Evening star. [volume] (Washington, D.C.) 1854-1972, 1928-07-01
PEACE AID SEEN
IN STABLE FRANC
Country Now Takes Place in
Worlds Money Market
Through u. S. Hep.
BY GERVILLE REACHE.

II Radio to The star.
PARIS, June 3o.-This week has been
a banner che for humanity. Every
time great nation regains its equi-
librium one more stone has been added
to world peace, ana France at lest has
regained its equilibrium through accom-
pliShing monetary reform.
From the sterilization Of the franc
on a gold basis the Bank of France
emerges enormously strengthened and
takes its place among the three greatest
banks of issue in the world. It comes
after the United States Federal Reserve
system. but is on an equal footing With
the Bank OF England. which few years
ago came through threatened bank
ruptcy with credit intact
Placing money on sound basis how
ever must not be confused with aug
mentation of national wealth. The
French state remains poor and debt
laden. NJ Poincare himself declares
that the 1929 budget will be an arduous
task. Taxes will continue to bear
heavily on national economy and the
government cannot for many years put
civil servants on pre-war footing as
regards pay. nor can 1t even remove
restrictions on rentals.
The Bank of Frances first balance
sheets after sterilization reveal peer
less situation. More than a billion
dollars in gold and nearly billion
and a half in foreign exchange are
among the assets. The liabilities of
three billion dollars are handsomely
covered and the franc is Soundly
in.renched,
The world today has three gold ex-
change cur-encies-dollar. pound and
franc But the franc could not have
joined this trip without the friendly
collaboration of the New York market
and the New York Federal Bank, TO
which France rendered merited homage
in a statement published Thursday. Ii
was the Federal Reserve Bank Itself
that collected and barreled the $780,
100000 in yellow metal which enabled
the Bank Of France TO get the 40 per
cent gold coverege for It's sight obliga-
tons. Otherwise. with gold actually in
France, the bank could not have pro-
vioed SIS per cent coeerage as required
hy new currency law. France was thus
obliged to convert certain part OF
It's holding ii foreign exchange into
gold before resuming gold payments,
an operation which England has not
always understood.
France, therefore. considers American
UfaaIcleIS Elll6 SpOEtS ana Tue HlOu6StN
eff Benjamin Strong. governor of the
New York Federal Reserve Bank. was
put to a severe test by the praises which
were Showered upon him from all SIDES
during his visit here. Indeed, the gov
ernor. who always has been friendly
toward France. seized this opportunity
to show how interested his institution
is in Frances monetary recovery and
also how excellent are the relations be-
tween French and American banks Of
issue
France had no need to solicit foreign
credits as England did when she re-
turned TO par. because she already had
large assets IN London and New York.
Concerning future cooperation be-
tween issue banks, 1t is a good thing
for the American market that France
has resumed her former place in the
international money market. AS Paris
is nov Europe's second gold center. the
United States viii not always have TO
operate through London in international
transactions.
fCopvriwht. 19esl