Evening star., 1931-05-09
CHEAPER MONEY
MAY HELP EUROPE
Lower Rates Here Probably
Will Be Reflected in Re-
ductionS Abroad.

uuGlIUlIS HUI UduH
The world business leaders who are
here attending the convention OF the
International Chamber Of Commerce
were interested in the announcement
that the Federal Reserve Bank Of New
York had cut its rediscount rate to Ia
per cent the lowest in its history, as
we'll as the lowest in the history OF any
central bank in the world.
The British bankers were particularly
pleased, for to them 1t means that the
United States is using the rediscount
rate to force idle money into the bono
market as we'll as to keep the goIo
movement in the direction OF Europe
rather than in the direction OF New
York.
In the last IL months the United
States has increased its gold supply ny
nearly $3.50, ZOO, 900, and the gold pie
in use for credit issue stands at the all
time record figure of $4,743, ,000, 900.
Now that New York has reduced It's
rate it is expected that some OF the
European countries, especially Great
Britain and Germany and possibly
France, may follow with substantial re-
ductions. Today the British discount
rate is 3 per cent, while that Of France
is 2 per cent. Germany is higher with
a 5 per cent rate. The Bank OF 1taIy
has a 512 per cent rate and so has Hun
gary. Spain has s per cent rate'
while Poland has the highest In EUROPE
7A per cent. .,,.,, -o. .hor+-
term investment and the rates so low,
many bankers now believe that this ao-
ditjonal cut on the part Of the New
York bank will have a very favoraole
affect on the bond market IN the next
few weeks.
Germany did not relish the loea 0i
bringing up the problem OF the mool-
f1catIon of the reparation payments pc
fore the world business conference. But
;he was forced to do it because no nation
represented here would sponsor the
The German delegation, most infiu-
entail one at the convention, hoped tnat
llp to the very last the critical conol-
tion in Germany would force some otner
country to bring up this delicate ques-
tior. When every nation declined, the
C;ermans very forcibly called the atten-
tion of the world to their condition.
What will be the result no one can pre-
dict. but that the subject of reparations
and possibly war debts will receive
place in the resolutions is believed not
only possible, but probable.
Responsible German leaders here are
saving that Germany will be forced to
ask for a suspension Of payments some
time this Summer unless world business
conditions pick up in the meantime.
Floyd Chalmers of Toronto. editor OF
the Financial Post, spoke OF the difh-
culties which face country OF 10000
600 people spread out for $500 miles.
He told of Canada carrying on a world
trade with more than hundred differ
ent countries in which 1t has preferen-
tial tariffs with 20 British political
units and favored-nation agreements
with 43 other countries.
Canada's tariff is three-decker
affair. with the highest rates applying
to countries like the United States. with
which she has no trade agreement. The
next lowest rates are for countries such
as France Japan. Spain, Argentina and
Italy, with which she has favored
nation agreements. and the lowest rates
are for 90 British units, with which
Canada has preferential agreements.
On the subject Of whether the Brit
ish Empire integration would shift
Cansda's trade currents, Mr.. Chalmers
expressed doubt, for of Canada's total
foreign trade of $2.400 000. 900 last year,
so per cent was with the United States
and only about 20 per cent with the
British Isles, while less than 80 per
cent was with the British Empire as
whole.
Canada is making its own plans, en-
tirely independent Of Great Britain
and of other British possessions. The
Chalmers speech was a notice to the
world that Canada, commercially speak
M iN ~ u;flI a
free and independent country.
Who are the outstanding leaders of
this International Chamber of Com
merce convention? There are approx
imately FIVE hundred foreign delegates
and about seven hundred American
delegates and alternates.
DR.. Alberto Pirelli of italy Is con-
sidered among the leaders. His wide
and successful business experience have
made him an international figure.
Sir Alan G. Anderson. shipping mag
nate of Great Britain, has been WELD
ing much influence here. His speech
on the developments and direction Of
trade was one of the highlights of the
Prominent with him is
his colleague, Sir Arthur Balfour, steel
who, because Of his personal
acquaintance of many years with a
number of the delegates from the vari-
Gus countries, has been able to cover
a great deal Of ground.
George Theunis president Of the
chamber, must be in
cluded in this influential circle He
speaks English fairly well and knows,
by reason of his worldwide acquaint-
anceship in the field of business and
politics. most of the leaders present.
He is one of the hardest working dele
gates here.
Julius H. Barnes and Silas H. Strawn
are the two most active American dele
gates. Mr. Barnes has been for some
years chairman of the board Of the
United States Chamber of Commerce,
while Mr. Strawn of Chicago is the
new president of the Chamber Of Com
merce Of the United States as well as
vice president of the international
chamber. No one will be more pleased
and relieved when the gavel brings the
conference to a close today than these
leaders.
One American economist, watching
the proceedings, made this observation:
i think the reason why these Euro
pean business leaders are so effective
is that they are their own economists
They know from experience, and are
theoretical as well as practical. The
American business man hires his econo-
mist just as he hires his stenographer.
True, he does not always take his ex-
pert's advice, but when he gets into a
conference such as this he is handi-
capped because he does not understand
the theoretical side as well as he does
the t1rarticaIp