New Britain herald., 1929-08-16
WORLD FINANCIAL
 SITUATION UPSET
WilliamstoWp Speaker Says Wall Street Is Responsible

Williamstown, Mass, Aug. 16 P' The present international financial situation affected by the upward movement of stock prices in New York, which he declared has up set the equilibrium in the money markets of the world is signiti- cant merely as a repetition of his tory, Professor T. E. Gregory, pro- lessor at the London School or Economies and author of "Foreign Exchange" said today
 Speaking before the hanklng currency and exchange conference of the institute of politics, Protes- sor Gregory said:
 "This is not the first time New York stock exchange activity has upset the equilibrium of the worlds money markets. All that is happen ing today is that America is reas- serting her old role of disturber or the economic peace of the world . situation which occurred four times in the past century and will inevitably occur again.
 'The difficulty has been that on the present occasion the stock boom has taken place at a time when the financial health of Europe was not recovered and therefore any extra strain was peculiarly undesirable. The whole central European area was seriously in want of short and Iopp S,1op1jaS of c1pital
 Pressure in London, which was already hard pressed by the flow of funds to the United States to earn the high rates paid there, was ac- centuated by the falling off in American financing of central Eu- rope. London could ill afford to deepen the industrial depression by raising the bank rate to protect it. self, though the rise can, in all probability, not be delayed much longer.
 "The French money market-tha strongest in Europe-was also bring ing pressure to bear upon London, and the level of rates in the two markets indicated a thoroughly ab- normal position
 Federal Reserve Involved
 It was inevitable that the present position both in the United States and in all Europe should give rise to the question of the degree of re- sponsibility attaching to the Federal Reserve system, Professor Gregory declared, especially if it is borne in mind that one of the main reasons for instituting the reserve system ill 1913 was the concentration of re- serves in New York and the tying up of those reserves in call money loans to the Stock Exchange.
 What Europe wanted economical- ly, he declared, was cheaper money in New York. The Federal Reserve system could force cheaper money in New York. The Federal Reserve system could force cheap money only by breaking the boom, he saii pointing out that, although one sec tion of American opinion was hos tile to stock speculation, anotha1 section was as violently opposed t' forcible intervention by the centra bank.
 Tn any case" he stated, 'it i doubtful if the reserve system coult break down the speculative wae' even if it were considered desirabl. to do so. The political and eco homie risks would be immense when things have gone as far a' they have now"
 Economic, Not Political
 Dr. c. S. Duncan, economist Of tn, association of railway executives discussing the transportation factor. of commerce, said that the United States has made a material contri button to the economic welfare c the world by treating transportation problems as economic rather thar political questions.
 Tt is significant that foreign dele gations are frequently among us tc study our methods of operation" h. said.
 Professor Herbert I. Priestley O the University of California toll members of the institute that tn humanitarian work of establishing American foundations had been s1l perior to governmental intervention in the task of building up depen6 ent areas of the Caribbean an. placing them on a stable founda ton.
 The agencies of government" h said "are powerless to evolve a so ciety based on conceptions simila to our own unless they are effica ciously assisted by the helpful agen cies which do so much for Ameri can society outside the pale of pure ly government effort.
 Stability and basic organization depend upon the development Q healthy physical, moral and intel lectual conditions which will ars from the transplantation of socia ideas through the agency of grea American foundations. touching tn individual in ways no governme1 can"