Evening star., 1932-04-10
DRIVE ON DOLLAR .
BY PARIS SECUTED
France Would Be Loser if u.
S. Went Off Gold Standard,
Say Officials Here.
BY CONSTANTINE BROWN.

counted last night the rumors that the
French government or some important
French industrial or financial concern
was behind the new raid on the dollar
There can be no truth in those
rumors," it was authorttatively stated
because governments or big corpora
tons never act sentimentally and
france has much more to lose than to
gain, II America were forced of the
gold standard"
The rumor that the French govern
ment might be behind a new raid to
shake the confidence of the European
countries in the stability Of the Amer
lean currency had gained credence with
the publication by Partisan newspaper
OF story allegedly emanating from New
York that one Of the internationally
important American banks had gone
into bankruptcy.
This story, carried only by one ire
Sponslble French newspaper. created a
sensation III Paris and caused a drop
In American securities The American
embassy in Paris Immediately pro-
tested at the French foreign office al
though at the State Department it was
salo no Official action was contem-
plated from this side; in fact, the State
department was unaware that such a
protest had been lodged with the Quay
q OrSay; until Saturday noon, the Act
ing Secretary of State had received no
Official communication from Paris.
The French government, il was
stated last night in Washington. has
nothing to gain by any financial difi-
Guilty OF the United States. On the
contrary, it has to lose a good deal n
ard.
Sum Lost in Britain,
When the British Government was
compelled to suspend the gold standard
last Fall, the Banque de France is said
10 nave been unaware of the British in
tentions and is reported to have lost a
substantial amount of money in Great
Britain. This is unlikely to happen if
America follows Britains footstep. be-
cause the French National Bank is
watching eagerly the situation in Amer
lea and since last July the French gold
reserves and Short-term papers in this
country have been reduced from 81 $50
600, 900 to about $400,000000 These
Withdrawals, it Is explained, are not due
to any intention of the French to en-
barras5 the Treasury; in fact 1t cannot
do SO, because the amount Is too small
to actually worry the United States.
But the French government feels that
in these politically and economically
uncertain days it is wiser to keep its
precious gold at home rather than
abroad. Furthermore, the French COM
mitments in Europe are of such a ma
ture that France must have at mo-
ment's notice all the gold she may need
at any time.
But the French government while
striving to obtain a permanent political
and financial supremacy in Europe,
does not view with favor even the pos
sibility of America going off the gold
standard and consequently will never
agree to become a party 10 any cam
paign to precipitate sucn an action on
the part of the United States. The
principal reason for this is that France
realizes full well that If America S
financial power was impaired her eco
nomic and financial stability would be
much more jeopardized than that of
America. Her financial policy since the
Laval visit to Washington, it is said,
has been not to embarraSs this coun-
try by any precipitated gold with
draWals. Consequently it is inconceiv-
able that the French government could
in any way support or encourage any
drive against the dollar in Paris or
elsewhere.
Would Hit French Industry.
The big French Industrial organi-
cations, such as the powerful Steel Trust,
are still more anxious to keep the dol
lar at its present level. If the Ameri-
can Government decided to go off the
gold standard the French industry will
suffer heavily. With the present high
price Of the dollar the American indus
trialistS find it very difficult to compete
with the European manufacturers. But
If the American currency were depreci-
ated, many American products which
have been driven off the European mar
kets by high tariffs and the high value
of the dollar would again seriously
compete with similar European prod
ucts in spite Of the tariff barriers. This
has happened in the case of Great
Britain. Almost overnight the French,
the German and the American manu-
facturers found themselves confronted
with new competitor who, they had
hoped in the last few years, had been
disposed Of
The only plausible explanation offered
in Washington as to why certain French
newspapers have begun a drive against
the dollar is that these papers are serv-
Ing the interests of few unscrupulouS
spectators in Paris who are trying to
fish in troubled waters and make money
out of the uncertain situation caused
by the world depression.
The system of using sensational news
papers for stock exchange speculations
is easier in France than in Great
Britain or in the United States, because
the French libel laws are much more
lax than the laws in the English speak
ing countries.
Called Cabbage Leaves"
There always have been in France a
number of sensational newspapers,
called in French slang cabbage leaves, "
which have specialized in serving GER
tain unscrupulous interests. They are
not afraid OF the libel laws because the
fines imposed by the French courts in
certain serious cases, when these laws
can be invoked, are nominal and the
worst that can happen to the editor of
such a paper is to go to jail; and that
Is sometimes worth while when the
profits derived from the spreading of
sensational news are sufficiently large
to justify a holiday Of few months in
a French prison. The fine is never suf-
ficiently high to prevent the further
publication Of the paper.
1t is believed in responsible quarters
in Washington that the news that
America is going off the gold standard
and the publication OF the story that
a leading American bank had closed
it's doors has originated in certain
spectators quarters in Paris. The
news was out and the spectators were
able to reap a substantial harvest from
the depreciation OF the American stocks
before the story was oficially denied.
In the present state Of high tension
which exists in most capitals any bad
news is easily believed and the nervous
investors are always ready to dump
their stocks and take their loss This
is said to be the reason for the re-
peated attacks on the dollar.