The New York herald., 1921-07-05
PARIS BANKS ACTION
AVERTS Big CRASH
Unitedly Give Large Buying
Orders When De Chine
Failure Occurs.
TO HALT SPECULATION
Government Urged to Change
Banking Law and Prevent
Flimsy Organizing.

Special Gable 10 THE NEW YORK HERALD.
Copyright, 1921. bD THE NEW York HERaLD.
New York Herald Bureau.
Paris, July 4.
Only concentrated efforts by big
Paris banks, 1t is now known, pre-
vented a veritable financial catastrophe
when the news of the Banque Indus
trielle de Chine crash was published.
Orders were Immediately given to buy
everything in sight and this kept up
confidence on the Bourse and gave the
lie to rumors that solidarity was no
longer possible in the capitals banking
circles. Although the momentary ten
dency of some smaller dealers to get
excited caused a downward movement,
this was stopped by an overwhelming
rush of orders, some bank shares like
the Paris Pays-Bas jumping fifty points
In as many minutes
While the fall of the Banque de
Chine undoubtedly is a serious blow to
French foreign and financial prestige.
optimists are now pointing out that 1t
probably will mean the institution of
greater security in the operation of all
banks. This is already reflected in the
reorganization of the Banques de Prov
ince, now considered out of danger, al
though four charges have already been
brought against the former directors.
They will be asked to explain why
heavy deals were put through for their
friends with little guarantee. while re-
liable business transactions met with
cold shoulder
This sort of business speculation,
combined with too much optimism about
the exchange rate maintaining high
levels for another year, caused the
Banque de Chimes downfall and would
have wrecked the Province bank group
II the moneyed interests had not de-
cided to have a general housecleaning
Just how far this will be carried out de-
pends on the Governments attitude in
the Senate and Chamber debates next
week.
Paul Doumer. Minister of Finance, is
certain to come in for more condem-
nation, and as he has been considered
as only the temporary occupant of the
ministerial berth many believe that the
time has come when Premier BRAND will
replace him with some one with ideas
similar to those advanced by NJ. Las
teyrie, the budget reporter and well
known as a financial organizer.
Some interests even are urging that
the remaining days of the session of the
Chamber be devoted to revision Of the
French banking laws. providing for in
spections monthly by Government agents
and also demanding that greater atten-
tion be paid to branches and foreign
banks, which are increasing at an alarm
ing rate. admittedly only for the purpose
of specializing on exchange variations.
1t has long been the desire of some
French bankers to put heavy tax on
American. British and Italian banks op-
Grating here. but the movements have al
ways been suppressed because of fear
of reprisals at time when France needs
all the foreign confidence and SYM
pathy available.
At the end of the month settlements
were easily affected. money costing 3I9
on the floor and 6 on the curb. Short
term loans from the Bank OF France
still are AZ per cent. The Bank of
Frances gold reserve is up 225000
francs. with the note circulation down
1000, 900. Advances to the State re-
main unchanged.