, 1935-02-28
NEW YORK
nv James

by James McMullin
Urgent-Quite q few OF the smart
llds-both here and abroad-were
set for q quick and easy cleanup "
the gold decisions had gone the 9TH
er way. They figured the 60 per cent
profit on their gold-clause securt-
les could be put to work at once
scooping up other investments ct
he temporary panic prices which
we're expected. That would have py-
TaIided their gains to startling pro-
portions when things snapped back
% norLal.
This doesn't mean that a majority
hing like it-wcre IN Oh the play.
rhe actual number OF those prepar-
lng TO shoot the works on this sys-
tenn was small. But the liquidation
Of g~old-clause bonds since the deciS-
ion was rendered gives striking evi-
dence that plenty CT money WIS in
volved. Speculative enrichment would
have been spectacular.
Keen New York observers believe
the public reaction to the picture
Of @ few shrewd traders making fab
ulous profits at the expense OF the
many might have engendered grave
political consequences. They also
figure the Supreme Court msEity
must have been aware or this angle.
It's noted that the five justices
who upheld The New Deal are al
rom New York. Boston or Phila-
delphis. The four diSSenters come
fTon the interior. The fasteners
were presumably better able to APP
praise accurately the gamble involv-
ed ana what II would mean II the
decision went the other way. Insid-
ers remark that their toughest Job
was to find logical reasons for a
step that was socially urgent
Damages-Ncw York b~itter-enders
are scouting around for an Ameri-
can living abroad on the income
from ~gOld~clauSe Liberties who Is
willing TO test the loophole offer
ed by the court for provable losses
due TO Reputation by Act Of Con-
Jress." If they find he will be
enriched with carloads Of bonds
.oaned from here in case the long
shct comes through. The idea is to
get something started in a hurry
before Congress shuts off this ave-
nue. Of escape.
Interested parties don't want the
test to be made by British or French
holders Of American bonds. They can
imagine nothing that would give
congress greater pleasure than TO
enact legislation squelching foreign
claims for damages.
FAnat1oing-Sec 'etary Morgen-
thau's new method Of raising fresh
funds with 6 and Q Tonths discount
bills instead OF bonds or notes took
Wall Street by surprise. Financial
sharps figure this departure means
three things.
i.-Government spending win not
be as prolific In the next few months
as is generally expected. A good deal
OF money can be raised In this way
with q minimum OF excitem2nt-but
II would take quite a while to u Il
into billions.
BY confining March and Aoril
financing 70 refunding operations
the treasury is sure Of getting Shs
cheapest possible rates for long-tern
i~sues.
3-The administration evidently
figures it's wiser not TO plan any
'arge-scale new financ'nv until aft
er congress has called 1t a year.
OFfset-A nurber % New York in
ve<trrs are interested in the new
baby bonds as n hedoe AGAINST their
commitments IN outstanding gov
eminent issues. The terms on
which the Treasury will purchase
the "babies"-plus the fact that
49, 80 ro~-t~a~~r9rah'a-is N
absolute guarantee that they can
not decline IN dollar value.
Some OF Wall Streets confirmed
nessimists are aporehensive that
federal issues traAed in the onen
market win deprec'ate AS and when
initiation takes hold. Assured gains
= 49, N-h'as would ha'n cf're' such
potential losses ard there will be
many subscriptions 10 the $4,000
limit on that basis.
France - Conservative resistance
ID Premier Elandin's forts 10 lib
~~-nii-e the p~rk ~ - - X w~-+h
watching. New York 1siders hear
there may be an explosion II Baron
Fdouard RotNschild and Senator
Francois de Wendel-French mum
i.ions kino-carrv out their threat
to resign from the banks Board OF
Reoents II the government continues
to force relaxation Of credit require
ments.
Rothschid ard de Wendell tie UP
closely with Colonel de la ROGUE
fiery head of the Facist Croix de
Ecu. So far this organization has
been remarkably quiet-but there's
- a--Fa-- - IA