Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-10-11
Pound Sterling May Be Stas
biIized at IS Per Cent
Below Parity.
BANKS SHOWING ABILITY
TO TAKE CARE OF RUNS
Comparative Steadiness of Secur.
tiles Markets Has Aided in Boil.
stering Business Sentiment.
Special Dispatch TO The Star.

cpeClal OlSpatcn 70 The Star.
NEW YORK, October 1o.-Cable and
radio dispatches to the Business Week
give the following survey of business
abroad for the week ending October los
Europe.-With the disquieting excep-
ton OF Germany, where more, and pos
sibly serious, financial and political
trouble is brewing, the trend Of Euro
prospects Is somewhat, if still only
specifically, more favorable. Initial
tensions occasioned by England's ADAM
donment of the gold standard have
somewhat relaxed.
England finally has decided on gen.
eral elections at the end of October.
1t Is expected that the national gov
eminent will be returned, made up of
sections detached from all three parties
rory, Liberal and Labor-uncom.
United to any definite program but
given blanket mandate to take such
measures as its discretion finds neces-
sary to meet present economic ex.
igencies.
Sterling continues to oscillate or.
radically. AS yet, there is no tndica-
ton as to what may be the true eco.
nomlc value at which natural stabili-
cation and return to gold parity could
StaDlIlzat1on at rate Is per cent below
parity probably will be attempted after
the elections, If these result as now ex-
pected.
Bank Runs Few.
notwithstanding several rather i'm
portant bank failures in various Euro
pean countries. few bank runs have
started so far, and such as have were
readily controlled. But the movement
| LOT repatriation Of foreign assets and
! establishment of extreme dornesttc
| nquidity against contingencies in the
uncertain future continues to be the
most conspicuous financial trend, along
with the growing popular boarding.
tendency. In France, banks actually
are saving up gold bars and retailing
slices at premiums Public gold All.
sorption is estimated at nearly tue
| million dollars weekly Every countrU
Is manlfesting a tendency toward self
detachment from outside commitments
as lar as possible. These tendencies.
coupled with distrust in the soundness
OF the American banking structure.
unoerl1e and explain the wholessI II
liquidations of foreign-owned Americar
| securities and commercial paper.
LOndon.-BuSiness picked I'D pronnt.
~ after the announcement that the
| long-awaited national election was set
| for October ~.
Sterling and the stock markets are
steady. Resentment over the contin.
uance Of foreign exchange restrictions iS
growing, most leaders charging they are
no longer necessary. They prevent ex.
port OF sterling and hinder legitimate
trade IN forward currencies. General
optimism under the first effects of de.
| Valuatlon continues. Textiles are bet
InnIIirv l.
Business in iron and steel, after early
unsteadiness, is strong. Inquiry for coal
has improved, includes an order for
| 10000 tons for the Danish state raN
ways.
| Concern Over Germany.
Financial interests are more concern
60 over pending trouble In Germany and
the United States than over their own
position. The New York gold eflux and
the feverish fluctuations in Wall street
are expected to bring back to London
much expatriated capital. Recurring
rumor that the leading London finance
mouse is tottering, owing to European
and South American commitments. lie
unconf1rmed, but adds to the general
uncertainty. Occasional unemployed
demonstrations in Glasgow, Stafford and
London are not significant.
PariS.-Banking difficulties and wide
spread Withdrawals of deposits have
conspicuously increased this week, with
hoardlng feature of the immediate
SITUATION. Banque Rationale de Credit
whose troubles were believed ended last
week when a consortium under the
iaoershlp of the Bank of France came
10 It's aid again, is in a precarious posi-
ZION. Depositors, still not treasured.
are continuing their Withdrawals until
| tney nave nearly exhausted the Censor
tlumS guarantee fund. The position of
the Banque de L'Union Parisienne ike
wise Is cause of concern. Failure of
Compton Lyon-Alemand, prominent
metal dealers, who were capitalized at
millions, has jeopardized their asso-
clated Firminy steel works. which en-
| ploy 10000 workers. Government In
prevention may be necessary.
| The business tone Is peSsimistic. in
generally taking a skeptical view over
developments In England and Germany
and being increasingly. concerned over
the growing domestic budgetary deficit.
august production figures show declines
Coal was down 10 per cent, pig iron
~. per cent, steel IS per cent.
Berlin.-With the political outlook
marred by the reconstruction of the
cabinet and reaSSembly of the Reichstar
| on october IL, German defense Of the
rapidly dwindling gold reserve has en-
tered the final decisive stage. Industry.
at the same time, has opened q new
wage cut campaign in an effort to meet
British automatic reduction Of real
wages by proportionate lowering Of
nominal mark wages.
Outflow Of Gold.
The financial setback, forecast in tina
Business Week September %, has been
accelerated by the British crisis and is
reflected now in the alarming outflow
of gold and foreign exchange from the
Reichsbank. Since September this
drain has reached a net total of rs
millions. The loss Is due primarily TO
% gaps In the previous foreign ex-
change regulations, notably the jncom.
plete control of proceeds on export
sales; ca repurchase Of their own de-
preciated gold bonds issued abroad BY
German corporations and heretofore not
prohibited; CD the retarded, but tSain-
terrupted, transfer Of proceeds on sales
Of securities on foreign account.
Dividend Changes.