Evening star. [volume] (Washington, D.C.) 1854-1972, 1935-03-03
Official Support Appears
Late in Day at London.
Plunge Is Checked.
FRENCH CIRCLES FEAR
new CUT IN DOLLAR
Chamberlain Stand on Stabilize
ton and Tardy Market Action
Arouse Uneasiness.
BY CLAUDE A. JAEGER,


NEW YORK, March 2-The worlds
chief monetary measuring sticks we're
jumbled like jack straws today as the
British pound fell to a record low in
Paris and to the lowest in more than
two years in New York.
World financial and trade centers
anxiously sought to learn whether it
was merely a furry in the foreign ex-
change markets, or whether England
had started deliberate program OF
depreciation in search of a new ad-
vantage in world trade.
Reassuring word came from London
late in the day, in the form Of reports
from THE City"-London' Wall Street
that the British equalization fund
had at last stepped into the foreign
exchange market to halt the plunge
of the British currency.
The huge British fund, created to
guide the course of the pound after it
was catapulted from the gold standard
three and a half years ago, shrouds
its operations in greatest secrecy, but
best informed financial circles usually
have a fair idea what it is doing. And
the reports from the city tended to
set at rest fears in leading money
centers that war" of depreciation
between the pound and the dollar
might be engendered.
Served to Depress Prices.
The pound sterling is the most i'm
portant of the worlds money measur-
ing sticks for international transac-
tiens, and many economists believe
that its decline in value after Septem-
Der, 1881, had a severely depressing
effect upon price levels in terms of
other currencies, and that it seriously
aggravated the economic depression in
the United States and elsewhere. The
United States attempted to even the
score by depreciation of the dollar.
So further drop in the pound, Wall
Street authorities said, could scarcely
be viewed with equanimity.
The decline of the English money
unit was accompanied by sharp rise
in the price of the two chief monetary
metals-gold and silver-in the Lon
don market The British capital is the
chief free market for gold, and the
yellow metal there touched an I'M
precedented price of 146 shillings l0l2
pence, equivalent to 1857 an ounce.
This reflected chiefly the decline in
the value of the English currency in
terms of gold.
But silver, affected by other factors
as well. advanced in leading markets
around the world. rising full cent in
New York to Sta cents an ounce, the
highest in seven years.
The pound declined cents in New
York to S477la, making a decline of
some 10 cents in little more than a
week and more than 16 cents since the
first of the year. 1t has recently been
holding around S4865s, its old parity
with the dollar before either was de-
valued, leading to hopes that the two
currencies might be definitely stabil-
lied at that level.
Paris Watches U. S.
Persistent depreciation of the pound.
it is felt in prominent banking circles
in Paris and New York, would even
tually force devaluation eff the French
franc and related currencies. But
what Paris worried about most was
that the decline in the pound might
prompt a further devaluation of the
dollar Substantially lower positions
for both the pound and the dollar
would make the present level Of the
European gold currencies untenable, 1t
was widely agreed.
Among cooler heads In Wall Street.
however, there was a pronounced
opinion that the drop in the pound
reflected nothing more than a for
eign exchange fury, prompted by an
adverse turn of economic and political
news from the British capital.
The hardness of the British equali-
cation fund in stepping in. however.
together with the remarks in the
House of Commons on Thursday of
Chancellor Chamberlain. who said
the time was not yet ripe for stabili-
cation, aroused some uneasiness over
the possibility that the British had
embarked upon a campaign to re-
duce the value of the pound. 1t was
we'll known that London would like
to see the pound lower in terms Of
the dollar.
Some of those Wall Street experts
who looked with deep suspicion upon
the lowering quotations for the British
currency suggested that England
might be acting to cheaper its money
at a time when it thought the United
States would be unlikely to retaliate.
1t was pointed out that the American
Treasury has big volume of refund
ing in the next six weeks, and pre-
Sumably would not want to see the
currency tinkered with until that Is
out of the way.