Evening star., 1924-04-06
AMERICANS BLAMED
IN EXCHANGE PANlCS
European Newspapers Charge U. S.
Financiers Gamble in
Money Markets.
SHORT SELLING CHARGED
Recent Fluctuations of Franc
Cited as Example,
SHORT SELLING CHARGED
BY WILLIAM BIRD.

By Radio to The Star.
PARIS, April 5.-In the present ex-
cited state of the public mind on this
side of the Atlantic. due to the violent
fluctuations in the paper currency, all
manner o. charges are being made re-
Karding Americas financial power and
the uses to which it has been put.
Newspaper articles and editorials,
printed in every European country dur
ing the past week, have laid emphasis
on the tremendous American gold sur
plus, and how it could be welded to af-
feet the finances of other countries.
The recent violent fluctuations of the
French franc have been cited as the
principal illustration of the extent of
this power. Among the wild talk heard
on the Paris stock exchange was a re-
port that the American banking group.
which recently saved the French frame
by d timely advance of dollars had
themselves provoked the panic which
rendered this intervention necessary.
According TO this story these American
bankers had cleaned up about $125, eOO.-
600 by selling francs at 8 cents and buy
ing them back later at cents. Then on
the eve of the American loan. the report
went on, those on the inside again
which they are selling today at about .
cents. thus winning both ways.
Method of "GambIing"
Those French. German and Italian
papers which have dignified such stories
by creditng them. are inquiring which
country will be the next victim of the
American gambling mania" They are
telling their readers that the procedure
for eXcha nge speculation for anybody
controlling large cash is simple Manipu-
lators simply sell any country's cur
rency short TO the extent of several mil
lion dollars they say. and this pro-
duces a panic. Those who are long on
the currency then begin TO sell rapidly.
Thus that. particular currency declines
at a dizzy speed, as the frame did sew
eral weeks ago.
After making a substantial profit,
tho manipulaters begin to buy in the
Deprecated currency at low prices,
these papers say. When it is judged
that the maximum profit has been
collected Il large loan to the country
in question is announced and it's cur
rency rises rapidly, enabling the ma
nipuIators to sell their surplus hold
ings with another large profit.
People CreduIous.
Whether or not it is true that
wall street rules the world" as eX-
tremc commentators in Europe say.
European countries appear heSitan
in announcing any financial program.
This may be due to the state of the
public mind. as the people have suf
fercd SO much through fuctuating
currency and rising prices that. many
Of them are ready to believe any
thing.
In New York banking circles the
idea of the American gold surplus be-
ing put to any such uses as is charg-
ed in European newspaper articles is
ridiculed. There was a certain amount
of American short selling during the
recent smash in the franc, the same
as there was German, English and
Dutch short selling But this was an
incident merely, it is declared. The
franc went down primarily because
Germany as 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 imitation of pa per notes, which
-ose from less than 800, 100000 in
the third week of December to over
4,3O0, 900, 900 in the first week of
riously weakened faith in the franc.
This is the idea which calm observ-
erS on this side OF the water take of
the matter. Naturally, there was
much accompanying speculation for
the decline, and the short interest
the American syndicate loan Of $780,
100. goo was announced. But this loan,
il is said here, would never have been
made had not the French authorities
adopted the plan of fiscal reform. in
ereasing taxes 20 per cent and prom
fsing retrenchment in expenditures
for reconstruction. which gave conf
dence that the budget deficit would
fl Copyright. 1924