Evening star., 1933-08-20
Unstable Dollar and French
Difficulties Stir Hope for
Leadership.
WEALTH OF EXPERIENCE
HELD STRONGEST POINT
Success Of Canadian and Australian
Loans Marks Beginning of New
Phase in Foreign Financing.
BY CLAUDE A. JAEGER,
Associated Press STAFF Writer.

LONDON-London is going quietly
and methodically about the business Of
regaining her place as banker to all the
world
1t was a severe blow to the prestige
Of the city-London's financial district
when England was forced off the gold
standard in Semptember, 1881, and it
was widely feared that the dollar would
replace sterling as the leading interna-
tional currency.
But with the United States now of
gold, and the value of the dollar un-
determined, the city sees no serious
threat from any quarter to its important
position in the world of finance
True, sterling is still off gold, and is
distinctly managed currency, but the
position of the remaining gold curren-
cies remains uncertain enough to pre-
vent Paris from taking the lead from
London. Furthermore, the French fis-
cal position. with the budget unbalanced
and new financing difficult, also tends
to thwart Paris's financial ambitions.
Caution Recognized.
London bankers recognize that In
vestors are still chary of foreign bonds,
and are likely to remain SO until world
conditions improve vastly, particularly
in the view of the several sad expert
ences of recent years. But British in
vestors have been trained by long years
of foreign lending to regard the vicis-
Situdes of foreign bonds somewhat
philosophically. in contrast to American
investors whose introduction to foreign
financing came only in the years since
the war, and covered that period Of
frenZied competition for foreign issues
by New York banks. On the whole.
British bankers think their foreign in
vestments have stood up much better
than American. although they have
and elsewhere.
London is beginning her new phase Of
foreign financing with the dominions.
and the city regards it as bright
feather in its cap that it has been able to
bring Canada back to this market after
she had transferred her financial ale
glance to New York in the postwar
years The heavy oversubscription for
the recent Canadian 5000, 900 loan
was received as distinctly hopeful
augury Other important operations
here include a f17,000,000 Australian
loan and $4,000 900 South African
refunding operation.
London's strongest point in interna-
tional finance Is her wealth of expert
ence. At the outbreak Of the World
War. when American foreign invest
ments were negligible, British invest
ments overseas were estimated at some
$4,000. 900 900. while French were only
some SO 00o, 900, and German about
$1,000, 900, 900. But in the postwar
years. while British foreign investments
increased but moderately, American
f,yv oh i1ty IN than
$4,000, 900 900, and If the war debts
were included in it. the total exceeded
$22, ,000, ,000,0 900.
Lives on Foreign Trade.
Foreign lending is far more important
to Great Britain than to the United
States. Inasmuch as foreign trade is
a much larger proportion of her busi-
ness In fact, she cannot live without
it, for the benefit of her trade with
India, she poured money into that vast
country, spreading railroads over its
great distances It was British capital
that built the railroads of Argentina,
and at an earlier day. it was an i'm
portant factor in driving steel rails
across the United States.
London has always welcomed foreign
branch banks, and the winding narrow
OIL CCGS VI IllC City diC Will
branches Of banking houses on the con-
tinent, from the dominions, and the Far
East Sterling had become such rec
ognized international standard of value
that bonds floated here commonly called
for payment only in pounds, with no
reference to gold, while bonds floated in
New York and Paris have commonly
called for payment in dollars and francs
of a definite weight and finenesS Of
gold
How rapidly London may resume its
former function of providing capital to
the world remains problematical. in
view of continued widespread unsettle-
ment. Bankers here say there is still
ro market save for bonds of the very
best rating. But London is choked
with short-term funds. Deposits of the
London clearing banks are at record
levels, close to $4,000, 100000 and up
q about 10 ner cent from q wear AGO