Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-09-22
i. S. is PLEASED
BY BRITISH MOVE
Administration Sees Relief
From Financial Strain in
Gold Suspension.
BY MARK SULLIVAN.


The struggle over the pound in Lon
don has, of course, been followed
infinitely by Washington. 1t was the
true occasion for the meeting of Presi-
dent Hoover with several members OF
his cabinet on Friday night, which
meeting, incidentally, outside of Wash
ington, was variously and rather anus
ingly attributed to consideration Of beer
and the bonus.
The present outcome in London was
ANTICIPATED here and the Judgment OF
Official washington about the result can
be seen clearly in the manner of relief
which officials had on Sunday after
noon. So long :; the struggle in Lon
don was on, Ia manner here was one
of strain ana suspense. With the
.--Suggle decided, and in the Judgment
vi Washington decided in the right way,
the manner is one of relief and of con-
fidence about the future both in Eng
land and in the world.
The strong judgment of the most
competent authorities in Washington all
along has been that it was mistake
for Great Britain to try to support The
pound, and that she made her initial
mistake which was one OF worthy
pride when she undertook to force the
pound back to par some seven years
ago.
Franc Allowed to Fall.
After the war France and Belgium
allowed their unit of currency, the franc
to fall to wherever conditions would
carry it. When the franc reached that
level, which was about one-fifth OF par.
France and Belgium let 1t stay there
-NE afa Al inn RI 10
and lowered valuation. Partly in con-
sequence of that course, France and
Belgium are today the two most pros
porous nations in Europe and with our
selves compose the three most f1nan-
cially stable nations in the world.
Great Britain, en- the other hand, at
that time forced the pound back to par
and for seven years has been under an
amending and unnatural strain to keep
it there Great Britain, in short, ami
mated by a fine pride and sense OF
tradition and a unique standard of
integrity, acted about the pound in the
spirit of Chancellor Snowden'S recent
quotation from the British poet SWIM
burne, Come the world against her,
England still will stand" 1t was mag
nificent but 1t was not business, and 1t
did not take account of the immense
burden of debt which Britain had taken
upon herself during the war. Keeping
the pound artificially at par put an
intolerable handicap on industry which
has held Great Britain back year after
year.
Britain's present receding from its
seven years holding the pound at an
artificial level is essentially long step
and courageous step in the funda-
mentally correct economic course OF let
ting the law of supply and demand have
its way. The judgment of Washington
is that Britain now, with the artificial
strain ended and with its currency at
its natural level, will enter a period of
enlarged prosperity. For the moment,
perhaps, the ramifications of a sud-
denly altered standard of value may
take eccentric directions Ultimately
and soon commodities should rise in
price Mortgages and bonds should be-
come easier to pay and all debtors viii
find their burdens easier.
Britain's decision to abandon the
effort to keep the pound on the gold
basis should have several wholesome
effects in the United States. Among
other things. it ends strain on New
York banks which was hurtful to Amer
lea, in business way, and would have
had, if continued, unhappy political
consequences.
Britain, as means of supporting the
pound, was borrowing some hundreds
of millions of dollars from New York
banks as well as from France. Had
she kept up the fight she would have
wanted to borrow more. The New
York banks have lately become aware
that they have serious and heavy re-
sponsibilities toward the interior banks
Of their own country.
Free to Help U. S. Banks.
There has already been complaint
80 t.
Midwest political and financial circles
to the effect that the New York reSer-
voir Of money has been tapped to the
extent of upward of a billion dollars
for the relief or prevention of banking
distress in Germany, England and other
European countries, but had not, up
TO late last week, so it is charged, con-
tributed to aid of banking distress in
the interior of our own country.
AS it has been put, There is a ma
ton Of 100000 people lying between
the Appalachians and the Rockies
which should be the first concern of
the New York financial community"
The feeling that credit, like charity,
should begin at home. had already
forced itself upon Great Britain. The
government now in power in Great Brit
ain has had to meet the charge that
the recent British crisis was caused in
part by the Bank of England's adj
vances last Spring and Summer to
Germany, Austria and other European
countries. A similar political COM
plant was beginning to arise in Amer
lea about the New York banks From
now on, the New York banks will be
more free 20 help our own interior
cities.
In ways too numerous to recite here,
the position of the New York financial
community will ultimately be greatly
increased by what has happened.
Among other things, they viii be re-
lieved Of making further advances to
Britain, and Britain, as part of her
present step, has undertaken to repay
her obligations to New York and in
other foreign countries in pounds at
the old gold standard.