Evening star., 1936-09-26
Million Pounds
Bought by
Treasury.
PACT PLEDGE
is FULFILLED
Stabilizing Fund Is
Ready, Says
Secretary.
~ the Associated Press.

In Q sudden, swift move, Secretary
Morgenthau today poured $5,000,00o
Into the international exchange mar
ket to block what he said was q Rus
sian State Bank move to hammer down
tho value Of the British pound, and
soon afterward pledged the entire $2,-
000, ,000, 900 stabilization fund to the
mai1tenance Of the British, French
ara American currencies.
Morgenthau summoned reporters to
his ofice to announce he had acted
without delay to throw the Treasllry's
$4,000, 900, 600 stabilization fund be-
hind the pound in line with a Franco
British-American agreement pledging
the three nations to use appropriate
available resources" to prevent ex-
change disturbances in their cur
tencieS.
Cooperation Is Invited.
The three nations invited the "co-
operation" of other nations in this
policy, and Morgenthau said this Ma
ton trusts that no country will at
tempt to attain an unreasonable COM
petitive exchange advantage and
thereby hamper the effort to restore
moro stable economic relations"
The agreement, announced last
night, provides for devaluation of the
franc In what Treasury ofIicials de-
scribed as an important stride toward
currency stabilization.
In q formal statement today, Sec
retary Hull said the move should
greatly strengthen the prospect Of
stability in international exchange re-
lationships" and should result in
further strengthening the basic con-
ditions Of our domestic recovery"
Referring to what he called the
Russian move to depress the pound,
Morgenthau added:
II sincerely hope that this incident
will not be repeated"
Morgenthau spoke quietly, but in
tone Of deep earnestness.
He said he had been informed
shortly after exchange dealings started
in New York this morning that the
Russian State Bank had ordered the
sale Of 1000, 900 pounds "at any price. +"
Price Drops IL Cents.
The effect Of this was to drive down
sterling from $500 to $4s1, the Treas
ury chief said, at his first press con-
ference
He refused, however, to express an
opinion on what Russia might have
expected to gain from the move.
minutes after the first, Morgenthau
said he would 60 Ito the limit" to
maintain the stability Of the French,
British and American currencies.
Asked what the limit was, Morgen-
thau replied $4,000. .000, 900" - the
amount Of the stabilization fund.
Morgenthau's action in buying
pounds came after talks with Presi-
dent Roosevelt, but the Treasury chief
did not say exactly what conversation
he had with the Chief Executive.
Asked whether the Russian move
had dampened his hopes for the
monetary understanding, which had
been described as q "gentleman's
agreement" Morgenthau replied:
"As far Is the gentlemen are con-
eerned we are still gentlemen"
Another interrogator sought to
learn whether Morgenthau expected
any more efforts to depress the pound
or other currencies affected by the
horsepower agreement.
IF there are" he replied, I'VE are
ready"
Morganthau did not say at exactly
what price he bought the pounds, but
asserted that they were bought at q
price that gives the United States
Government handsome profit"
He said he received information
about the Russian oner about IS min
utes after New York exchange deal
ings started this morning and gave
(see MORGENTHAU, Page A-7)