Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-09-27
BRITISH GOLD SUSPENSION
LEAVES EUROPE In DAZE
Dominant Question Is "What Next?" as
Collapse of Pound Plunges World
Finance Into Chaos.

! exports. The political situation, To-
eether with the attitude of the trade
Unions on collective contracts and the
dole. made this virtually impossible.
Mutiny in the feet when the sailors
nav was cut was a sufficient lesson In
this respect Nothing, therefore, re-
NAMED save to arrive at the same
and the national debt and stimulation
of home and foreign trade-by the dan
Cerous method Of imitation. What will
! be the results?
Results Predicted.
Some already are visible, others GER
tainly are not yet even imaginable.
even to try to analyze them, but among
| them now it seems certain will be found
these:
/. A terrible blow has been struck at
the gold standard. Nearly all European
countries had heavy investments, direct
or indirect, in London. All now are
hit Several may be forced to initiate
like Great Britain before the crisis is
ended.
Q. British prestige has received bad
blow. The consequences both within
and without the empire are incalcu-
liable.
France ana u. ,. welded.
8. The international lineup Of powers
seems to be affected. France and the
United States are thrown forcibly to-
gether as the sole strong defenders Of
the gold standard. The foreign trade
Of France and the United States is
threatened equally. Both have an
urgent interest to help Great Britain
stabilize as high as possible at the
earliest moment.
4. The British banking system through
out the world, which enjoyed almost a
monopoly on the discount Of foreign
trade bills, is completely crippled.
French and American banks, less nu-
merous and unaccustomed to the tech
mic of current business discounts, are
unable Immediately to take the place of
British banks.
Foreign trade everywhere, seemingly,
will correspondingly slow up because Of
lack of banking facilities. Inciden-
tally, Great Britain stands to lose some
eco 900 900 ($225, 100000 at the latest
exchange) year in bank profits.
Investors to Lose.
S. Foreigners will suffer a heavy loss
on their pound investments, while the
British will suffer corresponding loss
on their commitments abroad in stable
currencies like the dollar and franc.
6. In Great Britain, wages and costs
and the national debt and taxes win all
be reduced by the easy way of imitation.
All debtors will gain and all creditors
lose. Imports will decline, exports in
crease and domestic business will pick
Up. Interior prices will rise, but with
considerable delay. Foreign debts, both
national and private, will be increased.
T. There will be flight from the
pound. Every one, foreign and British
alike, will try to get capital out, espe-
cially to Paris and New York, which
temporarily may be stimulated by this
afilux Of new money.
British Credit Hurt
Great Britain's credit will be hurt.
Nobody viii want to lend Great Britain
any money and eventually there may be
an acute shortage Of capital for current
business and for all other purposes.
81 Under these circumstances, the
optimistic statements now issuing inter-
mittently from London are completely
discounted on the continent, where most
countries have already gone through
more or less imitation and realize Bit
terly what 1t really means. The general
experience has been that it is easy to
start on the downward path, but hard
to STOP