Evening star., 1936-09-28
3NAT|ONS TOUN|TE|
MONETARY ACTION
U. S., Britain and France to
~-- Coordinate Working
of Funds.
BY the Associated Press.

Government monetary experts dis
closed today that Great Britain,
France and the United States will ef-
feet close. co-ordinated working
agreement for handling their stabili-
zation funds under the new monetary
agreement,
Secretary Morgenthau acted inde-
pendently of the other two nations
when he moved Saturday TO halt
downward sweep in the price of pounds
sterling. but officials said future ac-
tivities of the three countries will be
more closely integrated.
They explained that Morgenthau
used SIS ,0000 900 of the TreasuryE s2.-
o0e, 1000, 900 exchange stabilization fund
to buy pounds without consulting
Great Britain and France because he
wanted to act swiftly to halt the drop
of sterling and because exchanges in
Paris and London were closed.
The Government monetary experts
said handling of the three nations
stabilization funds will be co-ordi-
mated by the Bank Of England. the
Bank of France and the Federal Re-
Serve System.
These agencies will consult when-
ever any development in international
exchange might warrant the buying
or selling of currencies to prevent dis
turbances in exchange rates, officials
said. and will keep each other advised
Of any contemplated action.
The United States and Great Britain
had established stabilization funds for
the protection of their own currencies
long before the three-power monetary
accord was reached last week The
understanding provided for the estab-
lishment of such a fund by France.
Apparently to serve notice he would
not hesitate to protect currencies of
the three signatory nations, Morgen-
thau made public his use of the Treas
ury's stabilization fund in buying
100000 pounds he said we're Of
fered in the market by the Russian
State Bank.
Operations Kept Secret.
It was not expected, however, that
general policy of announcing such
operations would be followed in the
future.
Since it was set UP in 1884 oper-
ations of the Treasury,s stabilzation
fund have been a secret. Only once
before last Saturday had there been
any intimation of how or when it
was used. The other exception was
when this country went to the aid of
the franc last year.
Morgenthau told reporters that
pounds were bought at price which
would give the Treasury handsome
profit" and said the sterilization fund
also had made profits from operations
In the past
How much these amount to is not
known. however, and for this reason
none except high Treasury officials
know the exact amount in the sta
bilization fund.
Tenth in Working Account.
Thus far, only s200,0oo 900, or one
tenth of the fund has been placed in
working account" for international
exchange operations.
Morgenthau told reporters, however,
he was willing to go the limit" in
protecting the currencies of the three
HdtlOLIS dllQ tIldt tlie LIIllt was lWO
billion dollars"
Unless extended by Congress, au-
thority for maintaining the stabiliza-
tion fund will expire January 80.
Morgenthau said he will recommend
continuance Of the fund
"I certainly shall recommend that
It be continued" he said. "I know
Of no better insurance fund the
United States could have than the
stabiliza ton fund"
No Comment on Denial.
There was no official word from the
Treasury today on the Russian State
Banks denial that 1t offered / 1,000, 900
British pounds Saturday "at any
price" in an effort to depress Sterling's
Yalue
Pending some official utterance by
Secretary Morgenthau. officials said
the offering undoubtedly had the ef-
feet of driving down the pound.
The State Bank said in a statement
In Moscow yesterday that Morgen-
thsu's assertion that Russia was try
ing to weaken the pound sterling was
without foundation and q nonsensical
invention