Evening star., 1933-05-03
CURRENCY BATTLE
RACES ON BOURSE
France May Be Forced to
Place Embargo on Gold
for Protection.
BY PAUL SCOTT MOWRER.

BY Cable to The Star.
PARIS, France, May 3-With the
Paris Bourse, the worlds only remain
ing free gold exchange center, as the
battle-ground, the war OF currencles,
which has now been added to the tariff
and quota war, continued today.
The British, through their skillfully
manipulated equalization fund, and as
sisted by the recent loan OF francs by
London to the French treasury, show
every sign of their intention OF main
tanning the present margin between the
dollar and the pound.
No sooner does the dollar fall than
the British bring down the pound,
which, in turn, drags erratically after 1t
the currencies of most countries in the
so-called sterling bloc" Similarly,
when the dollar rises, the pound rises.
In terms of French francs, which
are now the only convenient gold meas
ure left, the dollar, before the United
States went off the gold standard, was
worth about $3.50 and the pound was
stable at around 81. Now, with the
dollar at 21.50, the pound is at "a.
Embargo May Be Needed.
The French are terribly worried. Some
experts think that it may be necessary
to place an embargo on gold here, too,
before long, else paper currencleS can
continue to buy real gold in France.
while France, because of embargoes, is
prevented from reciprocal operations
elsewhere. 1t would thus theoretically
be possible to drain off slowly Frances
gold without counterpart,
The British loan to the French
treasury is a sort Of temporary guaranty
against such maneuvers on Great
Britain's part, but this loan Is now being
strongly criticized here as giving Lon
don a sort of political hold over Paris
and forcing France into Great Britain S
economic scheme.
The French government finances leave
much to be desired. The budget is not
balanced, the floating debt is rising, the
treasury is empty and the local market
for government paper is saturated; so
that, in some respects, the British loan
was godsend to the treasury
At the same time there is beginning
to be a good deal Of imitation talk. For
the moment the government is strongly
opposed to this inflationist trend.
French investors, it is pointed out, have
already lost four -flfths CT their capital
in the previous imitation and the holders
OF government bonds were squeezed
again in the recent conversion.
Tariff Truce Held Joke.
1t is obvious, however, that. unless
France puts an embargo on gold and
let's the franc slip down a little, it
will be obliged, as defense against the
falling pound and dollar, to restore to
exchange surtaxes against British and
American goods.
French experts consider the Ameri-
can proposal for a tariff truce here a
joke in these circumstances. One in
f1uential expert goes further and sees
in President Roosevelt's plan a plot
against France. The United States,
he thinks, while maintaining its own
tariffs the highest in the world, will
try to force France to lower its own
tariffs and quotas in exchange for war
debt concessions at the very moment
when the falling dollar gives American
exporters the advantage
THUS once again." he adds, referring
to the Hoover moratorium, I'VE are fac
ing proposal which, under the colors
Of general interest, is really pursuing