San Antonio light. [volume] (San Antonio, Tex.) 1911-1993, 1924-04-07
Some Europeans Criticize
Gambling Mania"
of Americans.
SAY POWER MISUSED
Newspapers Attempt to
Show How Speculation
Deals Are Worked.
BY WILLIAM BIRD.


Copyright. 1924. by Consol. Press Assn.
Paris, April I'm the present ex-
cited state of the public mind on
this side of the Atlantic due to the
violent fluctuations in the paper cur
rency, all manner of charges are be-
ing made regarding Americas finan-
cial power and the uses to which it
has been put.
Newspaper articles and editorials.
printed in every European country
during the past week have laid en-
phasis on the tremendous American
gold surplus and how it could be
welded 10 affect the finances of other
countries.
The recent violent fluctuations of
the French franc have been cited as
the principal illustration of the ex-
tent of this power. Among the wild
talk heard on the Paris stock ex-
change was report that the Ameri-
can banking group which recently
"saved the French franc" by timely
advance of dollars. had themselves
provoked the panic which rendered
this intervention necessary. Accord
ing to this story, these American
bankers had cleaned up about $12J.-
100000 by selling francs at six cents
and buying them back later at four
cents. Then on the eve of the Amer
lean loan, the report went on, those
on the inside again bought francs at
less than four cents. which they are
selling today at about six cents, thus
winning both ways.
Expose American Gambling"
Those French, German and Italian
papers which have dignified such
stories by crediting them. are inquir-
ing which country will be the next
victim Of the American gambling
mania" They are telling their read
ers that the procedure for exchange
speculation for anybody controlling
large cash is simple. Manipulators
simply sell any country's currency
short to the extent of several mil
lion dollars, they say, and this pro-
duces n panic. Those who are long
on the currency then begin 10 sell
rapidly. Thus that particular cur
rency declines at dizzy speed, as
the franc did several weeks ago.
After making substantial profit.
the manipulators begin 10 buy in the
deprecated currency at low prices.
these papers say. When it is judged
that the maximum profit has been
collected. large loan To the country
in question is announced and its cur
rency rises rapidly. enabling the
manipulators to sell their surplus
holdings with another large profit.
Whether or not it is true. that
avail Street rules the world as
extreme commentators i'll Europe
say. European countries appear hesi-
tant in announcing any financial
program. This may be due to the
state of the public mind as the peo-
pie have suffered so much through
fluctuating currency and rising prices
that many of them are ready to be-
lieve anything.
Short Selling An Incident.
In New York banking circles the
idea of the American gold surplus be-
ing put to any such uses as is charged
in European newspaper articles. is
ridiculed. There was certain
amount of American short selling dur
ing the recent smash in the franc.
the same as there was German, Eng
lish and Dutch short selling. But
this was an incident merely, it is
declared. The franc went down
primarily because Germany was not
paying reparations and the. French
budget was far from balancing. The
French government was at the end
of the rope. so far as depending on
international loans to make good the
deficit. This, with the rapid infla-
ton of paper notes which rose from
less than 3.7OO.O00,000 in the third
week of December to over 4,3OO.OOo,-
600 in the first week of March,.
the highest on record-seriousiy
weakened faith in the franc.
This is the idea which calm observ..
crs on this side of the water take OF
the matter. Naturally, there was
much accompanying speculation for
the decline and the short interest was
very much overcrowded when the
American syndicate loan of S1OO.,oOO,-
600 was announced. But this loan,
it is said here, would never have
been made had not the French au,,
thorities> adopted the plan of fiscal
reform, increasing taxes 20 per cent
and promising retrenchment in ex-
penditures for reconstruction when
gave confidence that the budget deficit
would cease.