes. Mexican was firm as
the result Of daily rumors that Presi-
dent Oregon was about to be recog-
nized by the Washington government.
A few sensitive reactions were noted
elsewhere, but in general the stagna-
tion Of European economic affairs was
pretty well mirrored in the trading.