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The Financial SituationTHE President at Hyde Park yesterday madepublic a letter he had dispatched on Sept. 2 toRoy W. Howard, of the Scripps-Howard newspaperchain, in response to one he had received from Mr.Howard late in August. Mr. Howard had apparentlygiven the President an opportunity, which waspromptly seized, to present to the public anotherapologia pro vita sua. The business communitywhich for some time past has been hoping for someencouraging statement and fearing utterances of an-other nature by the Presi-dent, has not unnaturallyseized upon this letter withgreat avidity.The President again pays

his respects in character-istic phrases to the Philis-tines who oppose his pro-gram, but in the existingcircumstances these sen-tences may perhaps beignored, difficult as it isto escape a feeling of irrita-tion at what once againseems to be the attitude ofthe President that thosewho disagree with him areignorant, stupid, or worse.But since there are some"critics who are honest andnonpartisan and who arewilling to discuss and tolearn," the President be-lieves that he owes a "posi-tive duty to clarify ourpurposes, describe ourmethods and to reiterateour ideals." To these objec-tives he presumably devotesthe remainder of his ratherremarkable letter.As to ideals, they are set

forth in the followinglanguage, which only inwords is in any sense new."As spokesman for thesepurposes I pointed out(three years ago) that itwas necessary to seek awise balance in Americaneconomic life, to restoreour banking system topublic confidence, to pro-tect investors in the securitymarket, to give labor freedom to organize andprotection from exploitation, to safeguard anddevelop our natural resources, to set up protectionagainst the vicissitudes incident to old age andunemployment, to relieve destitution and sufferingand to relieve investors and consumers from theburden of unnecessary corporate machinery."Mr. Roosevelt evidently feels it necessary to offer

a defense of recent tax legislation. The fine phraseshe uses for the purpose are, however, not likely toconvince anybody not unduly susceptible to themagic of soothing words. We may therefore pass at

once to other and more important portions of theletter. We find among these latter an assurance tothe effect that the basic legislative program of theAdministration "has now reached substantial com-pletion and the breathing spell of which you (Mr.Howard) speak of is herevery decidedly so." Therefollow further iteration of the President's beliefthat conditions are now substantially better thanthey were at an earlier date, and that "at thismoment conditions are such as to offer further

substantial and widespreadrecovery." Much emphasisis laid upon "confidence,""not merely confidence ofa small group, but thatbasic confidence on thepart of the mass of ourpopulation," in all thislatter discussion. Therefollows a paragraph inwhich tribute is paid to theAmerican social and eco-nomic system, approvinglyquoting for that purposethe following sentence fromMr. Howard's letter:. "With all its faults andwith the abuses it has de-veloped, our system has inthe past enabled us toachieve greater mass prog-ress than has been attainedby any other system onearth. Smoke out the sin-ister forces seeking to deludethe public into believingthat an orderly moderniza-tion of a system we wantto preserve is revolutionin disguise."So much for soothing .

generalities. The time isopportune for realisticanalysis of these sentencesin the light of the situa-tion as it actually exists.As to the statement ofideals, it may be dismissedwith a reminder that faithwithout works is dead.Vaguely worded objectivesare unimportant in com-parison with the nature andprobable results of pro-

grams adopted allegedly for the purpose of attainingstated objectives. Glowing tributes to "Americansystems" are, of course, to be placed in the samecategory, as are such assurances as the Presidentgives about "business interests" being wholly inharmony with "mass interests."

This leaves only two questions for discussion:(1) are the programs, legislative and administrative,that have been adopted and which are being carriedforward at present reasonably well-designed for thepurpose of attaining the fine objectives set forth bythe President? and (2) just what significance is to

Financially UnsoundMayor La Guardia early this week, as was

expected, signed a measure previously ap-proved by both the Board of Estimate andthe Board of Aldermen of the City of NewYork, providing for a popular referendum onthe question of whether the city shall em-bark upon a project involving the expendi-ture of some $49,000,000 for a municipal powerplant to duplicate an existing privately-owned plant and to compete directly with it.Just before signing the measure the Mayor

listened to the protests of a number of well-informed business men who believe, as sensi-ble men must, that such a procedure on thepart of the city would be exceedingly unwise.Among these was former Judge Proskauer,speaking technically for the ConsolidatedGas Co., but in fact expressing the opinionheld by all forward-looking citizens, whosaid, in part:"If you had to look to private capital to put

up the money for this project, I think there isnot a man, including yourself, who doesn'tknow that you couldn't raise a nickel for thisproject on this basis, because it is financiallyunsound."The Mayor was furthermore reminded of

the immense funds that New York City hasalready in unprofitable investments such asthe subways, Staten Island docks, and theFloyd Bennett Field, all of which are nowdirectly or indirectly represented by obliga-tions of the city, upon which the taxpayersand not the enterprises themselves are payingthe interest.With studied disregard of such good advice,

the Mayor, promptly upon completion ofopposing arguments, proceeded with a flour-ish to sign the measure. It is now encum-bent upon the people of the city to defeatthe project so overwhelmingly as to put anend, for a long period, at least, to all suchsemi-socialistic proposals.

If this project were an isolated case, thematter would hardly warrant national atten-tion, large as the City of New York bulksin municipal finance. Such, however, is notthe case. On the contrary, it is but one localmanifestation of a nation-wide movementsponsored by the present Administration atWashington. We can only hope that thepeople throughout the country will them-selves put a definite end to this movement,as they unquestionably can, whether theyhave the opportunity to vote upon such pro-posals directly or whether they must dependupon less direct means.

Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

1484 Financial Chronicle Sept. 7 1935

be attached to the President's assurance that thebusiness community will now have a "breathingspell?" The first is an old, old question aboutwhich the thoughtful business man has long had hisown opinion. There is not a line anywhere in thePresident's letter to Mr. Howard that ought tochange, or is likely to alter, sensible conclusionsalready reached on this question. Our own belief,as our readers are well-aware, has been and still isthat what the Administration has done, so far fromachieving the results for which the President says heis striving, will do great injury, and indeed is alreadydoing great injury, to both the masses concerningwhich the Administration is so solicitous, and to thebusiness man, whose real interests the Presidentcorrectly says are in the long run as one with thoseof the rank and file.Now as to the promised "breathing spell." First

let it be clearly noted that what the President saysis that his legislative program has reached substantialcompletion. We shall, of course, have to assume withwhat confidence we can summon that he will not takeadvantage of the reservations made with the word"substantial" to come forward at some eleventh hourin the future with wholly unexpected legislativeprojects as he did this past summer in the matter ofthe so-called "soak-the-rich" tax measure. Butsuppose that no further legislation of basic importanceis brought forth next year. Where does this leavethe business community? Certainly with a veryunsatisfactory sort of "breathing spell" ahead of it.The public utility legislation just taken to thenational statute book has been found upon closeexamination virtually to deliver the industry over tothe Securities and Exchange Commission and theFederal Power Commission to do with what theythink best, assuming that the courts uphold the lawin all of its extreme provisions. The banks of thecountry have a similar problem on their hands as aresult of the Banking Act of 1935. Not only is theSocial Security Act full of similar uncertainties, whichcan in the nature of the case be eliminated only withthe passage of time, but the program thus laid outis utterly new to our American system, and in degreeat least to the entire world. Numerous governmentalofficials and administrative bodies are now endowedwith heretofore unheard of powers as a result ofrecent or earlier enactments for which the presentAdministration is responsible. If uncertainty as towhat new laws are likely next to be enacted has inlarge measure been removed at least for the timebeing, it has been replaced by about equally trouble-some obscurity as to what those entrusted withsweeping powers under laws already adopted will do.The business man will of course make up his own

mind what he thinks of this letter of the President.For our part, we find it singularly void of anythingbasically reassuring.

The Week's Developments

MEASURED in concrete developments the pastweek has been relatively uneventful. ThePresident has signed a number of measures thateverybody knew he would sign, and vetoed a numberOf unimportant bills, accompanied by formal state-ments which few, probably, have taken the trouble toread. The Treasury succeeded in obtaining liberalsubscriptions for an offering of $500,000,000 short-term notes, a type of obligation long in favor among

investors, but its offering of longer-term obligationshas not been cordially received. The Central Han-over Bank & Trust Co. and the Bankers Trust Co.,both in New York City, have given public recogni-tion to low earnings and the probable burdens ofthe Banking Act of 1935 by reducing dividends,while another banking institution of first-rate im-portance, the Guaranty Trust Co., also of New York,continued its regular dividend without change.

Trade reports as a whole have been indecisive, aswas to be expected immediately after the holiday,while the stock market, except for what appearedto be the results of professional operations late inthe week, continued to remain in a somewhat un-certain state of mind. Some improvement in thebond market was also recorded late in the week,but there was little to indicate that the rank and fileof investors, or even institutional ones, have becomemore willing than they have been in the past topay the very high prices that had until quite recentlybeen asked for strictly first-grade bonds. One ofthe large utility company systems issued a some-what optimistic letter to its stockholders a day orso ago, but was careful to state plainly that the newFederal law was not only an extreme, but a verycomplex, one, and that the officials of the companyhad not as yet been able to acquaint themselves fullywith all of its terms.

New Financing Less Active

ACCORDING to the registration statements filedwith the Securities and Exchange Commission,two plans, both of utility companies, for furtherpublic corporate financing of importance have come tofruition during the current week. For some weeks pastthere have been evidences that the market was ratherreluctant to absorb new offerings of substantial pro-portions, even where the issues offered were destinedto replace existing securities, at prices as high as hadon most occasions been named on new issues. Suchimprovement as has taken place in the bond marketduring the past day or two does not seem to have rem-edied this situation in any really convincing way.Taken as a whole, therefore, the financial com-

munity during the past week has seemed to pursue apolicy of watchful waiting, devoting its time for themost part to study of the situation by which it isfaced, and appraising the outlook for the autumnand winter months. Conclusions on the part ofthoughtful observers, so far as they have assumeddefinite form, are still rather largely of the a prioritype, and rest for the most part either directly orindirectly upon what is believed likely to be theeffect of continued Government spending on the onehand, and the practical results of recent legislationand forthcoming Administration policies on the other.There is considerable speculation upon what thePresident may have to say in addresses he is expectedto deliver during the next few weeks, and the hopeis expressed in some quarters that in the publicreaction to whatever he has to sayparticularly ifhe continues his habit of uttering harsh criticisms ofbusinessthere may be found a useful clue to thetrend of public opinion.The President's letter to Mr. Roy Howard, to

whic i we have referred, may or may not offer a clueto what he will have to say later. At any rate it istoo early to guage the reaction of the public to itscontents.


Volume 141

The "Farmer's Tariff"

THE Secretary of Agriculture in Washington onWednesday, after having completed an extensiveWestern tour, had some things to say to the pressthat were distinctly irritating to a number of businessmen, and to which they were inclined to attach con-siderable importance, the more so since they morethan half suspected that what the Secretary had tosay revealed a part of the general political strategyof the Administration in certain respects. Mr.Wallace told the reporters that he found Westernfarmers becoming "educated to the idea" that theprocessing taxes, coupled with benefit payments,were the "farmer's tariff," adding, according to pressdispatches, the following significant sentences:"The Middle West has always favored high pro-

tective tariffs. I have never been enthusiastic forthe idea and have fought it for ten years. Butthroughout the West there is a growing convictionthat the farmer is as much entitled to protection asthe industrialist."The farmer is getting that protection now, in lieu

of foreign markets for his products, in the form of theprocessing tax. If it is found that this method ofbringing social justice to the farmer cannot be con-tinued, he will begin immediately to look around forsomething else. If the substitute cannot be found, heprobably will seek a lowering of tariff rates and there-fore prices on the things he buys."To this Mr. Wallace added a number of other

observations that appear to be not without signifi-cance. Among them was a statement to the effectthat merchants and others depending upon the farm-ers for a living were increasingly sympathetic to thecurrent farm subsidies in the form of benefit pay-ments. Another was that he found substantialsympathy in the West for constitutional changes toremove legal difficulties (if they are made permanentby the Supreme Court) in the way of the present sys-tem of collecting processing taxes and turning theproceeds over to the farmer. Of course, statementssuch as these can very easily be construed, as manyare construing them, as warning to industrial inter-ests concerned with a continuance of existing exces-sive tariff duties that they would be well advised tocease their objections to the processing tax, or evenas a hint that the Administration, if balked in thesematters, may presently come forth as an advocateof sweeping tariff reduction. How just this inter-pretation of the remarks of the Secretary is, we ofcourse cannot venture to say at this time. Thisofficial has, on paper at least, been a rather consis-tent doubter of excessive tariff theories for a numberof years. What we do know is that we should bemuch better pleased if he had expressed the view(which we have no idea he holds) that the processingtax-farm benefit system is even more iniquitous thanour ultra

-protectionism of the past decade or two,and that what is needed is that both should forth-with be abolished.

The Budget

BOTH the Secretary of the Treasury and the Pres-ident meanwhile have given utterance to state-ments which in other days doubtless would have hadmore effect than they seem to have had in fact, andthan they really deserve to have. The President, athis home in HydePark on Wednesday, in announcingan order placing the last of a list of twenty agencies

Financial Chronicle 1485heretofore independent of such "control" under theso-called Budget and Accounting Act of 1921, re-marked rather vaguely that the "emergendy peak"had passed, and that these agencies would henceforthact more as administrative bodies, with the expecta-tion that their staffs could be reduced in the future.The President has long ago seen to it that the Di-rector of the Budget is wholly amenable to sugges-tions from the White House, and obviously a billiondollars wastefully spent by an administrative bodyis just as harmful as a like amount similarly dis-bursed by any other Government agency. As to sav-ings that may be effected by reductions in personnel,they are not likely to be large enough to be foundamong the astronomical budgetary figures of to-day.The Secretary of the Treasury is described in an

Associated Press dispatch of Thursday as lookingover the first .two months of the current fiscal yearand concluding that "we are within the President'sbudget." This official is then pictured as again fall-ing back upon the old theory of "recoverable loans"made with public moneys, in which such loans arededucted from expenses before computing the realdeficit for the period. In this way it is found possibleto reduce the official deficit for the first two monthsof the year from $672,000,000 to $427,000,000, andto add that at this rate the "deficit" for the yearwould be only about $2,500,000,000 against the "Pres-ident's budget" showing a deficit of $4,000,000,000.Of course all who have cut their eyeteeth in suchmatters will take this talk about recoverable loanswith a grain of salt, especially since the recent reportof a special Senate Committee on the financial expe-rience of the Grain Stabilization Corporation, andno one has ever supposed that the Treasury wouldnot remain within the estimates of expenditures setforth by the President. The Secretary is said to haveconcluded that "the more you go into it for the firsttwo months, the better it looks." It seems to us thatthe more one studies the whole budgetary situationof the country the worse it looks. It is a source ofsome encouragement that the financial community isat length also quite generally taking this view of thematter. So long as it was inclined to take theseenormous deficits as a matter of course, there seemedlittle hope of ever ending them.

Federal Reserve Bank Statement

REVERSAL of the recent upward trend of mem-ber bank excess reserves comprises the mainitem of note in the current condition statement ofthe 12 Federal Reserve banks, combined. A sharpbut seasonal increase of currency in circulation,coupled with Treasury withdrawals of funds fromthe member banks, operated to reduce such excessreserves by $110,000,000 in the week ended Wednes-day. It is officially estimated that the aggregateof reserves over requirements was $2,670,000,000 onSept. 4 against $2,780,000,000 on Aug. 28. Thischange, of course, does not affect the fundamentalposition, which remains one of grave concern to allinformed members of the financial community. Thedecline of European gold currencies to the gold ex-port point suggests that the United States soon maybe the recipient of additional floods of the yellowmetal, even though our supplies are excessive. AsNational bank notes are retired from actual circula-tion, moreover, the Treasury will find it necessaryto deposit additional gold certificates with the Fed-eral Reserve banks. Such developments again will



tend to swell the already enormously exaggeratedtotal of reserve deposits and excess reserves. It isto be noted, incidentally, that the recently enactedBanking Act provides for an increase of reserve re-quirements in the event of any credit control emer-gency, but there is no more expectation of a realuse of that new power than there is of any liquida-tion by the Federal Reserve banks of their openmarket holdings of United States Governmentsecurities. The potential dangers of the credit situa-tion cannot be sufficiently emphasized.Although additions to the monetary gold stocks

of the country amounted to $12,000,000 in the weekcovered by the current statement, the Treasury re-frained from depositing any gold certificates withthe Reserve System. This merely means larger de-posits at some future period. The gold certificates,which now represent the interest of banks in thegold stocks, dropped slightly to $6,481,634,000 onSept. 4 from $6,482,231,000 on Aug. 28. The holidayand seasonal drain of currency caused a recessionin "other cash" of the Federal Reserve banks, andtotal reserves thus receded to $6,708,082,000 from$6,729,762,000. Total money in circulation advancedno less than. $77,000,000, and much of this was ac-counted for by Federal Reserve notes, which movedup to $3,413,933,000 from $3,352,057,000. Treasurywithdrawals of war loan deposits from member banksand cash payments by the banks for new Treasurysecurities both operated to reduce the reserve de-posits of member institutions. Such deposits fellto $5,288,147,000 on Sept. 4 from $5,346,437,000 onAug. 28, while Treasury deposits with the Reservebanks on general account advanced to $103,062,000from $49,877,000, despite heavy outlays. Other de-posits decreased, and total deposits fell to $5,524,-355,000 from $5,608,865,000. While deposit liabili-ties declined, circulation liabilities increased, and

- as there was a decrease in reserves the ratio fell to75.0% from 75.1%. Discounts by the System weremoderately higher at $10,708,000 on Sept. 4 against$9,409,000 on Aug. 28. Industrial advances reflectedrepayments on a greater scale than new loans, and .the total receded $17,000 to $29,430,000. Open mar-ket bankers' bill holdings were quite unchanged at$4,685,000, while holdings of United States Govern-ment securities fell $118,000 to $2,430,213,000.

Business Failures in August

BANKRUPTCIES in business lines have beenrelatively few in number and for a smallamount throughout most of this year, and the recordfor the month of August shows no important change.There were in the United States during that month,according to Dun & Bradstreet, Inc., 910 businessfailures, with total liabilities of $17,845,596 against931 similar defaults in July for $20,446,761 of in-debtedness, and 929 reported in August last yearowing $18,459,903. The variation in this record isvery trifling. The fact is that such has been thecase for the past 18 months. The low point wastouched in September of last year, and the highpoint in January. Even the records for the last twomonths were not very wide apart. Business failuresin January are usually more numerous than in anyother month of the year, while in September thenumber is at the bottom.For the eight months of this year the number of

business failures was 8,109 and the liabilities $148,-573,198. This was the lowest record for that period

since 1920. For the same time in 1934 there were8,418 similar defaults recorded, involving liabilitiesof $189,589,280. How greatly conditions havechanged is shown by the report of 1932; for in thefirst eight months of that year there were 22,825business failures in the United States with liabilitiesof $701,505,139.

Separating this year's record by branches of busi-ness, it is shown that the smaller retail dealer con-tinues to contribute most heavily to the number ofinsolvencies. For the month of August there were557 defaults in retail lines, the total amount of lia-bilities being $5,035,217. These failures in the retaildivision constituted 61.3% of all failures in thatmonth. In August of last year there were 518 de-faults among retail dealers for $6,062,433, the ratioto all failures in that month being 55.8%. In themanufacturing division in August this year 197failures occurred, for $5,853,045 against 237 a yearago, involving $7,489,195 of indebtedness.' Therewere 91 defaults among wholesale dealers in Augustthis year, owing $1,819,945, and 65 classified asagents and brokers, for $5,137,389 of liabilities; thefigures for the last two divisions a year ago were,respectively, 79 and 95, and the indebtedness$1,506,964 and $3,401,311.By geographical sections the improvement that

appeared in the August figures as compared with ayear ago was mainly in the East. Separated byFederal Reserve Bank Districts, there were foursections where failures were fewer last month thanin August of last year. These four districts wereBoston, New York, Richmond and Kansas City.For each of them the decline was quite marked. Onthe other hand, quite an increase appeared in thePhiladelphia district, as well as for that of Cleve-land and San Francisco. For Chicago and Minne-apolis, the figures were also higher. In the South,outside of the Richmond district, more failures oc-curred, the St. Louis, Atlanta and Dallas districtseach showing higher records.

The New York Stock Market

TRANSACTIONS in stocks on the New Yorkmarket this week reflected a resumption ofthe optimism that has been current, intermittently,for approximately five months. The hesitation thatappeared last week still was in evidence at the startof the business week, but it gave way to extensivebuying in most parts of the list, and substantialgains are to be recorded for the week as a whole.It is now quite obvious that the war scare in Europeand the partial failure of the Treasury offering of$106,000,000 Federal Farm Mortgage Corporationbonds last week occasioned the uncertainty that wascarried over into the first session of the current week,on Tuesday. The holiday atmosphere also contrib-uted to the hesitation, and this aspect of the situa-tion was not unusual, for the Labor Day suspensioncan be counted upon to produce such results. Thesession on the New York Stock Exchange last Satur-day was dull, with prices steady. Monday, of course,was a holiday. When trading was resumed on Tues-day no especial activity developed, for there wasstill a good deal of uncertainty regarding the Euro-pean situation and the trend of United States Gov-ernment securities. Total transactions were lessthan 1,000,000 shares, and most issues drifted mod-estly lower. Amusement shares furnished the con-spicuous exception, these issues moving sharply


Volume 141 Financial Chronicle 1487higher on reports of excellent attendance at theaters.During much of the session on Wednesday prices didnot vary much, but in the final hour a sweeping up-swing developed. Cancellation of an Ethiopian oillease to American interests was accepted as anassurance that the United States will not becomeinvolved in any European conflict, and there alsowas a better feeling regarding Treasury obligations.The early uncertainty was overcome in the last hour,and motor and steel stocks led an advance that tookin also railroad and many other groups. The ad-vance was continued on Thursday, with New Yorktransit stocks in heavy demand on rumors of unifica-tion progress. Electrical equipment, steel, motorand other industrial stocks likewise moved forward,and numerous new highs for the year appeared.Transactions again approached the 2,000,000 sharemark. The activity was well sustained yesterday,and prices again improved virtually throughout thelist. Increase of the General Electric dividend stimu-lated the list, and gains were pronounced in indus-trial stocks, while railroad issues also improved.Transfer of a seat on the New York Stock Exchangewas effected yesterday at $120,000, an increase of$15,000 over the last previous transaction.In the listed bond market United States Govern-

ment securities held attention. The uneasinesscaused by the partial failure of the guaranteed offer-ing last week was not easily dispelled, and move-ments were jerky and irregular Tuesday and Wednes-day. Announcement by the Treasury on Tuesdayof refunding terms applicable to $1,250,000,000 calledFourth Liberty 414% bonds, and an offering of $500,-000,000 notes for new money contributed to the un-certainty. When it appeared that the note issue fornew money had quickly been oversubscribed, con-fidence gathered and the trend of the market im-proved. Highly rated corporate bonds held steady inthe face of the general uneasiness, while speculativebonds joined in the advance of quotations noted onthe stock market. In the foreign dollar bond de-partment most movements were toward better levels.In the commodity markets trends were somewhatbetter this week, although levels were lowered atfirst. Gains appeared in most grains and otherstaples during the latter half of the week, and thesemovements aided the share market perceptibly.Foreign exchange dealings suggest that Europeancapital once again is moving to this side of the At-lantic, possibly because of the fears of general Euro-pean complications from the Italo-Ethiopian im-passe. All the gold units of Europe drifted down-ward, and levels were reached that indicate a renewalof the gold flow to the United States. Sterling ex-change likewise was under pressure and slipped tolower levels, but one apparent reason for the declineof sterling was a cessation of silver buying in theLondon market by the United States Treasury.

Dividend declarations for the week continue forthe most part favorable, and include the GeneralElectric Co., which declared a dividend of 20c. ashare on the common stock, payable Oct. 25. Thiscompares with distributions of 15c. a share made ineach of the six preceding quarters. The AmericanAgricultural Chemical Co. took similar action andincreased the quarterly payment on its capital stockfrom 50c. a share to 75c. a share, payable Sept. 30.The Borg-Warner Corp. likewise increased the quar-terly disbursement on the common stock to 50c. ashare, payable Oct. 1. Dividends of 371/2c. a share

were declared in the two previous quarters. TheSafeway Stores, Inc., took adverse action on its nopar common stock by reducing the dividend paymentfrom 75c. a share to 50c. a share, payable Oct. 1.On the New York Stock Exchange 110 stocks

touched new high levels for the year and 19 stockstouched new low levels. On the New York CurbExchange 54 stocks touched new high levels and 7stocks touched new low levels. Call loans on theNew York Stock Exchange remained unchanged at14%, the same as on Friday of last week.On the New York Stock Exchange the sales at the

half-day session on Saturday were 491,280 shares;Monday was Labor Day and a holiday; on Tuesdaythe sales were 904,080 shares; on Wednesday,1,000,740 shares; on Thursday, 1,891,670 shares, andon Friday, 2,153,840 shares. On the New York CurbExchange the sales last Saturday were 131,970shares; on Tuesday, 179,415 shares; on Wednesday,191,240 shares; on Thursday, 330,510 shares, and onFriday, 423,680 shares.The stock market the present week, after periods

of dulness and irregularity, resumed its pre-holidayspirit and closed the week with an improvement involume of trading and prices. Genei al Electricclosed yesterday at 3234 against 307/8 on Friday oflast week; Consolidated Gas of N. Y. at 2914 against281/8; Columbia Gas & Elec. at 131/8 against 117/8 ;Public Service of N. J. at 425/8 against 401/2; J. I.Case Threshing Machine at 7714 against 6834; Inter-national Harvester at 56 against 541/8 ; Sears, Roe-buck & Co. at 58% against 55; Montgomery Ward &Co. at 357/8 against 34; Woolworth at 621/8 against'617/8, and American Tel. & Tel. at 1401/8 against1351/2. Allied Chemical & Dye closed yesterday at161 against 161 on Friday of last week; E. I. du Pontde Nemours at 121 against 117; National Cash Regis-ter A at 171/8 against 161/8 ; International Nickel at2914 against 291/8 ; National Dairy Products at 15%against 151/2; Texas Gulf Sulphur at 3434 against343%; National Biscuit at 28% against 28:14; Conti-nental Can at 8514 against 82; Eastman Kodakat 15114 against 147; Standard Brands at 1334against 13%; Westinghouse Elec. & Mfg. at 72%against 65%; Lorillard at 247/8 against 24; UnitedStates Industrial Alcohol at 447/8 against 42;Canada Dry at 97/8 against 9%; Schenley Distillersat 351/2 against 3414, and National Distillers at311/8 against 29%.The steel stocks yesterday recorded substantial

gains over the close on Friday a week ago. UnitedStates Steel closed yesterday at 461/2 against 431/2 onFriday of last week; Bethlehem Steel at 391/2against 37%; Republic Steel at 19% against 181/2,and Youngstown Sheet & Tube at 27% against 25%.In the motor group, Auburn Auto closed yesterdayat 3534 against 3314 on Friday of last week; GeneralMotors at 4514 against 42%; Chrysler at 6878against 611/2, and Hupp Motors at 17/8 against 174In the rubber group, Goodyear Tire & Rubber closedyesterday at 2014 against 19% on Friday of lastweek, and B. F. Goodrich at 9 against 8%. The rail-road shares also moved to higher levels at the closeyesterday as compared with Friday of the previousweek. Pennsylvania RR. closed yesterday at 29against 27 on Friday of last week; Atchison Topeka& Santa Fe at 523/8 against 4834; New York Centralat 2514 against 22%; Union Pacific at 100 against991/2 ; Southern Pacific at 20 against 1814 ; SouthernRailway at 91/2 against 9, and Northern Pacific at


1488 Financial Chronicle Sept. 7 1935181/8 against 16%. Among the oil stocks, StandardOil of N. J. closed yesterday at 44% against 453/8 onFriday of last week; Shell Union Oil at 93/4 against9, and Atlantic Refining at 221/8 against 221/2. Inthe copper group, Anaconda Copper closed yesterdayat 19% against 183/4 on Friday of last week; Kenne-cott Copper at 23% against 22%; American Smelt-ing & Refining at 461/4 against 451/4, and PhelpsDodge at 21% against 203/4.The holiday this week made true assessment of

the business and industrial trend more difficult thanusual, but the indications generally remain favor-able. Steel-making in the current week was esti-mated by the American Iron and Steel Institute at45.8% of capacity against 47.9% last week, 46.0%one month ago, and 18.4% at this time last year.This represents a decrease of 2.1 points, or 4.4%,from the preceding week. The long week-endnaturally induced curtailment at some plants, andthe decline from last week is not discouraging. Out-put of electric power for the week to Aug. 31 isreported by the Edison Electric Institute at 1,809,-716,000 kilowatt hours against 1,839,815,000 kilo-watt hours in the previous week and 1,626,881,000kilowatt hours in the corresponding week of lastyear. Loadings of revenue freight for the weekended Aug. 31 1935 totaled 679,861 cars. This repre-sents a gain of 53,488 cars, or 8.5%, over the preced-ing week, a rise of 32,330 cars, or 5.0%, from thetotal for the like week of 1934.As indicating the course of the commodity mar-

kets, the September option for wheat in Chicagoclosed yesterday at 90c. as against 863/4c. the closeon Friday of last week; September corn at Chicagoclosed yesterday at 751/4c. against 713/4c. the closeon Friday of last week. September oats at Chicagoclosed yesterday at 251/2c. as against 243/4c. the closeon Friday of last week.The spot price for cotton here in New York closed

yesterday at 10.75c., the same as the close on Fridayof last week. The spot price for rubber yesterdaywas 11.45c. as against 11.79c. the close on Friday oflast week. Domestic copper was unchanged for theweek at 8.50c.In London the price of bar silver yesterday closed

at 29 3/16 pence per ounce as against 29 pence perounce on Friday of last week, and spot silver in NewYork remained unchanged at 653/8c., the close onFriday of last week. In the matter of the foreignexchanges, cable transfers on London closed yester-day at $4.931/2 as against $4.967/8 the close on Fridayof last week, and cable transfers on Paris closedyesterday at 6.591/4c. as against 6.611/8c. the closeon Friday of last week.

European Stock Markets

UNEASINESS regarding the developing difficul-ties of the Italo-Ethiopian situation continuedto affect trading on the principal European securi-ties markets this week. For almost a month thisproblem has cast a somber shadow over all dealingsand markets have moved narrowly while the outcomewas awaited. This week was no exception to the re-cent rule, as small upward and downward fluctua-tions at London, Paris and Berlin left the marketsnot greatly changed. Highly indicative of the atti-tude adopted in Europe as a consequence of thethreat of war and the possibility of a general Euro-pean conflagration is the steady downward pressurein foreign exchange markets this week on the gold

currencies of Europe. Since there is no immediateapprehension regarding currency developments, thistendency appears to reflect a continuing capitalflight from Europe to the United States. Pricetrends at London and Paris this week were somewhatmore cheerful than those at Berlin, where a rathersteady downward movement occurred. But there wasno enthusiasm in any European market. All thecustomary indications of business and industrialtrends were ignored, in view of the primary impor-tance of the political situation. The business indices,it may be added, show no variation from recent re-covery tendencies in Great Britain, although the po-sitions in France and Germany are less satisfactory.On the London Stock Exchange trading was

started quietly on Monday, with the holiday at NewYork contributing to the dullness. Uncertainty re-garding the outcome of the Geneva discussions oc-casioned mild liquidation of British funds, while in-dustrial stocks showed about as many small losses assmall gains. Gold mining stocks were soft, and in-ternational issues were neglected. A more cheerfulatmosphere prevailed on Tuesday, owing to rumorsthat Britain and France would take similar standsat Geneva. British funds closed firm, after earlyweakness. In the industrial list many good featuresappeared, while gold mining issues likewise were indemand. Mild irregularity prevailed in the inter-national section. While definite news was awaitedfrom Geneva, Wednesday, trading dropped to smallproportions. British funds drifted slowly lower, andin the industrial section, also, most movements weretoward lower quotations. Some of the gold miningissues improved again, but international securitieswere idle and not much changed. Activity increasedon Thursday, and British funds were sharply betterin that session, since the international outlookshowed signs of improvement. Industrial stocks heldclose to former levels, but gold mining stocks gainedsharply, owing to London rumors that further de-valuation of the dollar is contemplated by the UnitedStates. Favorable reports of the trend at New Yorkincreased interest in Anglo-American trading favor-ites, which advanced. Little business was done atLondon yesterday, and the trend was uncertain.British funds receded, but some industrial issuesimproved.

Very little business was done on the Paris Bourse,Monday, as traders and investors alike were reluc-tant to increase their commitments while the inter-national position remained uncertain. Prices driftedlower on small offerings and a lack of buyers. Rentesdeclined only a little, but losses were more pro-nounced in French bank, utility and industrialstocks. The month-end settlement was easily effected,with the rate at 11/2%, against 3% at the beginningof August. Rumors on Tuesday that the Italo-Ethi-opian problem could be settled without resort to war-fare caused advances in prices on the Bourse in thatsession. Rentes regained their previous losses, andthe tendency was favorable also in most equities.Suez Canal stocks led the foreign section to higherlevels. There was no comfort to be gained on Wednes-day from rumors of a favorable political denouementand the trend turned uncertain. Rentes did a littlebetter, but most equities declined and internationalissues also were marked lower. Again on Thursday,however, the impression prevailed that a peacefuladjustment of the Italo-Ethiopian troubles could befound, and improvement in quotations was the rule.


Volume 141 Financial Chronicle 1489 AlRentes were marked slightly higher, while bothFrench and international securities improved.Rentes showed fractional losses in a dull sessionyesterday, but other issues were barely changed.Although the Berlin Boerse has been affected rela-

tively little of late by international developments,owing to the rigors of Nazi policy, uncertainty wascaused on the market there last Monday by the ru-mors of a spread of the Italo-Ethiopian conflict toother nations. Losses of a point or more were com-mon in equities, and little support appeared forfixed-interest issues. The downward trend was re-sumed on Tuesday, with losses more pronounced inthe speculative favorites. Some issues fell as muchas 4 points, even though transactions were small. Abetter tone prevailed at the opening, Wednesday, butthe initial gains soon were lost as the market settledagain into a lethargic state. More losses than gainswere recorded at the close. After an uncertain open-ing on Thursday, sentiment improved and many is-sues made small gains in that session. Utility stockswere in best demand, but in other groups changeswere small. Small gains were the rule at Berlinyesterday, owing to good reception of a new Reichloan.

Italy and Ethiopia

ASPECTACLE of rare confusion and of rapidlyshifting emphasis was presented this week bythe dispute between Italy and Ethiopia. The Leagueof Nations Council started on Wednesday its con-sideration of the problem. Although the formal ac-tivities have followed rather closely the many predic-tions made by well-informed observers, an under-current of opinion developed late this week whichsuggests that a way of preventing actual warfare bygranting Italy virtually all she desires may yet befound. The British determination to prevent war-fare if it possibly can be done may prove more ef-fective than many had supposed likely. But the pros-pects cannot be considered cheerful, since Italy con-tinued to ship vast numbers of men and great quan-tities of munitions to her East African colonies,while the Ethiopians also made what preparationsthey could for war. Before the Council session be-gan an intensely confusing episode took place, whichseemed for a time to swing the United States towardsome sort of involvement in the Italo-Ethiopian im-passe. A concession covering the exploitation of oiland mineral resources in more than half of Ethiopiasuddenly was reported by the Associated Press fromAddis Ababa. Although Emperor Haile Selassie de-clared that only American interests were concernedin this grant, no confirmation was available here atfirst. Later it appeared that the statement by theEmperor was correct, and the matter then wasbrought to a prompt close through relinquishmentof the concession by the Standard Oil interests in-volved.The action of the Ethiopian Emperor in "deeding"

more than half his Empire to interests representedby a British promoter, Francis M. Rickett, clearlywas an act of desperation, intended to bring Ameri-can influence to bear in behalf of his country. Thestatements made by the Briton to the AssociatedPress representative at Addis Ababa was to the ef-fect that both British and American concerns wereinvolved. The concession or deed covered the entireeastern and more vulnerable part of Ethiopia. Itcaused amazement in all Chancelleries and brought

an immediate declaration from Secretary of StateCordell Hull that the United States Governmentwould take no steps whatever to protect any suchgrant, if American interests were involved. It prom-ised to affect the delicate balance of European af-fairs, for Italy promptly drew the conclusion thatthe stroke was engineered by Britain in order to sup-ply additional grounds for interference with theaims of Rome. The British Government emphaticallydenied that any British companies were interestedin the grant, so far as it was able to ascertain. Butthere were naturally some doubts on the matter, inview of the complications of inter-company relation-ships, and it was realized in London that the Britishcase at Geneva would be badly handicapped if anyBritish backers actually appeared. So strongly didthe British Government feel about the matter thata strenuous protest to Ethiopia was prepared anddispatched to the British Minister at Addis Ababa.But the protest never was delivered owing to a state-ment by Emperor Haile Selassie last Sunday thatonly American interests were concerned. Attemptsin New York to ascertain the identity of Mr. Rick-ett's backers were quite fruitless.Emperor Haile Selassie cleared up the mystery

in good part by his statement last Sunday that theBritish Government could hardly interfere with aconcession granted to American citizens. "As a sov-ereign State we have the right to do anything weplease in our own territory," he informed the cor-respondent of the Associated Press. "The UnitedStates is not a party to the 1906 treaty, in whichEngland, France and Italy merely pledged them-selves to do nothing to encroach on the interests ofothers. That is one of the reasons why I gave theconcession to Standard Oil." In view of this state-ment it quickly developed on Monday that the Stand-ard-Vacuum Oil Co., owned jointly by the StandardOil Co. of New Jersey and the Socony-Vacuum OilCo., Inc., were actually behind the transaction. Of-ficials of these companies conferred with State De-partment officials in Washington and on the adviceof Secretary Hull they announced immediate relin-quishment of the concession, Tuesday. PresidentRoosevelt declared on Wednesday that "dollar diplo-macy" no longer is recognized by the United StatesGovernment, and that the developments relating tothe concession may be taken as proof of that circum-stance. Cancellation of the grant cleared the diplo-matic air for the League Council meeting at Geneva.The Council meeting started on Wednesday with

more than a score of items on the agenda, but otherproblems were neglected in view of the primary im-portance of the Italo-E thiopian dispute. The chiefroles in the drama again were played by CaptainAnthony Eden for Great Britain, Premier PierreLaval for France, and Baron Pompeo Aloisi forItaly. Ethiopia was represented by her French ad-viser, Prof. Gaston Jeze. Captain Eden conferredonce again with French officials as he journeyedtoward the League city, and there were rumors ofan improved understanding between the British andFrench after the conference, but actual evidence tothat effect was lacking. More impressive were sub-stantial British shipments of anti-aircraft guns andgas-masks to Malta, and the heavy concentration ofthe British Mediterranean fleet around the Suez Ca-nal. On the eve of the League session the specialItalo-Ethiopian conciliation and arbitration commis-sion, appointed to assess the blame for the border


L 1490 Financial Chronicle Sept. 7 1935

clash at Ualual last December, reached a decision tothe effect that neither country was to blame for theincident. The Ethiopians were quite content withthis ruling, but the Italians found it a matter forresentment.In this atmosphere, then, the League Council gath-

ered at Geneva and started its deliberations lateWednesday. Captain Eden was the first to speak inthe public session and he presented the British caseably and well. After outlining the course of the Parisdiscussions in mid-August, Captain Eden declaredthat Britain would do all in its power to insure apeaceful settlement of the dispute. He invoked thespirit of the League and declared that failure of itsauthority in this conflict would impair its influencegravely. Collapse of the League and of the new con-ception of international order for which it standswould be a world calamity, the British delegate ar-gued. "It is our duty to use the machinery of theLeague that lies to hand," he added. Premier Laval,in presenting next the French viewpoint, also ex-pressed attachment to the League. Disregarding theearlier decision of the conciliation commission thatneither country was to blame for the border clash,M. Laval suggested that an "equitable settlement"might be reached such as would "insure to Italy thesatisfaction she can legitimately claim without fail-ing to recognize the essential rights of Ethiopiansovereignty."The Italian declaration was eagerly awaited and

promptly made by Baron Aloisi. It created a sen-sation even though it followed only the anticipatedcourse of a bitter attack against Ethiopia, coupledwith a firm statement that Italy would take her owncourse in that African country. The Italian Gov-ernment holds, said Baron Aloisi, that Ethiopia has"systematically and openly violated all the conven-tional undertakings she had assumed" both towardItaly and the League. The fitness of Ethiopia totake part in the Geneva discussions on equal termswas denied, and Italy made "all reservations" asto its future course. All possibility of peaceful col-laboration with Ethiopia was denied and that coun-try termed the "permanent enemy" of Italy, owingto alleged provocations, demonstrations, brigandageand acts of violence against peaceful frontier popu-lations. Baron Aloisi referred in scornful terms toEthiopia's representation by European advisers. TheAfrican Empire is not worthy of belonging to a com-munity of civilized nations, he said, and the "error"committed in 1923 when Ethiopia was admitted tothe League should not be continued.

Professor Jeze, speaking for Ethiopia, expressedsurprise at such charges and after denying thembriefly asked for time to formulate an extended re-ply. The reply was made on Thursday with remark-able eloquence but most distressing results, for theEthiopian statements were considered insulting bythe Italian delegate, who left the Council chamber.On calm examination the Ethiopian statements seemto be no more offensive than those made the previousday by Italy, but an affront to Ethiopia is one thingand an affront to Italy quite another. It was, per-haps, impolitic for the representative of a smalland weak State to declare, as Prof. Jeze did, thatthere is a proverb in every country which describesthe maneuver contemplated by Italy. "In France,people say that if a man wishes to drown his dog heaccuses it of being mad," he remarked. "The ItalianGovernment, having resolved to conquer and suppress

Ethiopia, begins by declaring that Ethiopia has gonemad. As for the outrageous insults that are castupon her, Ethiopia takes them at their real value.She recalls that the Italian Government, turn by turn,leveled at all its European neighbors in recent years,according to the moods of its policy, the most ig-nominious insults. The Ethiopian Government isaware that if it possessed in sufficient quantity thearms and munitions necessary for its defense, as isthe case in European countries, those verbal assaults,notwithstanding their violence, would not be fol-lowed by acts of war. That, unfortunately, is not thecase, and that is why the peril is a very serious one."The Italian delegate, at this point, rose and left

the room to telephone for instructions. He returnedin a few minutes and asked for a suspension of thesitting, and when this was not granted he made apoint of declaring an intention to leave the Italianseat vacant. The Ethiopian delegate, continuing hisaddress, appealed most eloquently to the League notto abandon a little State, threatened by a powerfulGovernment. He was followed by the Russian ForeignCommissar, Maxim Litvinoff, who assailed the Ital-ian argument that Italy is entitled to invade Ethi-opia on the ground that the African country is "bar-barous." He referred to the great varietty of gov-ernments now prevalent and remarked that theLeague Covenant makes no distinctions between skincolor, racial characteristics or stages of civilization.The Italian withdrawal from the Council session pre-sented the problem, of course, whether Italy therebywithdraw from the League. Rome dispatches madeit plain that this was not intended and that the ac-tion was taken merely in accordance with the Italiandetermination not to become involved in an argu-ment with Ethiopia before the Council. It also wasmade clear by Government spokesmen in Rome thatItaly has no intention of starting hostilities againstEthiopia while the League session continues. Some-what encouraging, meanwhile, are London and Ge-neva intimations that Premier Mussolini may stillbe content with factual control of most of Ethiopia,after a brief punitive expedition by Italian forces.That Britain and France are willing to accord suchcontrol to Italy, if war thus could be averted, is notdoubted, and their joint representations at AddisAbaba might suffice to insure Ethiopian acceptanceof a "compromise" of this sort.

Soviet-American Relations

ATHOUH the recent exchange of notes betweenthe United States and Soviet Russian Govern-ments regarding the activities of the Communist In-ternational was unsatisfactory in almost all respects,there is every indication that the matter now willbe allowed to rest. After registering a "most em-phatic protest" against the "flagrant" violation byRussia of its pledge not to permit organizations onits territory to advocate the overthrow of Americaninstitutions by force, and after receiving the tartRussian reply refusing to entertain the protest, theState Department at Washington apparently con-sidered for some days whether to continue the diplo-matic exchanges of communications. The decisionevidently was in the negative, for a public statementwas issued last Saturday which seems to bring thematter to an end, for the time being at least. In hispublic declaration Secretary of State Cordell Hullrecapitulated the American arguments and endedwith the statement that relations between the coun-


Volume 141 Financial Chronicle 1491tries cannot but be "seriously impaired" if Russiacontinues to disregard its pledge. Dispatches fromMoscow indicate that the Russian authorities werenot particularly impressed by the statement and donot intend to pursue the subject further. Meanwhile,Japan found it advisable to register an oral protestin Moscow against the activities of the CommunistInternational, similar action having been taken pre-viously by Great Britain, Italy and Latvia. The Rus-sian Government, in reply, is said to have directedthe attention of the Japanese Foreign Office to anti-Soviet activities of White Russians in Manchuria.The State document which Secretary Hull issued

for consumption in this country comments on therecent exchange of notes, which is said to raise theissue whether the Soviet Government, in disregardof an express agreement entered into at the time ofrecognition in 1933, will permit organizations orgroups operating on its territory to plan and directmovements contemplating the overthrow of the po-litical or social order in the United States. The So-viet pledge given at the time recognition was ex-tended irrefutably covered the activities of the Com-munist International, Mr. Hull contended, but theSoviet Government in its recent note "almost in somany words repudiated the pledge." It was revealedin the statement that the United States Governmentpreviously had made oral complaints of failure bythe Soviet regime to live up to its promise, and theformal note which followed was written so that theremight be "continued development of friendly andofficial relations and valuable collaboration in manybeneficial ways." The Soviet reply, Mr. Hull added,"struck a severe blow at the fabric of friendly rela-tions between the two countries." In view of theplain language of the pledge, he said, it is not pos-sible for the Soviet Government to disclaim its obli-gation to prevent activities on its territory directedtoward overthrowing the political or social order inthe United States. It remains to be seen to whatextent the intention indicated by the Soviet Govern-ment's reply, which is directly contrary to the fixedpolicy declared in its pledge, will be carried into ef-fect, the statement continued. "If the Soviet Gov-ernment pursues a policy of permitting activities onits territory involving interference in the internalaffairs of the United States, instead of preventingsuch activities as its written pledge provides, thefriendly and official relations between the two coun-tries cannot but be seriously impaired," Mr. Hullstated.

Little Entente Conference

FOREIGN Ministers of the three countries of theLittle Entente held one of their periodic con-ferences last week at Bled, Yugoslavia, in order toreview the current European situation and formu-late the policies to be adopted. Any decisions reachedin common by Czechoslovakia, Yugoslavia and Ru-mania naturally are sure to prove highly important,but the official statement issued last Saturday, atthe close of the conference, does not reveal any newtendencies. The deep attachment of these SuccessionStates to the League of Nations was reiterated. Thepossibility of a Hapsburg restoration in Austria hasbothered the Little Entente greatly of late, sincethe Austrian Government has taken formal steps fora return of that family to Vienna. Friendly andpeaceful co-operation of the Little Entente Stateswith Austria would prove impossible if the Haps-

burgs were restored to the throne, the statement in-dicated, and hostility was expressed to "any meas-ures aimed at paving the way for such restoration."Although the present European situation seems tomake the proposed Eastern European and Danubianpacts little more than the remnants of a dream, LittleEntente statemen still hope to see the treaties nego-tiated and signed. The Eastern Locarno, as proposedby Britain and France last February, was endorsedwithout reserve in the official statement. Additionalexamination of the suggestions for a Danubian pactwas held advisable, but the conviction was expressedthat such a treaty would serve as the basis forfriendly co-operation between the Little Entente onthe one hand, and Austria and Hungary on the other.A brief meeting of the Balkan Entente, which in-cludes Yugoslavia, Rumania, Greece and Turkey,was held soon after the Little Entente meetingended, but no indications were given of the courseof the discussions.

Latin American DebtsI NCREASING evidence is available that various

Latin American countries are giving more earn-est consideration than for several years past to theproblems presented by their defaulted dollar bondsoutstanding in this market. The Peruvian Govern-ment is the latest to take tentative steps towardresumption of payments. When the budget for 1936was presented on Tuesday to the Peruvian Congressit was accompanied by a statement that as soon asrecovery symptoms begin to appear the Lima Gov-ernment will deem it necessary to resume paymentson external obligations. The incomplete availablereports suggest that full resumption of service prob-ably will not be attempted, for the time being. Riode Janeiro dispatches for several months have inti-mated that the Brazilian Government might defaultcompletely on its external obligations, despite theAranha agreement of 1934 which calls for very mod-est payments over a trial period of four years. ButFinance Minister Arthur de Souza Costa last weekdenied such rumors and stated that the Brazilianauthorities intend to continue paying the stipulatedsums as long as possible on all Federal, State andProvincial debts held abroad. Less favorable is adispatch from Panama to the New York "Times,"of last Monday, to the effect that an attempt willbe made to obtain a reduction in the interest rateon the $12,000,400 issue of Panama 5% bonds of1963, on which only one-third of the interest now isbeing paid. Of much interest, also, is an ArgentineSupreme Court decision of last Wednesday, reportedto the same journal, which holds that suits in con-nection with defaults on Argentine Provincial bondsmust be directed against the bankers in the UnitedStates, rather than the Provincial officials. Thisruling appears to be entirely on the technical groundthat the loan contracts give the bankers the powerof attorney to act for the investors, and it wasclaimed that no evidence had been presented toshow that the New York fiscal agents had refusedto request the payments due.

Social Credit Experiment

SOCIAL CREDIT rule was formally inauguratedin the Canadian Province of Alberta, Tuesday,when William Aberhart was sworn in as Prime Min-ister of the first Social Credit Government in theworld. The ceremony was well attended, but imme-



diately after it ended the new Prime Minister foundit advisable to call a Cabinet meeting in order toconsider the financial crisis now facing the Pro-vincial regime. Like the outgoing Prime Minister,R. G. Reid, Mr. Aberhart insisted in public state-ments that the finances of Alberta are sound. Hepromised a strong, sound and stable Governmentto the Province and declared that his first concernwill be to maintain the credit of the Government. Itappears, however, that a difficult task faces thePrime Minister, and application already has beenmade to the Dominion Government at Ottawa foraid. Eager as the citizens of Alberta are to receivethe $25 a month in non-negotiable credit dividendsfor which they voted almost unanimously, they seemto have little real faith in the means whereby thosedividends are to be provided. It has not yet beenfound possible to resume payments on the Provincialsavings certificates, which are secured by Provincialbonds, for there is no market for the bonds. Thecertificates on which payment now can be requiredare estimated in excess of $4,000,000, and it is statedin a report to the New York "Herald Tribune" thatthe demands for payments have reached $2,000,000.The Province is said in some dispatches to face$15,000,000 in obligations before the fiscal year endsnext March, and this figure also represents the ex-tent of the aid desired from Ottawa. Before assum-ing office, Mr. Aberhart remarked that 18 monthswould be required to start the Social Credit schemegoing, but the present difficulties would seem toindicate that a still longer period will be necessary.

Discount Rates of Foreign Central Banks

THERE have been no changes during the week inthe discount rates of any of the foreign CentralBanks. Present rates at the leading centers areshown in the table which follows:

DISCOUNT RATES OF FOREIGN CENTRAL BANKS

CountryRate inEffectSept.6

DateEstablished

Pre-('tousRate

CountryRate inEffectSept .6

DateEstablished

Pre-PiousRate

Austria._ 334 July 10 1935 4 Hungary__ 4 Aug 28 1935 4%Batavia.... 4 July 1 1935 454 India 354 Feb. 16 1934 4Belgium... 2 May 15 1935 23.4 Ireland_ ___ 3 June 30 1932 33.4Bulgaria__ 6 Aug. 15 1935 7 Italy 434 Aug.12 1935 314Canada.... 234 Mar. 11 1935 __ Japan 3.65 July 3 1933 3Chile 4 Jan. 24 1935 434 Java 43.4 June 2 1935 334Colombia_ 4 July 18 1933 5 Jugoslavia . 5 Feb. 1 1935 654Czechoslo- Lithuania__ 6 Jan. 2 1934 7

vakia___. 354 Jan. 25 1933 434 Morocco__ 654 May 28 1935 454Danzig_ __ _ 6 May 3 1935 4 Norway. _ _ 334 May 23 1933 4Denmark._ 334 Aug. 21 1935 23.4 Poland__ 5 Oct. 25 1933 6England... 2 June 30 1932 234 Portugal 5 Dec. 13 1934 534Estonia__ 5 Sept. 25 1934 534 Rumania 43.4 Dec. 7 1934 6Finland.... 4 Dec. 4 1934 434 SouthAfrIca 4 Feb. 21 1933 5France,. _ _ . 3 Aug. 8 1935 314 Spain 5 July 10 1935 534Germany__ 4 Sept. 30 1932 5 Sweden 214 Dec. 1 1933 3Greece__ 7 Oct. 13 1)33 734 Switzerland 234 May 2 1935 2Holland_ .. 6 July 26 1935 5

Foreign Money RatesI N LONDON open market discount for short billson Friday were 9-16(4)%% as against 9-16% on Fri-

day of last week, and N% for three-months' bills asagainst 9-16@%% on Friday of last week. Moneyon call in London on Friday was M%. At Paris theopen market rate remains at 314%, and in Switzer-land at 29%.,

Bank of England Statement

THE statement for the week ended Sept. 4 showsa gain of 31,517 in bullion but as this was at-tended by an expansion of 2,058,000 in circulation,reserves declined 2,026,000. Gold holdings now ag-gregate 194,115,078 as compared with 192,328,463a year ago. Public deposits fell off 3,500,000 andother deposits increased 5,320,045. Of the latteramount, 3,127,503 was an addition to bankers' ac-counts and 2,192,542 to other accounts. The reserve

ratio dropped from 38.19% last week to 36.30%; ayear ago the ratio was 45.67%. Loans on Govern-ment securities rose 2,140,000 and those on othersecurities 1,726,365. The latter consists of discountsand advances and securities which increased 1,145,-916 and 580,449 respectively. No change was madein the rate of discount which remains 2%. Below weshow a comparison of the different items for severalyears:

BANK OF ENGLAND'S COMPARATIVE STATEMENT

Sept. 41935

Sept. 51934

Sept. 61933

Sept. 71932

Sept. 91931

Circulation 401.623,000 381,283,577 375,225,961 365,122,461 353.930,664Public deposits 5.859,000 29,635,051 21,454,197 7,618,226 21,807,574Other deposits 138,708,983 125,877,355 142.400,608 124,803,583 105,378,419Bankers' accounts- 100,062,601 88,946,917 97,422,678 91,506,603 54,845,474Other accounts 38,646,382 36,930,438 44,977,930 33,296,980 50,532,945

Govt. securities 83,415,999 85,029,164 83,535,963 69,933,094 51,145,906Other securities 26,921,501 17,698,686 22,117,791 30,884,915 36,033,940D1n8. & advances 14,080,503 6.935,180 9,694,892 12,273.627 8,291,359Securities 12,840,998 10,763,506 12,422,899 18.611,288 27,742,581

Reserve notes & coin 52,493,000 71,044,886 76,433,305 49,835,214 58,275,580Coln and bullion 194,115,078 192,328,463 191,659.266 139,957,675 137,206,244Proportion of reserve

to liabilities 36.30% 45.67% 46.64% 37.63% 45.81%lAnnk ratffl 20Z, 2% 211 20?. 414?..

Bank of France Statement

THE weekly statement dated Aug. 30 records again in gold holdings of 133,015,762 francs.The total of gold is now 71,741,662,620 francs, in com-parison with 82,036,782,507 francs a year ago and82,277,928,401 francs two years ago. An increasealso appears in French commercial bills discountedof 1,071,000,000 francs, while the items of advancesagainst securities and creditor current accounts reg-ister decreases of 18,000,000 francs and 38,000,000francs respectively. Notes in circulation show anexpansion of 1,555,000,000 francs, bringing the totalof notes outstanding up to 82,238,506,975 francs.Circulation last year stood at 81,732,265,820 francsand the previous year at 82,865,239,410 francs. TheBank's ratio is now 74.61% in comparison with80.04% a year ago and 79.61% a year before. A com-parison of the different items for three years appearsbelow:

BANK OF FRANCE'S COMPARATIVE STATEMENT

Changesfor Week Aug. 30 1935 Aug. 31 1934 Sept. 1 1933

Francs Francs Francs FrancsGold holdings +133,015,762 71,741,662,620 82,036.782,507 82,277.928,401Credit bats. abroad..a French commercial

bills discounted_ _

No change

+1.071.000,000

6,733,122

7,574,063,059

13,297,077

3,116,422,256

1,290,625,883

2,634,452.277b Bills bought abr'd No change 1.169,322,000 1,068,510,30Q 1,348,116,608Adv. against scours_ 18,000,000 3302,362,022 3,140.365,664 2.763.333,372Note circulation_ . _ _ +1,555,000,000 82,238,506,975 81.732,265.820 82,865,239,410Credit current accts. 38,000,000 13,909,282,392 20,763,499,576 20,485,690.243Propor'n of gold onhand to sight liab_ 1.06% 74.61% RR ftt% 79 6176

a Includes bills purchased in France. b Includes bills discounted abroad.

Bank of Germany Statement

pE statement for the last quarter of Augustshows an increase in gold and bullion of 24,000marks. The Bank's gold is now at 94,779,000 marks,in comparison with 74,907,000 marks last year and307,320,000 marks the previous year. A decreaseappears in reserve in foreign currency of 70,000marks, in silver and other coin of 115,035,000 marks,in notes on other German banks of 8,325,000 marks,in other assets of 14,732,000 marks and in otherdaily maturing obligations of 26,096,000 marks. Theproportion of gold and foreign currency to note cir-culation is now 2.48%, compared with 2.1% a yearago and 10.9% two years ago. Notes in circulationrecord a gain of 393,363,000 marks, bringing thetotal of the item up to 4,031,831,000 marks. Cir-culation last year aggregated 3,823,908,000 marksand the previous year 3,521,202,000 marks. Billsof exchange and checks, advances, investments andother liabilitie register increases, namely 495,890,000marks, 22,227,000_ marks , 445,000 marks, and 26,-


Volume 141 Financial Chronicle 1493096,000 marks, respectively. Below we furnish acomparison of the various items for three years:

REICHSBANK'S COMPARATIVE STATEMENT

Changesfor Week Aug. 31 1935 Aug. 31 1934 Aug. 31 1933

Assets Retchsniarks Reichsmarks Reichsrnarks ReichsniarksGold and bullion +24,000 94,779,000 74,907,000 307,320,000Of which depos. abroad No change 29,621,000 14,449,000 93,778,000Reserve in foreign curr_

70.000 5,301,000 3,630,000 74,373,000Bills of exch. and checks +495,890,000 4,035,103,000 3,542,766,000 3,163,759,000Silver and other coin _ _ _115,035,000 341,754,006 212,911,000 196,619,000Notes on other Ger.bks.8,325,000 4,761,000 4,870,000 3,559,000Advances +22,227,000 54,091.000 128,207,000 163,075,000Investments +445,000 664,272.000 737,187,000 320,210,000

Other assets 14,732,000 664,252,000 649,492,000 548,620,000LtabI/Wes

Notes in circulation__ +393,363,000 5,031,831,060 3,823,908,000 3,521,202,000Other daily matur. oblig

26,096,000 742,602.000 716,589,000 415,489,000Other liabilities +13,157,000 238,626,000 180.676,000 217,693,000Propor. of gold ik forscurr. to note circurn_

0.27,: 2.48% 2.1% 10.9%

New York Money Market

THERE was little activity this week in any de-partment of the New York money market. Theexcessively low rates of recent weeks were con-tinued without change, and they found a reflectionin dividend reductions on stocks of several largebanking institutions. The Treasury sold late lastweek an issue of $50,000,000 discount bills due in273 days, and the average discount on awards was0.151%, computed on an annual bank discount basis.There was a little activity early in the week in com-mercial paper, but rates were unaltered, whilecharges on bankers' bills also were continued un-changed. Call loans on the New York Stock Ex-change held to 1/4%, and time loans for all maturi-ties up to six months also were at that figure. Thecomprehensive tabulation of brokers' loans preparedby the New York Stock Exchange indicated an in-crease of $3,096,720 during August, and the aggre-gate of such loans was $772,031,468 at the end ofthat month.

New York Money Rates

DEALING in detail with call loan rates on theStock Exchange from day to day, of 1%remained the ruling quotation all through the weekfor both new loans and renewals. The market fortime money has shown no change this week and notransactions have been reported. The market forprime commercial paper has shown no apparentchange this week. The demand has been good andthe supply of paper has been fairly large. Ratesare 34% for extra choice names running from four tosix months and 1% for names less known.

Bankers' Acceptances

DEALINGS in prime bankers' acceptances havebeen extremely dull this week. Few bills havecome out and very little interest has been shown.Quotations of the American Acceptance Council forbills up to and including 90 days are at 3-16% bidand A% asked; for four months, Yi.% bid and 3-16%asked; for five and six months, 3A% bid and 5-16%asked. The bill buying rate of the New York Re-serve Bank is M% for bills running from 1 to 90 days,34% for 91- to 120-day bills, and 1% for 121- to 180-day bills. The Federal Reserve banks' holdings ofacceptances remain unchanged at $4,685,000. Openmarket rates for acceptances are nominal in so faras the dealers are concerned, as they continue to fixtheir own rates. The nominal rates for open marketacceptances are as follows:

SPOT DELIVERY180 Daps 150 Days 120 DaysBid Asked Bid Asked Bid Asked

sia is 3i 'is90 Days --60 Days 30 DaysBid Atka' Bid Asked Bid Askedis 34 sis 34 Ns 14

Prime eligible bills

Prime eligible bills

FOR DELIVERY WITHIN THIRTY DAYSEligible member banks 44% bidEligible non-member banks

,f% bid

Discount Rates of the Federal Reserve Banks

THERE have been no changes this week in therediscount rates of the Federal Reserve banks.The following is the schedule of rates now in effectfor the various classes of paper at the differentReserve banks:

DISCOUNT RATES OF FEDERAL RESERVE BANES

Federal Reserve BankRate inEffect onSept. 6

DateEstablished

PretttousRate

Boston 2 Feb. 8 1934 214New York 134 Feb. 2 1934 2Philadelphia 2 Jan. 17 1935 24Cleveland 134 May 11 1935 2Richmond 2 May 9 1935 234Atlanta 2 Jan 14 1935 24Chicago 2 Jan. 19 1935 2%St Louis 2 Jan 3 1935 24Minneapolis 2 May 14 1935 2%Kansas City 2 May 10 1935 2%Dallas 2 May 8 1935 2%San Francisco 2 Feb. Ili 1934 234

Course of Sterling Exchange

STERLING exchange is easier in terms of the dol-lar, but in relation to French francs or gold thepound is firmer. The foreign exchange market bothhere and abroad is more than ordinarily dull andhesitant as bankers on the other side await the finaloutcome of the Italo-Ethiopian dispute before theLeague of Nations. The range for sterling this weekhas been between $4.933/ and $4.9634 for bankers'sight bills, compared with a range of between $4.9734and $4.983/ last week. The range for cable transfershas been between $4.9334 and $4.9634, comparedwith a range of between $4.973/ and $4.9834 a weekago.The following tables give the mean London check

rate on Paris from day to day, the London open mar-ket gold price and the price paid for gold by theUnited States:

MEAN LONDON CHECK RATE ON PARISSaturday, Aug. 31 75.156 I Wednesday, Sept. 4 75.093Monday, Sept. 2 75.187 I Thursday, Sept. 5 75.02Tuesday, Sept. 3 75.166 I Friday, Sept. 6 74.945

LONDON OPEN MARKET GOLD PRICESaturday, Aug. 31 140s. 134d. I Wednesday, Sept. 4_ _A408. 4d.Monday, Sept. 1 140s. 3d. I Thursday, Sept. 5___140s.Tuesday, Sept. 2 1408. 3d. .1 Friday, Sept. 6-__140s. 109.

PRICE PAID FOR GOLD BY THE UNITED STATES (FEDERALRESERVE BANK)

Saturday, Aug. 31 835.00 I Wednesday, Sept. 4 835.00Monday, Sept. 1 35.00 I Thursday, Sept. 5 35.00Tuesday, Sept. 2 35.00 I Friday, Sept. 6 35.00

Seasonal influences are beginning to work in favorof the dollar and from now on until after the turn ofthe year, under normal conditions, quotations forsterling might be expected to move downward. Suchfactors cannot be relied upon, however, as they couldunder the conditions prevailing before the war, astariff barriers, exchange controls, quotas and restric-tions of many kinds have greatly curtailed the volumeof international trade. Tourist requirements havebeen an important factor supporting not only sterlingbut all the Continental currencies this year, as trafficreached the highest levels since 1929. It is estimatedthat approximately 75,000 tourists left the UnitedStates this season and about 30,000 are not yet re-turned.

Aside from returning tourist traffic and the greatlimitations placed upon foreign exchange require-ments because of international commercial impedi-ments, the present market is excessively curtailedbecause British and Continental bankers and businessinterests are hesitant, awaiting the outcome of thenegotiations at Geneva. This was especially evidenton Wednesday, when the war preparations and the



attendant uncertainties sent down all the Continentalcurrencies. The French franc fell to near the lowergold point in terms of the dollar, followed more orless closely by the other gold bloc units and the,Italian lira made a new record low in the New Yorkmarket of 8.14 and was quoted still lower in London,as compared with new dollar parity of 8.91. Thepresent dulness may be expected to last until some-thing definite comes from Geneva.

Trading has been limited for the past month tosuch an extent that the British exchange controlkept sterling steady in terms of the French francwithout much effort. In fact the extraordinary cur-tailment in international trade since Great Britainabandoned the gold standard in 1931 has made thetask of the exchange control less arduous. Underpresent conditions, however, only the interventionof the British control prevents sterling from goingmuch higher in terms of gold. London continues topride itself on the fact that for more than threemonths the fluctuations of sterling with reference tothe franc have been kept within less than 1%.At present the London open market gold price

shows a much easier undertone and on several occa-sions during August, particularly toward the end ofthe month, the rate for gold went fractionally belowthe Bank of France buying price. The easing off inthe gold price is not in the least an indication of alessening in acquisition of the metal for account ofhoarders. Practically all the gold coming to themarket continues to be taken for account of privatehoarders, but until about two months ago there hadbeen active buying of gold for speculative account as,when on March 6 the London open market reacheda high of 149s. 4d. The London authorities and theContinental central bank authorities, aided by theBank for International Settlements at Basle, havebeen taking strong measures to prevent speculationin the metal. The present ease in the gold price isattributed to the liquidation of speculative holdingsestablished months ago. Gold in the London openmarket had for a long time been ruling at a premiumin terms of the gold currencies. Considerable com-ment was evoked in London last week when thepremium vanished, with gold around and often under140s., the lowest quotations since December. Thepractice still is to base the London price of gold onthe gold currencies, having reference especially tothe French franc rate. As these currencies rise or fallin terms of sterling, the open market gold price risesor falls. Speculative trading was chiefly responsiblefor the premium and the premium's disappearancepoints distinctly to speculative liquidations. Thehoarding demand for gold and the consequent highprice of the metal may be expected to continue aslong as international trade uncertainties persist.The great demand for gold, together with the pur-

chases of silver for United States Treasury account,is an important factor giving firmness to sterlingand may well counteract seasonal influences arisingon commercial account. Furthermore, the steadyflow of funds to London for safety has a strengthen-ing on sterling. No matter what the outcomeof the Italo-Ethiopian dispute, uneasy money willstill seek refuge in London. A counter movement offunds from London and from other European centersthrough London is directed toward the New Yorksecurity market. If improvement in business con-tinues on this side, as seems highly probable, this

flow of European money may be expected to attainconsiderable volume.Money rates in London continue easy and un-

changed from last week. Call money against billsis in supply at %. Two-months' bills are 9-16%,three-months' bills are 9-16% to %%, four-months'bills are %%, and six-months' bills are 11-16% to9'7o. Gold on offer in the London open marketcontinues to be taken for unknown destinations, pre-dominantly for account of private hoarders. OnSaturday last there was available 277,000, on Mon-day 213,000, on Tuesday 230,000, on Wednesday15,700, on Thursday 220,000 and on Friday85,000. On Friday the Bank of England bought47,511 in gold bars.At the Port of New York the gold movement for

the week ended Sept. 4, as reported by the FederalReserve Bank of New York, was as follows:GOLD MOVEMENT AT NEW YORK, AUG. 29-5EPT. 4, INCLUSIVE

Imports Exports$2,827.000 from Canada2,498,000 from India

64,000 from Nicaragua None4,000 from Guatemala

$5,393,000 totalNet Change in Gold Held Earmarked for Foreign Account

Decrease $538,000NoteWe have been notified that approximately $267,000 of gold was

received from China at Ban Francisco.

The above figures are for the week ended onWednesday. On Thursday $1,490,300 of gold wasreceived from India; there were no exports of themetal, but gold held earmarked for foreign accountdecreased $350,000. On Friday there were no im-ports or exports of the metal or change in gold heldearmarked for foreign account. It was reported onFriday that $111,000 of gold was received at SanFrancisco from China.Canadian funds during the week were quoted in

terms of the dollar at from a discount of 9-16% toa discount of 5-16%.

Referring to day-to-day rates, sterling exchangeon Saturday last was easier in terms of the dollar.Bankers' sight was $4.963'@$4.965/8, cable [email protected]%. On Monday, Labor Day, therewas no market in New York. On Tuesday sterlingwas dull and easier. The range was $4.955/8@$4.96for bankers' sight and $4.95%@$4.963/ for cabletransfers. On Wednesday exchange on London wasdull and inclined to ease. Bankers' sight was@$4.95% and cable transfers $4.95@ .95k. OnThursday trading continued inactive, with sterlingshowing an easier undertone. The range was $4.943'@$4.94% for bankers' sight and $4.943@$4.94%for cable transfers. On Friday sterling was lower,the range was $4.933@$4.93N for bankers' sightand $4.933'@$4.94 for cable transfers. Closing quo-tations on Friday were $4.93% for demand and$4.9314 for cable transfers. Commercial sight billsfinished at $4.933, 60-day bills at .92 8, 90-daybills at $4.92, documents for payment (60 days) at$4.923%, and seven-day grain bills at $4.92%. Cot-ton and grain for payment closed at $4.9314.

Continental and Other Foreign ExchangeCRENCH francs and the Continental currencies

generally are displaying ease in relatively in-active markets, due principally to uneasiness feltover the Italo-Ethiopian situation. This concern isalso believed to have set up a movement of fundsaway from the Continental currencies to safer markets.


Volume 141 Financial Chronicle 1495Most of this money migration has been to Londonand Switzerland and to some extent to New York.The dulness in sterling exchange and its ease in termsof the dollar are factors also partly responsible forthe lower average quotations for the French francand other Continentals. On Wednesday and Thurs-day the French franc went well below dollar parityand ruled only slightly above the lower point forgold from Paris to New York. The factors whichhave been dominating the foreign exchange situationfor the past few weeks, such as the fears of devalua-tion of European gold currencies, is hardly operativein the current market.The French situation is improving and sufficient

funds seem to have come from the great Frenchhoards to Paris to make money rates there easier.According to recent declarations of the FrenchFinance Minister, the French budget has been re-duced from 51,000,000,000 francs in 1931 to 47,500,-000,000 francs last year, and since the economy de-crees this year has been further cut to 42,000,000,000francs. The Government now considers that theTreasury will not have to borrow further for normalbudgetary needs. The fiscal receipts are still, how-ever, lower than estimated. Furthermore, in orderto combat unemployment, the Government has de-cided to draw up a vast plan of public works, partlyas a charge on the State and partly as a charge onthe towns or departments which will participate.Such State expenditure would not be included in thebudget, as it is proposed that they should be coveredby advances from the National Safe Deposit Bank.This public bank will use for that purpose funds col-lected through the workmen's compulsory insurancescheme. Towns and departments will raise thenecessary funds by borrowing. In short, the State nolonger will borrow to cover normal expenditures, butloans will be required to finance the proposed publicworks program.The Belgian unit, which has been exceptionally

firm since the devaluation of the belga at the end ofMarch, is again showing weakness, especially in theParis and London markets. Par of the belga is16.95 and the unit declined in New York on Tuesdayto 16.81. It is theoretically possible to ship goldfrom Belgium to New York when the rate movesdown to 16.84. It is somewhat doubtful, however,that gold will be shipped at the present juncture.Following the devaluation of the belga a heavy flowof European funds set in to Antwerp, to profit fromthe post

-devaluation boom. This rush of funds in-creased the gold reserves of Belgium by approxi-mately 239,000,000 belgas between April 4 andJune 20. The devaluation boom, if such it could becalled, seems to have come to an end in June, as forthe past eight weeks there has been no change in theunemployment figures. The National Bank ofBelgium has been losing considerable gold to Parissince June 20. The gold is sold to buy French francs,which in turn are sold to buy belgas in the exchangemarkets to counteract sales of belgas on private ac-count. The final statement of the National Bank ofBelgium for August showed gold reserves of 3,464,-000,000 belgas, compared with the peak of 3,609,-000,000 belgas on June 20.

Italian lire are, of course, exceptionally weak owingto the war preparations. Theoretically, at least, theItalian exchange control endeavors to maintain astabilized parity of 8.22 lire in terms of the dollar.

New dollar par of the lira is 8.91. In Thursday'smarket the unit dropped to 8.14. Italy is only nomi-nally on the gold standard. Whether or not warfinally comes, it is generally believed that the Italianunit will decline still further, as Italy is bound to losea large percentage of its gold reserves and will findit extremely difficult to effect a reduction in her im-port surplus for some years.The following table shows the relation of the lead- ,

ing European currencies still on gold to the UnitedStates dollar:

Old DollarParity

New DollarParity

France (franc) 3.92 6.63Belgium (belga) 13.90 16.95Italy (lira) 5.26 8.91Switzerland (franc) 19.30 32.67Holland (guilder) 40.20 68.06

RangeThis Week

6.593j to 6.6116.81 to 16.848.14 to 8.1832.52 to 32.6267.61 to 67.72

The London check rate on Paris closed on Friday at74.90 against 75.17 on Friday of last week. In NewYork sight bills on the French center finished on Fri-day at 6.593/g, against 6.60% on Friday of last week;cable transfers at 6.593 against 6.61/, and com-mercial sight bills at 6.563., against 6.58/. Ant-werp belgas closed at 16.813/ for bankers' sight billsand at 16.82 for cable transfers, against 16.83 and16.84. Final quotations for Berlin marks were40.20 for bankers' sight bills and 40.21 for cabletransfers, in comparison with 40.24 and 40.25.Italian lire closed at 8.13 for bankers' sight bills andat 8.14 for cable transfers against 8.173/i and 8.183/2.Austrian schillings closed at 18.90 against 18.95;exchange on Czechoslovakia at 4.1334, against4.1434; on Bucharest at 0.81, against 0.85; on Polandat 18.86, against 18.92; and on Finland at 2.18'Aagainst 2.203(. Greek exchange closed at 0.933/2 forbankers' sight bills and at 0.94 for cable transfers,against 0.93% and 0.9434.

EXCHANGE on the countries neutral during thewar is irregularly lower in sympathy with thetrend of sterling, the French franc and the belga.Independently of this movement, the Dutch guilderis showing exceptional weakness. Dollar parity ofthe guilder is 68.06. Frequently during the week th

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