Evening star., 1933-05-23
BRITAIN INTERESTED.
Currency Discussion at Washington L:
Watched Closely by London.

Currency Discussion at Washington Is
Watched Closely by London.
LONDON, May 20 P).-The currency
discussions proceeding in Washington
have created great interest in British
financial circles.
They expect the main outcome to be
a triangular stabilization agreement be-
tween the United States, France and
Great Britain to keep the dollar, pound
and franc from wide fluctuations during
the preparatory work and the actual
sessions of the World Economic Con-
ference.
They expect no such formal agree
ment before the Economic Conference
regarding currency and exchange as was
achieved by the tariff truce" initiated
by the United States.
The nature Of the monetary problem,
1t was pointed out, likely will prevent
any formal agreement in black and
white, as was the case with the tariff
truce.
Conversations between Montague
Norman, governor of the Bank of Eng
land. and DR.. Hjalmar Schacht, presi-
dent Of the German Reichsbank, over
the week end were considered a part
of the general negotiations.
o. M. w. Sprague was believed to be
Norman'S mouthpiece in Washington
because the later's efforts at disguise
and secrecy when travelling attract to
him such attention and publicity.
The outcome of the currency talks, it
was said, may be an informal under
standing among the central banks OF
the chief world powers working with the
Bank for International Settlements for
cooperative operation of the funds
available to the various governments
for stabilization purposes
This would not necessitate one central
stabilization fund.
1t was pointed out that such an
agreement will be essential If the United
States should establish a stabilization
fund such as that Great Britain has
employed for the past year. The fund
recently was increased from f150 ,000, 900
to f350,000,000.
If other countries should employ
similar funds and start operating them
without cooperation among central
banks, it was pointed out that the whole
available resources of any one country
could be swiftly wiped out and instead
of fluctuations in world currencies being
stabilized. they would be exaggerated.
The danger of speculation by profess
sional market operators was given as
the reason why secrecy regarding the
currency negotiations must be main
tainec
While the currency talks were ex-
pected to clear the air possibly by
means or arriving at some temporary
measures prior to the World Economic
Conference. there was no inkling from
ofhcial quarters here regarding the hxa-
ton of the ratio of the dollar to the
pound.
British authorities would like to see
the dollar in relation to the pound at
$3.50, because 1t would assist in main
tanning export trade. 1t was believed
American authorities favor the dollar
rate somewhere nearer 81.
Until this gap is bridged and definite
announcement made, uncertainty in the
city is not likely to be relieved.
In the meantime, the fear of the
recent banking credit to France and
equalization fund checked some specu-
lation.
Conflicting interests still are operating
in the market, however, as evidenced
last week end when the dollar rose and
offerings came forward and depreci-
ated 1t.
Some Of this business Of buying and
selling was traced to American sources
through Paris banks
According to the British viewpoint,
one reason why anything more than
efforts to prevent temporary wide
fluctuations of sterling cannot be made
is the uncertainty Of settlement Of the
war debts problems