The Financial SituationDESPITE the continuing uncertainty and wide-spread uneasiness concerning the possibilities ofthe gold clause situation, the usual business indexescontinue to rise. The automobile industry appar-ently is working at a rather unusually high rate, andthe steel industry, partly as a result of the activityof the motor industry, continues to show a risingtrend of operations. Retail trade is said to be fairlygood at present, showing no marked indication offalling off in the immediate future. Of course thereare a number of important industries which arenot enjoying any great improvement, but therate of activity generally is unquestionably mak-ing a much better showing than profit and lossaccounts.Thus the general course

of business seems to be fol-lowing the pattern carvedout last year, and for muchthe same reasonhugeGovernment expendituresof fiat deposits. Recentfigures from Washingtonindicate that the FederalGovernment during thefirst seven months of thecurrent fiscal year has ex-pended more than ,000,-000,000 as compared withsomewhat more than $3,-500,000,000 last year, andthat during this period thegross deficit amounted toabout $2,000,000,000, ascompared with approxi-mately $1,900,000,000 lastyear. These huge funds arebeing poured out in reliefpayments, subsidies and inother ways in such afashion that they find theirway quickly into the handsof consumers who prompt-ly use them for their day-to-day needs. The situa-tion in New York City maynot be, and probably isnot, quite typical of thecountry as a whole, but in a general way the situationis about the same all over the country. The Com-missioner of Public Welfare of this city, in an officialreport on Wednesday, asserted that the volume ofrelief provided here during the month of Januarybroke all previous records, and added that furtherincreases are now taking place daily, so that the costof the program for the month of February is expectedto reach $19,000,000.

Outlook for the Future

This general state of affairs naturally gives rise toskepticism concerning either the solidity or the en-during quality of the improvement that is now beingreported. This doubt, which is expressed in mostquarters, is strengthened by the suspicion, if it is notmore than a suspicion, that there is a great deal ofanticipatory production proceeding in various branchesof industry, that is to say, production in excess of

consumption, with the result that stocks are beingaccumulated which may or may not be promptlyabsorbed, but which in any event are likely to befully absorbed within a reasonable length of time onlyif current production is presently reduced well belowcurrent levels. Whether, as was the case last year,production is being accelerated because of the fear oflabor troubles or greater cost at a later date, isdifficult to determine at present, but recent scatteredlabor difficulties and reports of a number of labor"situations" have again brought the possibility ofinterruptions of production to the attention of thepublic.Last year relief and other similar payments were

substantially reduced in the spring, and there promptly

followed a decided curtail-ment of business activity.Presumably relief expendi-tures will be reduced againthis spring. The matter isrendered somewhat ob-scure, however, by the na-ture of the work relief pro-gram which, at the Presi-dent's insistence, is appar-ently on its way throughCongress. It has previ-ously been pointed out inthese columns that strictadherence to all of the con-ditions laid down by thePresident regarding work-relief expenditures is im-possible if the funds re-quested are to be dis-bursed at all. The purposeof the scheme is to providework for those who cannotobtain employment else-where. Now private em-ployment is normally moreabundant in the spring,summer and early autumnthan during the winter.On this basis the expendi-tures of the Governmentfor work relief ought to beproportionately lower dur-

ing these months. But the funds for which the Presi-dent has asked in the name of work relief are sup-posed to be used also for useful construction andother productive effort of a like sort. Most of thistype of work can be much better carried forward inopen weather, and is normally done in large partduring the warmer weather. It is therefore impossi-ble to be very certain whether or not the work reliefauthorities, assuming the final passage of the .pend-ing bill in substantially its present form, will curtailactivities during the warmer months this year.

Work Relief in the SenateOf course at the present moment the whole matter

is more difficult to appraise by reason of the fact thatthe relief measure which the House passed last weekwithout important change is being studied with muchmore care and discrimination by the Senate Appro-priations Committee, headed by the redoubtable

Planned Economy on a World BasisThe Secretary of Commerce came forward

on Wednesday before the Senate AgriculturalCommittee with the suggestion that an in-ternational body be created whose functionshould be to allocate the world output ofgoods."If these assignments were given and the

nations of the earth . . . could compel themember nations to stick by their quotas thequestion of overproduction and surpluseswould be wiped out in a very short time," theSecretary explained.

It seems to us that the Secretary, who isusually one of the more conservative andsensible of the President's advisers, has hereunfortunately strayed from the path of hardcommon sense. He is really suggesting whathas become known as planned economy, thistime on a world-wide basis, and to say nothingof the purely practical difficulties in the wayof any such program, human foresight andwisdom have not reached the stage where any-thing of this sort is feasible, and in ouropinion never will.

All sensible people, however, must sympa-thize with the objective that the Secretaryhas in view, which is presumably that of con-signing. to each country the task of doing forthe world what it is best fitted to do. Thisis usually described as international divisionof labor.We venture to suggest to the Secretary that

the best method of accomplishing this end isthat of simply reducing as far and as rapidlyas possible the host of arbitrary barriers de-structive to international commerce.What the President has recently called "the

laws of natural economics" would then dothe allocating the Secretary has in mind farmore wisely than any board could hope to do.

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678 Financial Chronicle Feb. 2 1935Senator Glass. The measure has been before thecommittee for some days, and up to the moment ofthis writing there is little evidence as to when it islikely to be reported by that committee, or in whatform. The members of the committee apparentlyare deeply dissatisfied with the lack of informationin their possession concerning the purposes for whichthe funds are to be disbursed, and determined, ifpossible, to obtain more data upon this importantaspect of the matter. According to dispatches fromWashington, the committee has secured promisesfrom some of the representatives of the Adminis-tration that more information will be forthcoming.The most that Senator Glass has vouchsafed to thepublic is that the bill in some form will probably bereported before Feb. 10, at which time existingemergency relief funds will have been exhausted. Itseems safe to suppose that direct relief distributionswill continue for the remainder of this winter, butwhat will take place when the work relief regime issupposed to replace the present system is difficultto surmise at this time.

The RFC

THE bill continuing the life and extending thelending powers of the Reconstruction FinanceCorporation has now become law. Presumably thegeneral scope of its operations will be broadened inseveral directions, notably in the purchase of rail-road obligations and in the mortgage lending field.Such lending may have an important effect upon thecourse of business in some directions, but more exactappraisal must await more precise information.

The Gold Clauses

THE gold clause question still remains in therealm of uncertainty and speculation. Possibly,but by no means certainly, the Supreme Court willhand down its decision on Monday. Naturally thereis no way of knowing what position or positions theCourt will take, and likewise no way of guessingwhat Congress will do in the event the Court rulesadversely to the Government or to what the Govern-ment desires in the matter of the clauses in privatecontracts. Reports have been in circulation forsome time past that the Administration has workedout a program to be put into operation at once insuch a contingency. No definite confirmation ofthese reports is available, however, and certainlyno reliable information as to what this course ofaction will be. There is a considerable amount ofgossip on the latter subject which is not particularlyencouraging, assuming that these reports have anyreal basis in fact. The plans thus attributed to theAdministration range all the way from complicatedschemes for maintaining one theoretical gold pricein the domestic market and another actual price inthe international market, to plans for having theStates under whip and spur agree over night to anamendment to the Constitution definitely givingCongress the power to do what it wishes in thismatter. We of course have no way of knowing which,if any, of these schemes are under serious considera-tion in Washington. But the very nature of them,and the persistence with which they are attributedto official circle's seem to us to indicate that eitherthe Administration or substantial sections of thegeneral public or both have but a poor understand-ing of the problems involved and of the nature ofthe solutions required.

The prediction by the Attorney General of theserious consequences in case the Supreme Courtshould uphold the gold clauses seems to have madea more widespread impression in the financial com-munity than we wish were the case. There are agreat many who, even though not particularly insympathy with the original action of the Govern-ment in devaluing the dollar, now earnestly arguethat having adjusted ourselves to the monetarysituation thus imposed upon us we should not nowbe asked to reverse the process and again readjustourselves to a dollar of the old weight and fineness.Thus they are inclined to support various plansby which Congress would undertake to offset a rul-ing by the Court upholding the gold clauses. Itseems to us that all such reasoning proceeds froma false premise. As a matter of fact, only in a ratherlimited degree have we adjusted ourselves to thenew dollar. Certain commodities definitely subjectto the world markets have had their prices adjustedto the new conditions. The official exchange rates,for instance, have in large measure undergone suchan adjustment.

Price Level UnadjustedBut the fact remains that our price level in gen-

eral has been subjected to no such adjustment. In-deed, prices of many important export products havenot been adjusted to allow for the fall in the goldvalue of the dollar. Nor is such adjustment likelywhile existing trade barriers prevail, except over along and difficult period of time. Meanwhile thefailure of prices to adjust themselves has, along withcertain other factors, given rise to extremely un-sound international financial relationships. During1934 our merchandise export balance amounted to$478,000,000, according to figures just published bythe Department of Commerce. During the sameperiod of time our net imports of gold came to $1,-134,000,000, and our net imports of silver to $86,-000,000. To many it may seem too extreme a state-ment to say that in circumstances of this sort we arevirtually giving away our exports, since we reallyhave no earthly use for more gold and silver. Per-haps a more moderate statement of the case wouldbe more appropriate, but it certainly cannot be saidthat we as a people have received much of real valuefor the goods we have sent abroad, over and abovethose paid for by imports of goods for which wehave need.

Adjustment IncompleteAt any rate, it is clear from what has been said

that we have not by any means completed the ad-justments dictated by the drastic change effected inthe gold value of our currency. It seems to us in-deed that to continue the dollar at its present goldvalue must entail further adjustments fully astroublesome as a return at this time to the old goldvalue. Moreover, the state of affairs when the latteradjustment is completed would, in our opinion, bemuch sounder than that likely to obtain if we con-tinue in the other direction and attempt to carrythrough all the changes prompted by the presentlow dollar in terms of gold, which would, so wethink, involve a further enormous accumulation ofuseless gold and silver in our vaults, and thus makeit extremely difficult for other countries to restoretheir currencies to a sound gold basis. It is for rea-sons of this sort that we should welcome a forth-right decision on the part of the Supreme Court up.

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Volume 140 Financial Chronicle 679holding the gold clauses and interpreting them tomean what they are supposed to mean, to be fol-lowed by action on the part of Congress correctingits grievous error of ever tinkering with the goldcontent of the dollar.

The Administration and Congress

THE inability of the Administration to induce theSenate to approve our entry into the WorldCourt has raised the question in many minds as tothe extent that it will be able to force its will uponCongress in a number of other issues. The difficultybeing experienced by the relief bill in the Senatehas added to the uncertainty in this respect. Werethere good assurance that Congress, if free fromExecutive domination, would pursue a reasonableand constructive course, the possibility of a moreindependent legislative branch of the Federal Gov-ernment during the remainder of the current sessionwould be heartening indeed. The trouble lies in thefact that there are many members of influence inCongress whose ideas are even less worthy of sup-port than those of the Administration. This is per-haps conspicuously true of the so-called social se-curity program. If the President should feel itnecessary to compromise with the followers ofSenator Townsend in this matter and was able bythis means to obtain social insurance legislation, theresults might be much worse than if the Presidenthad his own way fully. It is likewise a fact that aloosening of the President's grip upon Congresswould greatly enhance the prospect of the adoptionof harmful bonus legislation this winter.On the other hand there is the likelihood that Con-

gress, with the driving leadership of President Roose-velt ineffective, would become so embroiled in in-ternal disputes and differences of view that it wouldfind itself unable to adopt any legislation on sev-eral important matters.It would be fortunate indeed (although we fear

that it is highly improbable) if for reasons of thissort the Administration were to find itself obligedto modify its relief plans greatly, converting theminto a much more modest program designed to pro-vide the minimum of absolutely unavoidable reliefat the least possible expense. If controversies ofthis nature were to succeed in preventing any socialinsurance legislation at all this winter, the countrywould have cause to rejoice. There are a numberof other points at which similar observations couldequally well be made. The social insurance program,though for the moment pushed into the background,is particularly to be avoided if that is at all possible.The delay and the confusion occasioned by theapparently rather heated disputes that are spring-ing up around the President's legislative proposalsought to provide an opportunity for the commonsense of the nation to assert itself in respect to thehazardous fundamental nature of the sweepingsocial security proposals now before Congress andthe country.

Social Security Program Hazardous and FutileAt any rate, it is to be hoped that some of the

deep-lying fallacies of the notions embodied in theseproposals may obtain the consideration they deservefrom all those in a position of influence through-out the country. It ought not to be difficult for theaverage business man to come to a realization ofthe fact that unemployment insurance, for ex-ample, as conceived in Washington, is an economic

absurdity quite apart from the administrative haz-ards inherent in undertaking any such extendedoperations as are now being planned. Let him askhimself just how it is possible to store purchasingpower during periods of prosperity to be carriedforward for use in times of depression and unem-ployment. There can be no serious question of stor-ing up goods for such a purpose, since there is not,and has not been, even during this unusually diffi-cult depression, any shortage of goods or the physi-cal equipment to produce goods. If funds are in-vested in securities, whether government or other,they find their way directly or indirectly into physi-cal goods. In cash? This is an impossibility if busi-ness is to be kept going normally, since the hoardingof enormous sums would leave insufficient funds withwhich to take up the products of industry whosecreation produced the income thus hoarded. Ofcourse it is possible to go through a good many mo-tions that seem to the unthinking to be storing some-thing that can be employed to relieve the unemployedat a later date, perhaps meantime offsetting or con-cealing the true nature of what is going on by fur-ther inflationary credit expansion at the banks. Butwhen the time comes to convert the securities, orwhatever has been thus stored, into actual relief tothe unemployed, it will be found that such conver-sion can be accomplished only by just the sort ofinflationary action on the part of the banks that wehave been witnessing for the past few years in con-nection with the current relief program.

Similarly difficult economic problems arise in con-nection with efforts to institute any such sweepingprograms for old age pensions as those now beforethe country. Though the President has on severaloccasions soothed uneasy minds by soft words aboutactuarial principles, the experts who have been ad-vising the Administration have evidently been un-able to shut their eyes entirely to the difficultiesinherent in the tasks assigned them. This is shownby the fact that they themselves have been obligedto admit that a reserve of $75,000,000,000 would berequired if the old age pension plan they were recom-mending were to be placed upon a really actuarialbasis. Now of course it is obvious that there is noway under the sun by which the nation could addany such amount to its savings overnight, and nofeasible plan by which any such proportion of exist-ing savings could be segregated and earmarked forthe care of the aged in future years. They havetherefore been obliged to propose the weak substi-tute of having the Government assume on this ac-count liabilities whose capitalized value runs to thisastronomical figure. To the extent of this sum,therefore, we are giving individuals in the popula-tion future claims upon a fund against which nosavings have been accumulated at all. Levies arenonetheless to be laid from which current paymentscan be made. In time these are expected to accumu-late to the amount of about $15,250,000,000, and toremain at about that figure. The fund thereforewill always remain insolvent in the sense that itsliabilities will exceed its assets.It is assumed apparently that this latter amount

will represent a net addition to the savings of thecommunity. Indeed it appears necessary to makesome such assumption if the claim is to be made thatas a people we are really laying aside a sum to pro-vide for the aged in our midst. As for ourselves, weconfess doubt as to whether true savings will thus

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680 Financial Chronicle Feb. 2 1935be increased in any such volume. We think it morelikely that the savings of the community will in alarge measure simply be transferred in time fromthe savings banks and other institutions now caringfor savings to the insurance fund, that the savings ofthe community will be used in much larger degreethan now in the financing of consumption, or thatthe banks will in larger degree directly or indirectlyfinance current consumption, so that in a broadersense there will be no net additions to savings tocorrespond to the amounts accumulating in thefunds in question. But assume for the moment thatthe social reformers are correct in their assumptionthat their plans will really result in such a largeincrease in the rate of savings. Of course any suchassumption implies a corresponding reduction inthe rate of current consumption. Think of therepercussions in the whole econoniic system thatwould inevitably be produced by any such vastvolume of forced savings. If any interruption of therapid and pro forma course of Administrationmeasures through Congress can be utilized to in-duce serious thought on the part of the members ofthe legislative branch concerning these more basicaspects of this whole matter, the country will havecause for satisfaction.

Federal Reserve Bank Statement

TO the long recent succession of high records inavailable bank credit another must be addedthis week. The Federal Reserve Bank statement forthe week to Wednesday reflects an addition of nearly$41,000,000 to the total of member bank deposits onreserve account, which now are virtually double therequirements of about $2,300,090,900. Excess re-serves over requirements have been mounting withonly seasonal interruptions for more than a yearat an inordinately rapid pace, and the current totalof more than $2,200,000,000 is the highest figureso far attained. The further swift increase nowreflected took place despite a reversal of the recentdownward trend of currency in circulation. FederalReserve notes showed a modest gain in the periodcovered by the report, while the total money incirculation increased $11,000,000. The trend ofthe circulation figures is normal for this time ofyear, and the upward movement, which now marksthe end of the post-holiday decline, can be expectedto continue into the Spring. It is patent, however,that the aggregate of $3,068,172,000 in Federal Re-serve notes, and more especially the total of $5,358,-000,000 in all forms of the circulating medium, signi-fies only a slow diminution of the hoarding whichtook place at the time of the banking crisis.The monetary gold stock of the country increased

sharply by no less than $79,000,000 in the week ofthe report, and most of this sum promptly was trans-ferred by the Treasury to the Federal Reserve Banks,which show an increase of their gold certificate hold-ings to $5,350,959,000 on Jan. 30 from $5,281,298,000on Jan. 23. But other forms of reserves were slightlylower, and the total reserves increased only to $5,-647,154,000, from $5,585,096,000. Federal Reservenotes in actual circulation advanced to 43,068,172,-000 from $3,066,915,000, while the net circulation ofFederal Reserve bank notes also increased a littleto $25,697,000 from $25,683,000. Member bank de-posits on reserve account were up to $4,541,755,000from $4,500,919,000, and the deposits with theSystem were augmented further by increases in

those of the United States Treasury on general ac-count and in other deposits, so that total depositswere $4,792,450,000 on Jan. 30, against $4,738,230,000on Jan. 23. Because of the increase in total reserves,which more than offset the advance in deposit lia-bilities, the ratio of total reserves to deposit andnote liabilities combined increased to 7L8% from71.6%. Borrowings from the System declinedslightly in the week to $7,058,000 from $8,688,000,but industrial advances moved up with comparativerapidity to $17,493,000 from $15,636,000. Openmarket bill holdings of the Reserve banks were only$1,000 lower at $5,538,000, while holdings of UnitedStates Government securities were up $6,000 at $2,-430,270,900.

Foreign Trade in December

THE report of the foreign trade of the UnitedStates for the month of December shows areduction. Both exports and imports were againlower in value than for the preceding month, as wellas for December, 1933. The decrease in exports froma year ago was quite heavy, and compares with anincrease for every month for more than a year, orback to May, 1933. The decline was largely in theforeign shipments of cotton for that month. Thishas now been a marked feature of the export tradestatement for over a year. Imports in Decemberwere lower, but the decline from a year ago wassmall.Merchandise exports for the closing month of last

year amounted to $170,676,000, the excess of exportsbeing $38,424,000. For the preceding month, exportswere valued at $194,909,000 and imports $150,919,-000, exports in that month exceeding imports by$43,990,000. For December, 1933, exports amountedto $192,638,400, and imports for that month were$133,518,000. Exports in December last were lessthan for any month since July last, while the reduc-tion in imports went back only to October.For the calendar year 1934, merchandise exports

were valued at $2,133,414,000, and imports $1,655,-049,000, the former exceeding imports by $478,365,000.For the year 1933, exports amounted to $1,674,994,-000, and imports $1,449,559,000, the excess of exportsbeing $225,435,000. The increase in exports last yearover the preceding year was $458,420,000, equal to27.9 per cent. In the same comparison as to im-ports, there was an increase of $205,490,000, therecord for 1934 being 14.2 per cent higher than inthe preceding year. Both exports and imports forthe year just closed were larger than in both 1933and 1932, but with the exception of those two years,it is necessary to go back to 1911 for correspond-ingly low totals.The decline in cotton shipments in the closing

month of last year was quite as heavy as it had beenin the months immediately preceding. Exports ofcotton in December were 519,986 bales, comparedwith 837,756 bales for that month of 1933. Cottonexports in December are usually close to the highpoint of the year and generally exceed one millionbales. The value of cotton exports for the closingmonth of 1934 was $34,988,251, compared with $44,-296,356 for the same month in the year preceeding.Cotton exports last year declined to 5,942,122 bales,which was an unusually low total; in 1933 the move-ment amounted to 8,532,423 bales. The size of thecotton crop is more or less of a controlling factorin the movement abroad of cotton. Last year's ex-

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Volume 140 Financialports of cotton were considerably below most otheryears for a long time past. The decline in importsin December last was largely in raw silk and hides -and skins. Imports of crude rubber and cane sugarwere larger.Imports of gold for the closing month of last year

continued heavy. The value was $92,249,000, whileexports were only $140,000, the lowest since July.Gold imports in 1934 were $1,186,671,000, a recordamount, and exports $52,759,000, the excess of im-ports being $1433,912,000. In no previous year dothe excess figures in either direction compare withthe return for 1934. Silver imports in Decemberwere again quite heavy, although below the fourmonths preceding. The value was $8,711,000. Forthe year silver imports reached a high point at $102,-725,000. Exports of silver in December were $1,-014,000.

The New York Stock MarketLL departments of the New York securities

market were exceptionally dull this week,with movements somewhat irregular. There was anobvious unwillingness on the part of traders andinvestors to engage in new commitments until thegold clause situation is clarified, and in this situa-tion the modest liquidation outweighed the buyingin importance and the more pronounced price move-ments of the week were toward lower levels. Changeswere modest at all times, however, and no great vari-ations are to be reported for the period. Much di-versity of opinion existed regarding the possible find-ings of the Supreme Court on the four gold clausecases now before it for settlement. Nor is it knownwhen the opinions will be handed down, althoughmost observers hold that the decisions will be madeavailable next Monday. Foreign exchanges movedwidely and jerkily early in the week, as banks re-fused to engage gold in large quantities, but theTreasury's stabilization fund was employed to steadythe markets and conditions more nearly approxi-mated what has come to be regarded as normal,thereafter. Trade and industrial indices remainedfavorable, on the whole, but these failed to affectthe trend.The most active stock trading of the week oc-

curred on Monday, when the turnover on the NewYork Stock Exchange was only 692,010 shares, subse-quent dealings hovering around the 500,000 sharemark. Initial price movements were almost uni-versally lower, with losses in some leading issuesamounting to as much as 2 and 3 points. The down-ward movement was continued Tuesday, when pre-ferred stocks suffered more than others. Some ofthe rail equipment common stocks resisted the trend,but the great bulk of issues closed lower. Overnightpublication of the United States Steel Corporationreport for 1934 failed to stimulate trading onWednesday, even though the showing comparedfavorably with 1933. There was a better tone, how-ever, and numerous small gains were recorded in allgroups of issues. The dulness continued on Thurs-day, with further small gains in evidence, mainlyin the carrier issues. The report of Joseph B. East-man, the Federal Railroad Co-ordinator, made afavorable impression, owing to his recommendationfor control of competing modes of transportation,but his suggestion for easier reorganization of thecarriers was disliked. Railroad stocks improvedmodestly in these circumstances, while other groups

Chronicle 681also gained. The tendency yesterday was towardlower figures, as the impending gold clause decisionshung over the market. Trading was very slow, how-ever, and movements remained quite modest.In the listed bond market conditions closely re-

sembled those prevalent in equities. There wasslight improvement in high-grade bond quotationsduring the initial session of the week, but thereaftera slow decline took place. Speculative bonds drifteddownward, with a small rally in low-priced rails onThursday about the only important variation.There was a better atmosphere in foreign bonds. Incommodity markets movements were irregular andquite similar to the small changes in securities.Here also, the gold clause decisions were awaitedwith what patience could be mustered. Foreign ex-changes moved erratically until the stabilizationfund was brought to bear and adjusted the relation-ships. Steel-making operations for the week endingto-day were estimated by the American Iron andSteel Institute at 52.5% of capacity against 49.5%last week. Demand for automobile steel now is atits peak, however, and a recission is looked for inthe not distant future. Electric power productionthroughout the country was 1,781,666,000 kilowatthours in the week ended Jan. 26, the Edison ElectricInstitute reports, as compared with 1,778,273,000kilowatt hours in the preceding week. Car loadingsof revenue freight for the week to Jan. 26 amountedto 555,768 cars, a decrease of 7,187 from the previousperiod, according to the American Railway Asso-ciation.As indicating the course of the commodity mar-

kets, the May option for wheat in Chicago closedyesterday at 961/8c. as against 97Y2c. the close onFriday of latt week. May corn at Chicago closedyesterday at 84c. as against 85c. on Friday of lastweek. May oats at Chicago closed yesterday at49%c. as against 511/2c. the close on Friday of lastweek. The spot price for cotton here in New Yorkclosed yesterday at 12.55c. as against 12.65c. theclose on Friday of last week. The spot price forrubber closed yesterday at 12.62c. as against 12.75c.the close on Friday of last week. Domestic copperclosed yesterday at 9c., the same as on Friday oflast week.In London the price of bar silver was 24 5/16

pence per ounce as against 24% pence per ounce onFriday of last week, and spot silver in New Yorkat 531/2c. as against 543/0. on Friday of last week.In the matter of the foreign exchanges, cable trans-fers on London closed yesterday at $4.871/8 asagainst $4.87% the close on Friday of last week,while cable transfers on Paris closed yesterday at6.56%c. as against 6.531/2c. on Friday of last week.Dividend actions taken during the week includedthe declaration by the Green Bay & Western RR. ofa dividend of 21/2% on the class A debentures and1% on the capital stock, both payable Feb. 11, outof net earnings for the year 1934. One year ago 3%was paid on these issues, and on Feb. 20 1933, 2Y2%each. On the New York Stock Exchange 93 stocksreached now high levels for the year, while 296stocks touched new low levels. On the New YorkCurb Exchange 86 stocks touched new high levelsfor the year, while 124 stocks touched new low levels.Call loans on the New York Stock Exchange re-mained unchanged at 1%.On the New York Stock Exchange the sales at

the half-day session on Saturday last were 322,810

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682 Financial Chronicle Feb. 2 1935shares; on Monday they were 692,010 shares; onTuesday, 574,890 shares; on Wednesday, 426,040shares; on Thursday, 525,330 shares, and on Friday,493,580 shares. On the New York Curb Exchangethe sales last Saturday were 65.025 shares; on Mon-day, 123,312 shares; on Tuesday, 127,425 shares; onWednesday, 108,155 shares; on Thursday, 126,810shares, and on Friday, 120,125 shares.The stock market the present week again experi-

enced dull and irregular sessions, which may beattributed in a large degree to the uncertainty ofthe pending decision of the Supreme Court on thegold clause suits. At the close yesterday prices warelower than for the same day one week ago. GeneralElectric closed yesterday at 231/2 against 237/8 onFriday of last week; Consolidated Gas of N. Y. at19% against 207/8 ; Columbia Gas & Elec. at 7 against71/8; Public Service of N. J. at 257/8 against 271%;J. I. Case Threshing Machine at 54% against 557/8;International Harvester at 411/4 against 41%; Sears,Roebuck & Co. at 331/2 against 34%; MontgomeryWard & Co. at 25% against 26%; Woolworth at541/4 against 53; American Tel. & Tel. at 105 against1041/4, and American Can at 112 against 1141/2.

Allied Chemical & Dye closed yesterday at 135against 136 on Friday of last week; E. I. du Pontde Nemours at 94 against 941/2; National Cash Reg-ister A at 16% against 16%; .International Nickelat 23 against 231%; National Dairy Products at 16against 16; Texas Gulf Sulphur at 35 against 34;National Biscuit at 281/4 against 291/4 ; ContinentalCan at 651/2 against 65; Eastman Kodak at 113against 114; Standard Brands at 17% against 17%;Westinghouse Elec. & Mfg. at 371/8 against 38%;Columbian Carbon at 71 against 701%; Lorillard at191/2 against 20%; United States Industrial Alcoholat 361/2 against 39; Canada Dry at 131/8 against 15;Schenley Distillers at 25 against 26, and NationalDistillers at 261/2 against 26%.The steel stocks at the close yesterday touched

lower levels than on Friday of last week. UnitedStates Steel closed yesterday at 36% against 37%on Friday of last week; Bethlehem Steel at 297/8against 311/4 ; Republic Steel at 137/8 against 141/2,and Youngstown Sheet & Tube at 181/2 against 191/2.In the motor group, Auburn Auto closed yesterdayat 241/4 against 237/8 on Friday of last week; GeneralMotors at 307/8 against 31%; Chrysler at 371/8against 38, and Hupp Motors at 23% against 27/8.In the rubber group, Goodyear Tire & Rubber closedyesterday at 221/4 against 23 on Friday of last week;B. F. Goodrich at 97/8 against 101/4, and U. S. Rubberat 14 against 14%.The railroad shares also record declines over the

close on Friday a week ago. Pennsylvania RR.closed yesterday at 211/8 against 221/4 on Friday oflast week; Atchison Topeka & Santa Fe at 437/8against 48%; New York Central at 17% against183/4 ; Union Pacific at 101 against 1057/8 ; SouthernPacific at 151/2 against 151/2; Southern Railway at12% against 13%, and Northern Pacific at 173%against 177/8. Among the oil stocks, Standard Oilof N. J. closed yesterday at 401/2 against 421/8 onFriday of last week; Shell Union Oil at 67/8 against71/4, and Atlantic Refining at 24% against 24%. Inthe copper group, Anaconda Copper closed yester-day at 10% against 10% on Friday of last week;Kennecott Copper at 16% against 161/2; AmericanSmelting & Refining at 34% against 35%, andPhelps Dodge at 141/4 against 14%.

European Stock MarketsI N A SERIES of uncertain and irregular markets,

prices of securities generally worked lower thisweek on stock exchanges in the leading Europeanfinancial centers. Gyrations in the foreign exchangemarkets affected all the securities exchanges, thepersistent strength of the dollar early in the weekbeing quite disconcerting, since there was littleoportunity to offset it through gold engagements.Banks felt reluctant to contract for gold in viewof the possibility that the United States SupremeCourt might rule against the Government in thegold clause cases, and thus produce new uncertaintyin the monetary situation. The London market wasaffected not only by such considerations, but also bya renewal of political activity and the collapse,Wednesday, of a large London grain firm. The col-lapse was followed by sharp recessions in some com-modities and many speculative securities. InFrance, estimates of the Government's borrowingin 1935 were revised steadily upward this week, andnow are placed at between 15,000,000,000 and 20,-000,000,000 francs. The prospect of a real deficit ofthese proportions was not helpful, even though JeanTannery, the new Governor cof the Bank of France,made a plea for joint monetary stabilization by theUnited States and Great Britain, and stoutly in-sisted that the franc must not be devalued, when hesubmitted the annual report of the French centralbank to its stockholders, Thursday. The FrenchParliament concluded, on Tuesday, its passage ofthe bill authorizing the issuance of 15,000,000,000francs short-term French Treasury bonds, which areto be discounted with greater facility hereafter bythe Bank of France. In Germany, also, proposalsnow have been made for extraordinary expedientsin Government financing. With all these adversefactors to contend with, it is hardly a matter forsurprise that the markets were in a dubious mood.Trade reports in all European countries remain in-conclusive for the time being.On the London Stock Exchange a sharp dip in the

dollar caused uncertainty, Monday, and the marketfor securities followed an irregular course. Britishfunds dipped and losses also were general in theindustrial section, while most foreign securities like-wise receded, with unfavorable week-end reportsfrom New York a factor. Gold mining stocks suf-fered from the new uncertainty on the value of thatmetal, occasioned by the gold clause litigation inthe United States. The market again was quiet onTuesday, with the tone slightly better. Britishfunds remained in ample supply, but in the indus-trial department gains and losses appeared in ap-proximately equal numbers. International issuesof all descriptions lost ground, but some gold miningstocks reflected improved demand. Dealings werekept to a small scale on Wednesday by the failureof an important grain firm on the Baltic Exchange.Although the Stock Exchange was not directlyaffected, this incident produced a .general atmos-phere of caution and some precautionary liquida-tion. The sales were readily absorbed, however, andchanges were small. British funds were unchanged,while losses predominated in the industrial section.Gold mining stocks continued their improvement,until the official close, but thereafter a sharp dropdeveloped in some Australian gold mining stocks.When the official trading was resumed, Thursday,the overnight fall in Australian mines caused gen-

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Volume 140 Financial Chronicle 683eral uneasiness and all speculative markets felt theeffects. Gilt-edged bonds were firm as funds weretransferred to that section, but industrial and Aus-tralian gold mining issues remained dull. Inter-national securities had a better tone, owing to im-proved advices from New York. The uncertaintiesof the grain firm collapse were overcome yesterday,and improvement was noted in all departments ofthe market. Activity also increased, owing to thebetter tone.Nervousness regarding the international currency

situation prevailed on the Paris Bourse in the initialtrading session of the week, and all securities weremarked lower. Fears were expressed that the goldclause decision might go against the United StatesGovernment and result in upward revaluation of thedollar. French opinion in general would favor sucha development, but the intervening period of uncer-tainty would be viewed with distaste. This matter,coupled with the indications of French Treasuryresort to bank financing, caused general liquidation.Rentes, French equities and international securitiesall suffered in the movement. The tendency wasbetter on Tuesday, with business on a very modestscale. Small purchases sufficed to lift quotations,and the gains were almost as marked as the lossesof the preceding period. In an equally dull market,Wednesday, prices again turned downward in mostsections of the market. Rentes held better thanFrench bank, industrial or utility stocks. Interna-tional securities drifted lower. Once again thetendency was reversed on Thursday, largely owingto the favorable annual report of the Bank of France,which Governor Jean Tannery submitted on thatday. Rentes made slight advances; French bankstocks also moved upward, while other equities andinternational issues showed better gains still. Fur-ther gains were registered in a more active sessionyesterday. Confidence increased and demand ap-peared for all types of issues.On the Berlin Boerse trading in newly

-convertedbonds overshadowed the dealings in Monday's ses-sion. Under a Government order, many mortgagebonds were reduced in yield from 6% to 4%, andsharp reductions in market quotations followed thechange on Monday. Most German equities also lostground, although a few scattered gains appearedamong the heavy industrial issues. The tone wasbetter, Tuesday, on reports that the conversion oper-ation was a "success." Bonds came into better de-mand and that section of the market steadied. Ageneral advance took place in stocks of all descrip-tions. In an uncertain market, Wednesday, mostmovements were toward higher levels. A few ad-vances of 2 to 3 points were reported in equities,while most of the bond market was firm. Irregu-larity again prevailed on Thursday, with the chiefmovements downward. All parts of the marketwere affected, but most losses were measured onlyin fractions and dealings were on a smaller scalethan earlier in the week. There was a better toneon the Boerse yesterday, and losses of the previoussession easily were regained.

World Court Adherence Denied

DESPITE earnest efforts by the Administrationand eloquent pleas by' its spokesmen, Amer-ican adherence to the permanent Court of Interna-tional Justice was defeated in the United StatesSenate, Tuesday, when the final vote was taken on

the three protocols for American entry. The voteof 52 for adherence to 36 against proved a distinctsurprise, owing to the Democratic strength in theupper Chamber. Since the Congressional electionsof last November it had been assumed that almostany measure with full Administration supportwould be sure of passage in this session. Whenthe debates reached their climax, however, opponentsof American entry summoned all their resources andthe necessary two-thirds vote in favor of the pro-posal was lacking. The proponents of the measureneeded 59 votes in the Senate, and President Roose-velt made personal appeals to a number of Senatorsto support adherence, but these did not suffice tochange the result. The rebuff to the Administrationthus administered is a matter of primary im-portance, but no less significant is the internationaleffect. The protocols contained a reservation thatthe Court could not consider any matter in whichthe United States had or claimed an interest, overits protest. Defeat of American entry in these cir-cumstances emphasizes all the more clearly the evi-dent desire of the country to remain aloof from en-tangling alliances or arrangements, and it signi-fies a reaffirmation of the traditional American for-eign policy.The principle embodied in the World Court is that

of settling international disputes by juridical means,and it is hardly to be denied that this is an admirableideal. But it remains true that the Court has madeno great contributions toward peaceful settlementof vital issues that might result in resort to warfare.Until the nations as a whole show a greater desirefor amicable adjustment of really important issues,it is, perhaps, just as well that the recurrent effortsfor American adherence meet defeat in the UnitedStates Senate. Proposal for American adherence tothe World (Court have been under debate in thiscountry for a dozen years, and all Presidents haveconsistently favored entry in that time. Resolutionsfor American adherence, with reservations similarto those now proposed, were favored in 1926 by aSenate vote of 76 to 17, but some members of theCourt were not content with the reservations andthe project failed on that account. After much fur-ther consideration the three protocols now defeatedby the Senate were signed in 1929, and the assurancethen was extended that leading members of theCourt would accept the reservations. This seemedto bring American entry perceptibly nearer, butWashington observers now report that the dubioussituation in Europe, coupled with the defaults onwar debts by all major countries, did much to in-crease the general American opposition to entry.It is now believed in Washington that no furthereffort to obtain Senate consent to adherence willbe made for a long time to come.

Trade Agreements

THERE have been numerous reports recently ofreciprocal tariff agreements between theUnited States and other nations, and of impendingconversations regarding still further trade arrange-ments. The excellent agreement made with Cubalast summer stimulated interest in additionaltreaties. It was reported late last year that treatieswith Brazil, Colombia and Haiti were concluded,and the impression was given that they would besigned in the first few days of 1935. But signaturesto such documents still are lacking, and the texts

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6f34 Financial Chronicle Feb. 2 1935have not been divulged. In the case of Brazil, theproposed treaty arrangements were postponed whenthat country announced its decision to send a formalmission to the United States for discussion of debtand commercial problems. The mission, headed byFinance Minister Arthur de Souza Costa, arrived inNew York late last week and was promptly whiskedoff to Washington for discussions with State Depart-ment officials. In the meantime, the State Depart-ment has given notice of an intention to negotiatetrade pacts with Canada and Italy, as well as withthe dozen nations previously mentioned in this con-nection. Preliminary hearings before the Commit-tee for Reciprocity Information have been set forMarch 18 in the case of Canada, while the similarhearing on the Italian treaty is to be held March 4.In testimony before the Senate Agricultural Com-mittee, Thursday, Secretary of State Cordell Hullvoiced the opinion that all nations should considerin a general conference, ways and means of reduc-ing trade barriers and stimulating the internationalinterchange of goods.

Armaments

END, sea and air armaments promise to be a mat-ter for debate among the leading nations foryears to come, and any measures to be taken in thefuture almost of necessity will represent progresstoward limitation. After some years of discussionof land and air armaments, prospects for an agree-ment on limitation are slim indeed, but some meas-ure of control along lines suggested by the UnitedStates may prove possible. Arthur Henderson,President of the General Disarmament Conference,announced on Tuesday that the Committee on ArmsTraffic would meet in Geneva on Feb. 14 to examinethe American proposals for control of arms manu-facture and international traffic in armaments.The Conference has now been in progress almostexactly three years, as it was first convened, withfanfare and high hopes, early in February 1932. Itsachievements are quite unimpressive, and perhapsthe best thing that can be said about it is the evidentdesire of some leading countries to continue the con-versations. The American proposal for "control"is only a faint shadow of the original ideas of dras-tic reduction and limitation of land and air arma-ments considered when the Conference started, butany international agreement on the problem nowwould be considered a gain. It is possible, more-over, that greater accomplishments will prove feas-ible after some settlement is reached on the prob-lem of German rearmament, which now is underconsideration by British and French diplomatists.The problem of sea armaments limitation was

considered settled until the London conferences lastyear revealed the differences among British, Amer-ican and Japanese negotiators on this phase of thearmaments problem. Denunciation by Japan, atthe end of 1934, of the Washington treaty reopenedthe whole question of naval forces. In London andWashington, however, the hope prevails that anagreement will be attained on naval armaments be-fore the existing treaties expire at the end of 1936.Prime Minister Ramsay MacDonald was interpel-lated in the House of Commons, Monday, on thisproblem. The Prime Minister then declared that"his Majesty's Government would regard it as amatter of grave concern if there should be failureto negotiate, before the treaty terminated, a new

arrangement for limiting and regulating the futureconstruction of naval armaments." The frank andfriendly spirit that always has characterized therelations of the British and American Governmentswas emphasized by- Mr. MacDonald, who added thatthe Japanese decision caused sincere regret, sincethe Washington treaty served "the invaluable pur-pose of avoiding competition, with all its attendantevils of and extravagance." Contrastingsharply with the British declaration was a state-ment made in the Japanese Diet on the same day byAdmiral Mineo Osumi, Minister of the Navy in theCabinet of that country. The Japanese Governmentis doing its best to avoid a naval race, AdmiralOsumi declared, but if any such race develops thenthe Japanese people must be prepared to see itthrough "even if we are reduced to eating ricegruel."The recent naval negotiations in London were dis-

cussed in broad terms from the American viewpoint,Tuesday, by Norman H. Davis, American Ambassa-dor-at-Large, who headed the American delegationin the naval discussions. Speaking before the Coun-cil on Foreign Relations, at the Hotel Ritz-Carlton,New York, Mr. Davis expressed the opinion that anagreement can be reached, and he also attempted toallay any Japanese uneasiness over the extensiveAmerican building program. It was made plain,however, in this first address by the American Am-bassador since the negotiations ended, that theAmerican policy is unaltered. The United Statesholds firmly to the principle of "equality of secur-ity," he said, and regards the Japanese suggestionfor equality of armaments as "utterly incompatiblewith equal security." The significance of the 5-5-3ratio has been somewhat misunderstood, Mr. Daviscontinued. It has been erroneously considered bysome to mean or to imply a different degree ofnational prestige or sovereign right, whereas itmeans nothing of the kind. Military power consistsof a navy, an army and an air force, and the com-bined strength of Japan in these three branches ofarms is greater than that of the United States. Butthis does not affect the national prestige of theUnited States, he remarked. Mr. Davis declaredfallacious the theory that naval disarmament couldbe achieved by doing away with so-called "offensiveweapons," since it is impossible, in naval warfare,to differentiate between offensive and defensivearms. It was pointed out in this address that theUnited States has no territorial ambitions and nowis dedicated, in international affairs, to the policyof the good neighbor. "No other country needs tofear any serious disagreement with us unless it dis-regards treaties to which we are a party and invadesand impairs our rights," Mr. Davis said.

Franco-British Conversations

OFFICIALS of the British and French Govern-ments are to conclude in London, to-day, sev-eral days of negotiations regarding the effects ofGerman rearmament and the steps to be taken inorder to induce the Reich to return to the Leagueof Nations and sign the various regional securitypacts recently proposed. The conversations tooktheir rise from the change in the French Govern-ment, last year, and the more conciliatory attitudetoward Germany displayed by the present regimeof Premier Pierre-Etienne Flandin. 31. Flandin,together with his Foreign Minister, Pierre Laval,

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Volume 140 Financial Chronicle 685arrived in London late Thursday, on the invitationof the British Foreign Secretary, Sir John Simon,who was reported some time ago as believing thatthe time now is ripe for a real advance towardEuropean diplomatic adjustments. The BritishForeign Office pieced together an elaborate schemefor settlement of some outstanding matters, Londondispatches state, but as the details of the proposalbecame known they aroused a storm of oppositionin France. In the nationalist press of that countryand also in Parliament, Premier Flandin and For-eign Minister Laval were criticized sharply for con-templating such manifestations of "weakness." Theold cry was raised that France must arm ever moreheavily to combat the German menace. It is a fairguess that these developments have stiffened theattitudes of the two French negotiators, who arenow said to be far less eager to make concessionsthan they were a month ago. The optimism of theBritish Foreign Office has waned decidedly of late,and it is now a question whether any real gainswere made in the last two days of discussions.The draft formula, around which the debate is

believed to have centered, calls for a number ofsweeping arrangements, which would require theclose co-operation of Germany. As reported in aLondon dispatch of Wednesday to the New York"Times," this formula includes an endorsement byGreat Britain of the recent Franco-Italian declara-tion against unilateral disregard of the armamentsclauses of the Versailles treaty. But it also wouldreaffirm the declaration of Dec. 11 1932, in whichfive leading governments expressed a desire for prac-tical realization of the principles of equality andsecurity. The solution proposed, the dispatch states,is a statement declaring inoperative certain clausesof the Versailles treaty covering armaments, on theunderstanding that a general armaments treatymust be achieved at Geneva, with suitable guaran-tees of execution. Included in the scheme wouldbe an endeavor to obtain German adherence to suchregional pacts as the proposed Eastern Locarno ac-cord, and the general accord guaranteeing Austrianindependence. The British statesmen who are saidto have outlined this scheme doubtless have takenall factors into consideration. Many observers arepuzzled, however, by such matters as the persistentGerman declarations that the Reich must be ac-corded equality before a return to Geneva could evenbe considered. The known German views, coupledwith the growing French opposition, have tended todampen any optimism felt some weeks ago when theFrench visit to London was first announced. In thecourse of the current conferences, stabilization ofcurrencies is sure to come up, but progress in thatdirection is altogether unlikely.

German Politics and Financing

CHANCELLOR ADOLF HITLER and his numer-ous Nazi followers in Germany celebrated, onWednesday, the second anniversary of "Der Fueh-rer's" appointment as Chancellor rather morequietly than the first celebration was carried outlast year. A proclamation issued by the Chancellor-President states that the Nazi regime fulfilled inthe first half of the four-year period originally de-manded for national recovery, more than two-thirdsof what was promised. The statement was couchedin general terms and was not buttressed by anystatistics to indicate the form of the alleged improve-

ment, but democratic governments throughout theworld were challenged to show equally good results.The close control of Germany exercised by the Hit-lerites was again illustrated by publication of a law,Tuesday, which places all the German States underthe Federal power directly and re-partitions theminto 20 geographic units. This project has beenunder consideration for months, but it appears thatfinal consummation of the plan will depend upon afurther decree, now being prepared. Governors ofthe new provinces or departments will be appointedby the Chancellor, when the plan finally is madeeffective. Berlin reports state that the FederalGerman Government will proceed first with munici-pal administrative procedure before issuing the de-cree for the change to provincial administration.The Mayors of German cities, it appears, no longerwill be elected by the citizens, but also will be ap-pointed by the Nazi leaders.In the financial sphere the German authorities

now are engaged in Measures which are not a littlereminiscent of steps taken in other countries re-cently. Announcement was made in Berlin latelast week that the Government had placed withGerman savings institutions a 500,000,000-mark41/2% loan due in 28 years and priced at 98%. Ineffect, this loan merely will retire an equal amountof short-term labor-creation bills, which the bankshave been holding. The aggregate of labor-creationbills outstanding is estimated at 4,000,000,000 marks,so that further transactions of this nature are an-ticipated. The Government also plans to float a1,000,000,000-mark loan, in a public subscriptioncampaign designed to reach small investors muchin the manner Liberty bonds were floated in theUnited States, a report to the New York "Times"states. Equally significant is a decree of the Cabi-net, signed Jan. 24, which forces the holders ofapproximately 8,000,000,000 marks of gilt-edgedbonds in Germany to accept lower interest ratesthan were stipulated in the contracts. The interestrate reduction on these obligations is to be from 6%to 41/2%, and the annual saving is estimated at120,000,000 marks. This "conversion" plan is de-scribed as "voluntary," and German investors whodo not care to accept the reduction will be able tomake protests. But such an action would certainlybe regarded as unpatriotic, not to say treasonable, adispatch to the New York "Herald Tribune" remarks.The interest rate reduction is to be effected on mort-gage bonds of all types, and it is indicated that only41/2% bonds hereafter will be quoted on the BerlinBoerse, while bonds with higher rates will ceaseto be valid as collateral for loans.

Soviet Russia

A.MOST immediately after they were resumed,on Thursday, negotiations for settlement ofthe Czarist and Kerensky debts owed by Soviet Rus-sia to the United States Government and its citizenswere discontinued again at the State Departmentin Washington. Alexander A. Troyanovsky, theSoviet Ambassador to the United States, recentlyreturned from Moscow, and it was widely reportedthat progress on the debt negotiations now wouldbe probable. The Soviet official was said to haveunder contemplation recommendations to his Gov-ernment for the flotation of a bond issue in theUnited States. In some quarters this was acceptedas an intimation that the debt impasse might be

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686 Financial Chronicle Feb. 2 1935surmounted in such fashion. It appears, however,that M. Troyanovsky merely informed Secretary ofState Cordell Hull, on Thursday, that an Americanproposal made last summer for debt adjustmentsinvolving the extension of credits through the Ex-port-Import Bank was unacceptable. Mr. Hullissued a statement thereafter in which he expressedthe view that an agreement is not now possible,owing to the attitude of the Soviet Government. "Isay this regretfully," Mr. Hull added, "because I amin sympathy with the desire of American manufac-turers and agricultural producers to find a marketfor their goods in the Soviet Union, and with Amer-ican claimants whose property has been confiscated.There seems to be scarcely any reason to doubt thatthe negotiations which seemed to be promising atthe start must now be regarded as having come toan end." Not only was the United States willing toaccept a "greatly reduced sum" payable over a periodof years, but the United States indicated that itwould accept payment through the application of arate of interest beyond the ordinary rate of intereston credits extended to the Soviet Government withthe financial assistance of the United States, thestatement said. In Washington dispatches it waspointed out that the special Export-Import Bank setup to finance trade with Russia now probably willbe dissolved.

Within Soviet Russia, most of the excitementoccasioned by the assassination of a high official ofthe Communist party now seems to have died awayand ordinary concerns again are occupying thecountry. No less, than 117 persons were tried andexecuted after the assassination. Counter-revolu-tionary charges were brought against such promi-nent former leaders of the Soviet regime as GregoryZinovieff and Lev Kameneff, and these officials, to-gether with 17 others, were convicted and sentencedto long prison terms. In addition, 78 persons wereplaced in concentration camps or "exiled" to spe-cific towns where they will enjoy only a limited free-dom. But such incidents apparently received scantattention in the meetings of the All-Union Congressof Soviets, which started Monday in Moscow. In aconfident keynote speech, Premier Vyacheslaff M.Molotoff pictured the Soviet Union as a young giant,amply able to defend itself. The first five-year planwas not completely fulfilled, he said, because thecountry had to build up its defenses, but it waspointed out that production in Russia has forgedsteadily ahead throughout the depression, whereasin all other countries declines have been the rule.Gold production and foreign exchange resources ofRussia have increased six-fold in the four years sincethe last All-Union Congress was held, Premier Mob.toff said, while foreign debts had been reduced bythree-fourths of the 1931 total. "We are now in aposition to demand satisfactory terms on our foreigntrade transactions," he added. The country's de-fenses and armaments have been built up tremen-dously in recent years, but emphatic expression wasgiven the Soviet desire for peace.

Revolt in Uruguay

REVOLUTIONARY disturbances were started inUruguay last Sunday, and were made knownto the world chiefly by a Government announce-ment that a plot had been thwarted in the Provinceof Minas, 60 miles from Montevideo, the capital. Astrict censorship was imposed immediately by the

Government of the Dictator-President, GabrielTerra, and the real course of the rebellion and theGovernment's efforts to subdue it are not entirelyclear. Reports from Montevideo state that the18,000 regular troops at the command of the Federalregime were called out last Monday to combatsporadic groups of agitators and revolutionists. TheCongress immediately voted the President power toarrest all leaders of the opposition, and under thisauthority Domingo Baque, head of the oppositionNationalist party, was taken into custody on Tues-day. But the revolt really is led by Basilio Munoz,and that 80-year-old military and political figureremains at large. Occasional encounters were re-ported in various parts of the country, and the Gov-ernment announcements said the loyal troops weresystematically squelching the rebel bands. But theindependent and possibly more reliable reports fromBuenos Aires said that the revolt has reached wide-spread proportions, with a number of major politi-cal groups arrayed against President Gabriel Terra.The rebels are said to plan guerrilla warfare untilthey can concentrate their forces and count uponsufficient popular support to force the resignationof President Terra. The latter, however, always hasdemonstrated great resourcefulness in his long po-litical career, and there are no reports of widespreaddisaffection in regular army units. Few revolutionsin Latin America succeed without the aid of thearmy.

Discount Rates of Foreign CentraljBanksTHERE have been no changes during the week in1 the discount rate of any ofithe foreign centralbanks. Present rates at the leading/centers are shownin the table which follows:

DISCOUNT RATES OF FOREIGN CENTRAL BANKS

CountryRate InErnaFeb. 1

DateEstablished

Pre-NowRate

CountryRate tnEffeetFeb. 1

DateEstablished

pro-stowRate

Austria__ 444 June 27 1934 5 Hungary _- 434 Oct. 17 1932 5Belgium__ . 234 Aug. 28 1934 3 India 334 Feb. 16 1934 4Bulgaria___ 7 Jan. 3 1934 8 Ireland. 3 June 30 1932 344Chile 441 Aug. 23 1932 534 Italy 4 Nov. 26 1934 3Colombia._ 4 July 18 1933 5 Japan 3.65 July 3 1933 3Czechoslo- Java 344 Oct. 31 1934 4vakia___ 334 Jan. 25 1933 434 Jugoslavia _ 5 Jan. 18 1935 634

Danzig. _ _. 4 Sept. 21 1934 3 Lithuania 6 Jan. 2 1934 7Denmark__ 244 Nov. 29 1933 3 Norway 334 May 23 1933 4England..__ 2 June 30 1932 244 Poland 5 Oct. 25 1933 6Estonia__ 5 Sept. 25 1934 534 Portugal 5 Dec. 13 1934 5%Finland__ 4 Dec. 4 1934 444 Rumania 434 Dec. 7 1934 6France_ _ __ 214 May 31 1934 3 SouthAtrica 4 Feb. 21 1933 5Germany__ 4 Sept. 30 1932 5 Spain 6 Oct. 22 1932 634Greece ____ 7 Oct. 13 1933 744 Sweden 234 Dec. 1 1933 3Holland ___ 244 Sent 18 1933 3 Switzerland 2 Jan 22 1021 2t4

Foreign Money RatesI N LONDON open market discounts:for short billson Friday were 5-16@/%, as against 5-16@9%

on Friday of last week, and %% for three-months'bills as against 5-16@%% on Friday of last week.Money on call in London yesterday was Yi,%. AtParis the open market rate was raised on Jan. 25from M% to 174%, while in Switzerland the rateremains at 13/2%.

Bank of England Statement

THE statement of the Bank for the week endedJan. 30 shows a further gain of 64,135 in goldholdings, raising the total to another record high,193,059,591; a year ago holdings aggregated 191,-795,851. As the gain in gold was attended by anexpansion of 1,117,000 in circulation, reserves fulloff 1,053,000. Public deposits rose 3,980,000 andother deposits decreased 3,530,388. The latterconsists of bankers' accounts which declined 9,282,-480 and other accounts which increased 5,722,092.The reserve ratio dropped slightly to 48.21% from

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Volume ldn Financial Chronicle 68749.00% a week ago; last year the ratio was 52.05%.Loans on Government securities increased 1,400,000and those on other securities 129,042. The latterconsists of discounts and advances which rose L169,-116 and securities which fell off 40,074. No changewas made in the 2% discount rate. Below are thefigures with comparisons for five years:

BANK OF ENGLAND'S COMPARATIVE STATEMENT

Jan. 301935

Jan. 311934

Feb. 11933

Feb. 31932

Feb. 41931

Circulation 374.941,000 366,661,673 357,309,815 347,665,986 349.486.432Public deposits 20,949,000 25,154.293 42,245,113 4.801,980 9,860,978Other deposits 141.057,928 138,400,553 102,940,514 110,171,181 96,143,687Bankers' accounts_ 98,955,896 100,593,585 67,761,988 77,325,791 62.575,654Other accounts_ 42,102,032 37,806,968 35,178,526 32,845,390 33,568,033

Govt. securities 82.522,413 77,057,869 89,378,138 40,700,906 43,029.952Other securities 19,517,947 19,496,406 29,133,769 53,754,626 29,528,490Diset. & advances_ 9.290,627 8,178,324 11,943,009 13,634,499 6,324.544Securities 10,227,320 11,318,082 17,190,761 40,120,127 23,203,946

Reserve notes & coin 78,118,000 85,134,178 44,811,714 48,646,690 51,553,829Coln and bullion 193,059,591 191,795,851 127,121,529 121,312,676 141,040,261Proportion of reserve

to liabilities 48.21% 52.05% 30.86% 38.92% 48.63%Bank rate 2% 2% 2% 6% 3%

Bank of France Statement

THE weekly statement of the Bank of Francedated Jan. 25 shows an increase in gold holdingsof 76,575,879 francs. The Bank's gold now aggre-gates 82,014,004,268 francs, in comparison with77,054,987,969 francs a year ago and 82,167,288,654francs two years ago. French commercial bills dis-counted and creditor current accounts record increasesof 577,000,000 francs and 717,000,000 francs, whileadvances against securities dropped 53,000,000 francs.Notes in circulation reveal a contraction of 373,-000,000 francs, bringing the total of the item downto 81,685,848,680 francs. Circulation last year was79,474,159,335 francs and the previous year 83,-313,717,365 francs. The proportion of gold on handto sight liabilities stands now at 80.48%, comparedwith 78.97% the corresponding period a year ago and77.47% the year before. Below we furnish a com-parison of the different items for three years:

BANK OF FRANCE'S COMPARATIVE STATEMENT

Changesfor Week Jan. 25 1935 Jan. 26 1934 Jan. 27 1933

Francs Francs Francs FrancsGold holdings +76.575,879 82,014,004.268 77,054,987,969 82,167,288,654Credit ha's. abroad_a French commercial

bills discounted

No change

+577.000,000

10,572,277

4,004,147,914

16,214,172

4,486,390,891

2,939,676,490

3,141,662,316b Bills bought abr'd No change 952,196,012 1,113,533,609 1,494,242,056Adv. against secure_

53,000,000 3,148,365,966 2,893,141,296 2,536,550,151Note circulation_ 373,000,00081,685.848,680 79,474,159,335 83,313,717,365Credit current accts. +717,000,000 20,224,379.768 18,106,263,297 22,743,063,435Proport'n of gold onhand to sight Bab_

0.19% 80.48'i 78.97% 77.47%a Includes bills purchased in France. b Includes bills discounted abroad.

New York Money Market

BUSINESS in the New York money market was ofa routine nature and on a very modest scale thisweek. The pressure of idle funds continued toincrease, but demand remained lilliputian in com-parison. The United States Treasury sold on Mon-day a further issue of $75,000,000 discount bills,due in 182 days, and the average rate on awardswas 0.14%, computed on an annual bank discountbasis. Call loans held to 1% on the New YorkStock Exchange, while counter trades were reportedevery day at 34%. Time loans were again 34@1%for all transactions and maturities. Commercialpaper and bankers' bill rates likewise were con-tinued.

New York Money Rates

DEALING in detail with call loan rates on theStock Exchange from day to day, 1% remainedthe ruling quotation all through the week for bothnew loans and renewals. The market for time moneyhas shown no activity this week. Few inquiries andno transactions have been reported. Rates are

nominal at %@1% for two to five months and 1@,131.% for six months. The market for prime com-mercial paper has been active all through the presentweek. There has been a goodly supply of paperavailable and the transactions have shown someimprovement over the previous week. Rates areYi% for extra choice names running from four tosix months and 1% for names less known.

Bankers' AcceptancesTRANSACTIONS in prime bankers' acceptances

have been extremely dull this week. Very few bills have been available and little interest has beenmanifest. Rates are unchanged. Quotations of theAmerican Acceptance Council for bills up to andincluding 90 days are 3-16% bid and IA% asked;for four months, 5-16% bid and Yl.% asked; for fiveand six months, 14% bid and /% asked. The billbuying rate of the New York Reserve Bank is M%for bills running from 1 to 90 days and proportion-ately higher for longer maturities. The FederalReserve banks' holdings of acceptances decreasedfrom $5,539,000 to $5,538,000. Their holdings ofacceptances for foreign correspondents remain un-changed at $317,000. Open market rates for ac-ceptances are nominal in so far as the dealers areconcerned, as they continue to fix their own rates.The nominal rates for open market acceptances areas follows:

SPOT DELIVERY180 Day, 150 D(418--.. 120 DaVS

BM Asked Bid Asked Bid AskedPrime eligible bills 34

90 Days --Go Dayi -30 DaysBid Asked Bid Asked Bid Asked

Prime eligible bills tie

FOR DELIVERY WITHIN THIRTY DAYSEligible member banks 54% bidEligible non-member banks 34% 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 BANKS

Federal Reserve BankRate inEffect onFeb. 1

DateEstablished

Putters*Rats

Boston New York Philadelphia Cleveland Richmond Atlanta Chicago Bt. Louis Minneapolis Kansas City Dallas Ban Francisco

2194

22142

22542342342

Feb. 8 1934Feb. 2 1934Jan. 17 1935Feb. 3 1934Jan. 11 1935Jan. 14 1935Jan. 19 1935Jan. 3 1935Jan. 8 1935Dee. 21 1934Jan. 8 1935Feb. 16 1934

2 42294254

2342%234

3a254

Course of Sterling Exchange

STERLING exchange continues steady and ex-tremely dull. Fluctuations were within a nar-rower range than last week. Sterling is also firmerin terms of French francs. The range this week hasbeen between $4.8534 and $4.87 for bankers' sightbills, compared with a range of between $4.87 and164.893/8 last week. The range for cable transfers hasbeen between .853/i and $4.85%, compared witha range of between $4.873A and $4.8934 a week ago.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 PARIS

Saturday, Jan, 26 Monday, Jan. 28 Tuesday, Jan. 29

74.625 I Wednesday, Jan. 30 74.675 I Thursday, Jan. 31 74.436 I Friday, Feb. 1

74.32274.32774.228

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688 FinancialLONDON OPEN MARKET GOLD PRICE

Saturday, Jan. 26 141s. Od. Wednesday, Jan. 30 _ _142s. Id.Monday, Jan. 28 141s. 6d. Thursday, Jan. 31 __I42s. Id.Tuesday, Jan. 29 141s. 834d. I Friday, Feb. 1 __142s. 4d.PRICE PAID FOR GOLD BY UNITED STATES (FEDERAL

RESERVE BANK)Saturday, Jan. 26 35.00 I Wednesday, Jan. 30 35.00Monday, Jan. 28 35.00 I Thursday, Jan. 31 35.00Tuesday, Jan. 29 35.00 Friday, Feb. 1 35.00

The foreign exchange market has been nervous anderratic since Jan. 15 owing to widespread anxiety asto the outcome of the gold clause litigation now beforethe Supreme Court. Sterling is less affected by thisuncertainty than are the European gold bloc units.The gyrations of the Continental currencies with re-spect to the dollar hold the center of interest. Bothsterling and dollar futures have been at substantialpremiums with respect to French francs and the otherContinentals for some weeks. There has been a tre-mendous demand for dollars on the other side anddollar shorts in Paris have been making every effortto cover their position since Jan. 15, as the foreignexchange market was beset with uncertainties as toour monetary policies. The demand for dollars isreflected in the heavy gold shipments from Europe.A large percentage of the Continental demand for goldis supplied by London. It is believed that dollarshorts are still far from having covered and ship-ments of gold to the United States may continue forsome time. According to well posted bankers theAmerican stabilization fund was active in the marketon several occasions this week for the purpose ofstabilizing the dollar which threatened to rise ex-cessively in terms not only of the European gold blocunits but of sterling as well. Banks acting for theUnited States Treasury Department seem to haveconfined their operations largely to London and aconsiderable part of the gold taken there for "un-known destination" is now believed to have been forofficial American account. Though the current quo-tations for the various exchanges with the exceptionof sterling show wide fluctuations, the volume oftransactions has been at no time noticeably large.In fact, on many days during the past few weeks whenthe quotable rate gave clear indication of a nervousmarket, real trading was almost at a standstill.The firmness in the dollar is not due entirely to

short covering, by any means, but is attributablelargely to the repatriation of American funds inLondon and to the stimulated gold movement to thisside induced by eagerness to sell the metal to theAmerican authorities before the Supreme Courtshould render its decision on the gold clauses. Sofar as London is concerned, the hectic swings inexchange and the rise in the dollar during the lastfew weeks seem to create no interest whatsoever.London is quite indifferent to the gold shipments,as they come from private hoards. Gold importsinto Great Britain in 1934, it was pointed out, ex-ceeded exports by 134,000,000. Foreign bankscontrol a large quantity of this gold. Hoarding con-tinues on an extensive scale, but much of the goldhas been bought as a speculation because of theprevalence of the view that whatever happenseventually regarding international stabilization ofcurrency, gold is more likely to rise than to fall.There can be no prospect of any semblance of anorderly foreign exchange market until some days afterthe decision of the Supreme Court is rendered.

All current advices from London indicate a com-plete indifference on the part of the London bankingfraternity as to the stabilization question. It is

Chronicle Feb. 2 1935quite generally agreed there that a return to goldand stabilization of the currencies would be most de-sirable, but the London bankers feel that the condi-tions necessary to the successful operation of the goldstandard will not be created in the near future. Thesevere limitations which have been placed upon inter-national trade in the past year or more are reflectedin the difficult position of the London discount mar-ket. Under normal conditions of exchange such asexisted before the war, the discount market wasenabled to function profitably because of the vastamount of bills drawn upon London. In addition,the discount market dealt heavily in Treasury bills.The small volume of commercial bills and the Gov-ernment's policy of steadily reducing its issues of shortbills has forced discount rates to an almost nominaland wholly unremunerative level, the current rate forthree-months' Government bills being less than %%.This policy is forcing still more idle money into themarket and accentuating the depression of rates.The London discount market is being driven intoother channels of activity to meet overhead expenses.The declining trend in interest rates in LombardStreet may be judged from a consideration of thedrop in day-to-day money, call money against bills.This is now 0.25%. Last October it was 0.50% to0.75%. In January 1934 its average was 0.86%.Two-months' bills are currently quoted 5-16% to %%,.three-months' bills /%, four-months' bills /% to7-16% and six-months' bills 7-16% to %. All thegold available in the London open market this weekwas taken for unknown destination, largely by privatehoarders, and some doubtless for American account.On Saturday last there was available and so taken232,000; on Monday, 530,000; on Tuesday,545,000; on Wednesday, 284,000; on Thursday,884,000, and on Friday, 133,000. The Bank ofEngland statement for the week ended Jan. 30 showsan increase in gold holdings of 64,135. Total goldholdings now stand at 193,059,591 (largest in theBank's history), which compares with 191,795,851a year ago and with the minimum 150,000,000recommended by the Cunliffe Committee.At the Port of New York the gold movement for

the week ended Jan. 30, as reported by the FederalReserve Bank of New York, consisted of imports of$72,464,000, of which $37,507,000 came from Eng-land, $12,308,000 from France, $11,351,000 fromHolland, $3,932,000 from Mexico, $3,514,000 fromIndia, $2,102,000 from Colombia, $1,677,000 fromCanada and $73,000 from Panama. There were nogold exports. The Reserve Bank reported a decreaseof $867,000 in gold earmarked for foreign account.In tabular form the gold movement at the Port ofNew York for the week ended Jan. 30, as reported bythe Federal Reserve Bank of New York, was asfollows:GOLD MOVEMENT AT NEW YORK, JAN. 24JAN. 30, INCLUSIVE

Imports Exports$37,507,000 from England12,308,000 from France11,351,000 from Holland3,932,000 from Mexico None3,514,000 from India2,102,000 from Colombia1,677,000 from Canada

73,000 from Panama

$72,464,000 totalNet Change in Gold Earmarked for Foreign Account

Decrease: $867,000NoteWe have been notified that approximately $166,000 of gold was

received from China at San Francisco.

The above figures are for the week ended Wednes-day evening. On Thursday $1,819,000 of gold was

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Volume 140 Financial Chronicle 689received of which $1,675,200 came from Canada,$131,300 from India and $12,500 from Jamaica.There were no exports of the metal or change ingold held earmarked for foreign account. On Fridaythere were no imports or exports of the metal orchange in gold held earmarked for foreign account.Canadian exchange following the trend of sterling

has receded from the high levels which have prevailedfor the last two years. On Saturday last Montrealfunds were at a discounfof 1-32% to 7-32%, on Mon-day at a discount of 1-16%, on Tuesday at a dis-count of 1-16% to par, on Wednesday at a discountof 1-16%, on Thursday at a discount of 1-16% toM%, and on Friday at a discount of 1-16% to par.

Referring to day-to-day rates, sterling exchange onSaturday last was dull and easy. Bankers' sight was$4.85%@$4.863/2, cable transfers $4.86(04.86/.On Monday sterling was dull with an easier under-tone. The range was $4.853@$4.86A for bankers'sight bills and $4.85%@$4.86% for cable transfers.On Tuesday the pound was firmer. Bankers' sightwas $4.873/8(04.873/2, cable transfers $4.873jQ$4.87/. On Wednesday exchange was steady. Therange was $4.86%@$4.873/ for bankers' sight and$4.87@$4.87% for cable transfers. On Thursdayexchange on London was steady. The range was$4.86%@$4.873 for bankers' sight and $4.87@$4.8734 for cable transfers. On Friday sterling wassteady, the range was $4.863/8@$4.871/8 for bankers'sight and $4.87@$4.873 for cable transfers. Closingquotations on Friday were $4.8674 for demand and$4.873/g for cable transfers. Commercial sight billsfinished at $4.86%; 60-day bills at $4.863; 90-daybills at $4.85%; documents for payment (60 days)at $4.8614, and seven-day grain bills at $4.863%.Cotton and grain for payment closed at $4.86%.Continental and Other Foreign Exchange

THE French franc and the European gold bloccurrencies are all exceptionally weak in termsof the United States dollar, a condition particularlyapparent since Jan. 15, and there has been heavybuying of dollars in Paris. The factors affecting theFrench franc have already been discussed in theresume of sterling. The franc is not nearly as weakas the dollar-franc-sterling quotations would indicate.At present the apparent weakness is due largely tothe endeavors of European gold holders to send goldto this side before the Supreme Court renders itsdecision on the gold clause and to anticipate anyowering in the price of gold by the United StatesTreasury.There is no flight from the franc. On the con-

trary, the French position has steadily improved sincethe Flandin Government took office. While ship-ments of gold for French account to the UnitedStates have recently been heavy, these shipmentsare offset by gold sent to France from Switzerland,Italy and Belgium, as the French franc is firmer interms of the Continental currencies. It is well-known that M. Flandin and Foreign Minister Lavalwhile in London this week will discuss stabilizationwith the British authorities, but there is no expecta-tion that the French point of view will be shared inLondon. The 1934 report of the Bank of Franceshows no outstanding change in policies and reiteratesits condemnation of theories of managed currenciesand its determination to adhere to the gold standard.It also recommends de facto stabilization of theAmerican dollar and suggests that the British pound

be stabilized on the same basis. As noted above,the market sees very little prospect that Frenchstabilization ideas will prove acceptable to GreatBritain in the immediate future. As noted above,the Federal Reserve Bank of New York reports thereceipt of $12,308,000 of gold from France. Therecan be no doubt that the heavy gold shipments fromLondon to New York in the past few weeks was alsoin large part for French and other Continental ac-count. The Bank of France statement for the weekended Jan. 25 shows an increase in gold holdings of76,575,879 francs. Total gold holdings now standat 82,014,004,268 francs, which compares with 77,-054,987,969 francs a year ago, and with 28,935,-000,000 francs when the unit was stabilized in June1928. The bank's ratio stands at the high figure of80.48%, compared with 78.97% a year ago, andwith legal requirement of 35%. All Continentalcurrencies are inclined to move in sympathy withthe French franc.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 23.54Italy (lira) 5.26 8.91Switzerland (franc) 19.30 32.67Holland (guilder) 40.20 88.06

RangeThis Week

6.49% to 6.5723.01 to 23.258.42 to 8.48331.87 to 32.2366.70 to 67.34

The London check rate on Paris closed on Fridayat 74.27, against 74.54 on Friday of last week. InNew York sight bills on the French center finishedon Friday at 6.56, against 6.533 on Friday of lastweek; cable transfers at 6.563., against 6.533/b andcommercial sight bills at 6.54, against 6.513.Antwerp belgas closed at 23.22 for bankers' sightbills and at 23.23 for cable transfers, against 23.13and 23.14. Final quotations for Berlin marks were39.98 for bankers' sight bills and 39.99 for cabletransfers, in comparison with 39.81 and 39.82.Italian lire closed at 8.46 for bankers' sight bills andat 8.47 for cable transfers, against 8.45 and 8.46.Austrian schillings closed at 18.76, against 18.70;exchange on Czechoslovakia at 4.16, against 4.143%;on Bucharest at 1.003/2, against 1.00; on Poland at18.81, against 18.723/ and on Finland at 2

.163/2,against 2.16. Greek exchange closed at 0.92% forbankers' sight bills and at 0.93 for cable transfers,against 0.92% and 0.93.

EXCHANGE on the countries neutral during thewar is extremely easy in sympathetic relationwith the French franc. This applies particularly tothe Swiss franc and the Holland guilder. The Scan-dinavian currencies move, of course, on strict rela-tion with sterling exchange, as the Baltic States areimportant members of the sterling bloc. The marketawaits with interest the nation-wide Swiss referen-dum on the question of revision of the monetarypolicies. At the present juncture it would seem al-most impossible for the conservative elements toprevail in the plebiscite and that Switzerland willadhere to the present valuation of the franc, becauseof the fact that the plebiscite petition was signed bymore than one-third of all the voters who could beexpected to participate in a referendum. As notedabove, the Federal Reserve Bank of New York re-ports the receipt of $11,351,000 in gold from Holland.These gold shipments do not represent any flight ofcapital from Holland but merely reflect the specula-tive operations of Dutch holders of gold. The cur-

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690 Fi