Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-10-12
Redistribution of World Sup
ply of Metal Needed for
Reconstruction.
BANKERS POOL IN U. S.
is CALLED INITIATION
Paris Spectators View Believed
Due to Lack of Facts on Hoover
Economic Idea.
BY DAVID LAWRENCE.

The United States and France are
planning a collaboration which may
assist in restoring the gold standard in
Europe.
Arrival this week of experts from the
Bank of France to confer with the
officials of the Federal Reserve Bank in
New York is regarded here as almost
of as much Importance in an economic
sense as the discussion of international
policies between Premier Laval OF
France and President Hoover next week.
With France and the United States
possessing almost three quarters OF the
gold supply of the world. measures to
re-distribute that supply in way that
will not adversely affect either the
United States or France and at the
same time will help ultimately to bring
the British back on the gold standard
are essential steps in the reconstruction
process now going on.
Pool Called Imitation"
Within the last few days French spec
ulators in international exchange have
insisted upon regarding the bankers
pool announced in the United States
as imitation" and this has led to COM
ments in the French press which in
turn have caused Withdrawals of French
gold from America.
While the United States could send
back all of the $500, 100000 of French
gold held here and not impair the gold
reserves of this country-for it is esti-
mated that fully two billions of gold out
of the five billions held by America
could be exported without adverse eff
fectS-still it is considered desirable
that the outflow should be orderly and
in accordance with a well defined plan
of sterilization.
Just why the French commentators
should call the bankers pool q species
of imitation is explained here only on
the ground that the French press was
not accurately informed as to the scope
and purposes of the National Credit
Corporation. Imitation means the issu-
ance OF new currency against frozen or
slow assets. No new currency is to be
issued by the National Credit Corpora
ton. Two per cent Of the bank deposits,
amounting TO a revolving fund of $780,
10000, is actually to be loaned. Money
already in circulation is to be loaned.
No Need of Imitation.
There is no need of imitation in
America. for the banks which could bor-
row billions of dollars from the Federal
Reserve system and get currency In ex-
change for their gold on deposit actually
have not borrowed from the reserve
system at all. Indeed. the latest figures
show total borrowings to be in the
of only $3.50 100000.
1t Is precisely this kind of misunder-
standing which has led in the last few
days to bit of a run on the American
dollar that will be ironed out by the
presence here of the experts from the
Bank Of France. Today's lie Temps,
according to cables received here, be-
gins to set the French people straight
on the subject by declaring that the
dollar is eight times as strong as pound
sterling was and twice as strong as the
franc is today.
Nobody here was disturbed by the
false rumorS, but 1t did indicate the i'm
portance of still closer working ar
between the Bank of
France and the Federal Reserve sys-
TEN.
Partners In Huge Credit.
After all the French central bank
and American member banks are part
ners in huge credit granted Germany
and Great Britain, so 1t is natural that
the financial leaders at Paris and New
York will want to be in immediate touch
with each other in the shaping of fu-
ture policies.
Before the end of the present week
an understanding may be reached be-
tween the Bank of France and the Fed
eral. Reserve System as to plans for
cooperation in the ultimate redistri-
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