Evening star., 1935-03-03
POUND Comment
IS REFUSED HERE.
Officials Silent, but General
Opinion Is Drop Not
Alarming.

The fall of the British pound Is
being observed by officials here with
curiosity, but without perceptible
alarm. So far as it could be learned,
the administration has no information
concerning the causes or motives be-
hind the fall of the pound. Official
comment was therefore lacking, and
persons connected with the Treasury
and State Department were more than
ordinarily guarded in their informal
comment lest 1t be misconstrued as an
intimation of authoritative or consid-
cred evaluation of domestic and in
ternational potentialities. Not hint
was given of a thought of retaliatory
action by the United States.
A survey Of informal and semi
official opinion revealed three major
lines Of theorizing concerning the rea-
sons for the decline of the pound Two
were based on the supposition that
the fall is a deliberate act of policy
on the part Of the British govern
ment. The third interprets the decline
as the result of anticipation by hold
ers Of foreign balances in London that
Great Britain was planning or might
be forced to cheaper the pound at
some future date.
According to one hypothesis, the
cheapening of the pound is q con-
sidered effort by the national govern
ment In Great Britain to stimulate
British exports and strengthen its do
mestic political position. Many
economists here have felt for several
months that the British recovery
which began in the Fall of 1891 had
reached the end Of its rise and that
unless new influences were bright to
bear the decline which already had
appeared would continue.
British Trade Measures.
The departure Of the pound from
gold, which gave British industries
an advantage in the export markets,
was followed by the series of measures
to canalize British trade with the do
minions and with certain specified
nations through trade agreements and
to improve British agriculture. The
playing out Of these stimuli and the
fact that the protracted British
housing boom, which has kept her
construction industry in a state of
rather lively activity. appeared to be
heading downward, had led to con-
siderable speculation here as to whether
the national government had any
other positive policy Of recovery in
reserve.
That the British cabinet was slip
ping steadily in popular confidence
and that the general election which.
under the British practice would
have to come before the end of next
year. might we'll result in a labor
victory. have been borne home here
by many incidents. 1t was thought
altogether conceivable that IL the ma
tional government could produce
pickup in industrial activity for a
few months by further depreciation
Of the pound it would select such a
comparatively favorable situation to
call for another election, rather than
wait until the constitutional expira-
tion Of its term. when conditions
might be much worse.
A second hypothesis, informally ad-
vanced here today, also relates the
fall in the pound to a deliberate de-
termination of British policy. But
according to this. stabilization Of the
principal currencies is the ulterior
aim of the depreciation Of the pound.
1t was suggested in one quarter that
the British may be doing one or both
of two things:
Trying to encourage an invitation
to the United States to stabilize the
pound and trying to force the long
impending crisis in the gold bloc
countries. BY depreciating the pound
now. it was pointed out, the British
would be in a position in the event
Of stabiliZation conference to bar
gain for a favorable level for the
pound