Evening star., 1932-12-30
ASSAULT ON GOLD
IS LAID TO BRITAIN
Action of South Africa Seen
Part of London's None.
tary Policy.
BY PAUL SCOTT MOWRER.

BY Cable to The Star.
PARIS, France, December 30-Aban-
donment Of the gold standard by South
Africa Is interpreted here as a striking
success for the British monetary policy
and new blow at the gold standard
countries. chief Of which, Of course. are
the United States and France.
That the principal gold-producing
country of the world should thus delib-
erately quit the gold standard Is con-
sidered q remarkable commentary on
the present condition OF the world.
"Great Britain" say French commen-
tators, "is preparing the world economic
conference In It's own way"
Yesterday six gold currencies still
held out" says one commentator To-
day there are only i've. Perhaps To-
morrow there will be only four. what
conclusion will country like Holland
draw from this South African moVe?
Bad Money VIII Dictate.
when currencies meet at the world
economic conference" says the news
paper Paris-Midi, bad money will dc
tate its will to money. which, being golo'
thought itself good
Great Britain's alleged efforts to or.
ganize non-gold countries and to spread
The movement away from the gold
standard during the last year have, OF
course. been carefully watched mere.
No such effort has been made, 1t Is re-
marked, to defend the gold standard as
has been made to break 1t.
It was hoped at the time OF former
French Premier Pierre LavaIs visit 70
washington that France and the united
States, as pillars Of the gold system,
would reach some sort OF financial
agreement. Not only this did not nap
pen, but an open quarrel over gold de-
veloped. France was accused OF raiding
American gold and Of trying to break
the American dollar.
This accusation seems to have over
looked the fact that, not France, but
Great Britain, Is the leader Of the move
ment against the gold standard and
also the fact that, according to French
authorities, If the dollar had slipped the
franc would have tumbled, probably
even the same day.
Why Withdraw Gold?
Why, then, II France obviously had
every interest to try to strengthen and
not weaken the dollar, did the Bank OF
France withdraw its gold from the
United States?
The Bank OF France, which is pri-
vate institution whose operations are
shrouded in professional secrecy, seems
to have taken q sort Of pride In never
explaining this apparent anomaly. Its
theory was that explanations, If any
should have been given by the Federal
Reserve Bank in the United States
with which 1t considers it was and is
On the friendliest terms.
1t is now possible, however, to present
from inside sources here the viewpoint
of the French Bank, which can be sum-
married. thus:
"The state Of the money market in
the United States was such that French
gold there earned no interest. The
financial policies Of Congress at the
time were not such as to inspire conf
dence. France had just undergone q
heavy loss on its London deposits. II
felt unable to risk another similar loss
especially under entirely profltless con-
ditions.
"Yet the greatest care was taken not
to hurt the dollar. All gold withdraw
ais were made in close technical agree
ment with the Federal Reserve Bank
Other European countries had already
withdrawn their gold before France be-
gan. Some of these countries. In order
to make a good impression on the
CONTINUED on Page 2, Column 6)