Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-11-30
FRENCH FINANCIAL
RECOVERY RAPID
National Bank Has Piled Un
Large Gold Reserve in
Recent Months.
BY JOHN F. SINCLAIR.
Special Dispatch to The Star.

Special Dispatch to The Star.
NEW YORK, November 30.-No coun-
try has recovered financial strength
since the war more rapidly than France
During all of the high-money tension
| of the last Is months the Bank OF
France has maintained its discount rate
Of u per cent, has sought advice from
| no other nation regarding how to run
its international affairs and has added
to its gold resources until they nov
stand at the highest figure in her his
tory 40,500, 100000 francs (approxi-
mately $500, 000, 000)- an increase OF
Is per cent over the same date of last
year.
French bank note issues outstanding
also have increased until they now
amount to $1,000 ,000, 900 francs (about
$4,000, 900, 000)-an increase of pei
| Frances credit balances abroad, while
somewhat diminished, have not been
reduced to the amount equal to her
additions in her gold reserve. That's
significant!
Send Credit Abroad.
The French commercial and business
system does not yet provide trade &C.
ceptances and call loans sufficient fol
her to use all or any great part of he1
liquid funds. So she sends the balances
abroad, mostly to England and e
United States. The Bank of France, as
! well as the commercial banks, have
found it prof1taole-very profitable in
the last two years, especially-to send
their money and credit abroad. Ano
to withdraw such funds whenever de-
sired, without considering any other
interest than their own. Not SO good!
TnHou ESraNnasc ohiIifu To GsiYoI10Y1 off
gold" creates a serious situation. She
like the United States, has far more
gold than she needs. Yet she continues
to pile up her gold supply, much like
India absorbs silver.
While her policy of keeping her sur
plus funds abroad has been wise in
that it has not inflated her situation at
home, it has been and still is a source
of great disturbance to the rest of the
world: She will continue that role
probably until she has refunded ali
her short-term obligations into long
term ones. But if she can refund her
enormous floating debts. she will have
done service not only for France, but
for the rest of the world.
Until then, the French gold policy
will be watched with anxiety by every
other nation, notably England.
Gold Problem.
The gold problem is always with us
The physical gold stock of the United
States is now above $4,350, 100000. On
January l 1t stood at around S4,10O,-
100000. So the United States, with a
net gain of $3.50, 000, 900 during the year
has recovered about one-half of what
was lost in the easy money period of
late 1927 and early 1928, when about
$500 100000 of gold went abroad.
I'VE can afford to lose, and the rest
of the world can we'll afford to secure.
5000, 000, 900 to $500, 100000 of our gold.
In my opinion. that much gold at least
will have to leave the United States
before the world can get back to a
normal commercial basis" said one of
the leading gold students to me re-
Gently.
Most students of the gold movement
believe that the United States will
lose several hundreds of millions. OF
gold during 1880. And how?
Before the stock market drop. redis-
count rates in Europe we're higher in
the United States than abroad. But
not now. The tendency will probably
be for European credit to be used at
home. This should have a tendency
to drop the American exchange rates,
so that 1t will pay the United States