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Volume 136

1 Theon1iiirrct31 1 firiantialtirontrivNew York, Saturday, March 18 1933. Number 3534

The Financial SituationWONDERFUL progress has been made the pastweek in a return to normal banking andeconomic conditions, after the complete breakdownof the previous two or three weeks. As a result,there has been a complete transformation in theoutlook. Where previously there was doubt anddespair, and where the future was viewed with adegree of anxiety bordering on alarm, there is nowhopefulness amounting almost to enthusiasm, whileconfidence has replaced doubt and apprehension.The transformation is so complete that it is almostunbelievable that it could have occurred in such abrief period of time.The change must be ascribed almost entirely to

the vim and vigor with which President Roosevelthas taken hold and undertaken to restore order outof what amounted to almost absolute chaos. Every-thing has proceeded with almost incredible speed.Confronted with a banking situation and general un-settlement, when he entered office two weeks ago onMarch 4, such as has never before fallen to the lot ofany Chief Executive, Mr. Roosevelt in the shortperiod of two weeks has accomplished what previ-ously would have been deemed impossible, and to-daythe confidence previously so sadly lacking has oncemore settled over the entire community, with a firmbelief that the country is at last nearing the end ofthe long

-continued period of troubles. Magic couldhave done no more.This marvellous achievement has been accom-

plished by convening the new Congress in extra ses-sion and getting it to enact in quick order the legis-lation intended to provide the remedies deemedessential at this critical period of a grave emergency.Helpful to that end also has been Mr. Roosevelt'spolicy of taking the entire population into his con-fidence and explaining with great frankness hispurpose in the various exceptional measures whichhe has asked.His radio address of last Sunday, delivered at

10 o'clock at night, was one of the finest utterancesever delivered by any President of the United States,and worthy to rank with the immortal address ofAbraham Lincoln at Gettysburg. It was simple.It was convincing. Moreover, it was an appealwhich met with immediate response in securing forthe Chief Executive the confidence of the entirepopulation, enabling him to increase his pressureupon Congress for complying with his demandswithout hesitation and without delay. It was anation-wide broadcast, and one also that extended

- to some of the capitals of Europe. No mortal manever had a larger audience. No address was ever

so anxiously awaited; previous announcement hav-ing been made that the President, in a radio address,meant to explain the situation, as he viewed it, tothe entire community in order that they might un-derstand what he contemplated.And the results have come in quick order. Last

week Congress gave him the Emergency BankingBill. The present week it has given him, in quicksuccession, the Economy Bill, by which he means tosave over $500,000,000 a year through radicalcuts in the compensation of veterans and by reduc-ing the pay of Federal employees. The beer bill, bywhich the manufacture and sale of beer and of wineof a low alcoholic content is authorized, this lastmeasure having come in response to an entirelyunexpected message which he sent to Congress onMonday night, is also being rapidly advanced topassage; besides which, he addressed still anotherspecial message to Congress on Thursday asking forfarm relief legislation and submitting a bill for thatpurpose which Congress will undoubtedly speed toimmediate passage. An emergency unemploymentbill is also to come to-day, thus completing thescheme of legislation which the President deemsessential before letting Congress adjourn for afew weeks, then to reassemble for such additionallegislation which the President and his advisersmay prepare in the interval of Congressionalrespite.In the meantime the banks have reopened all over

the country in accordance with carefully pre-arranged plans. The stock and produce exchangeshave also reopened all over the land, and by theirfluctuations have given palpable evidence of thegreat change for the better which has been effected.In his address of last Sunday night the Presidentdetailed the scheme by which it had been arrangedto open the banks, and this scheme has been carriedout to the letter. That address which, as alreadystated, was in the nature of a plain talk with thewhole country as his audience, was effective in moreways than one. It was delivered in a sonorous voice,which itself was captivating, and was expressed insimple languageso simple that the ordinary indi-vidual could grasp its significanceand the style,moreover, was so unaffected as to establish implicitconfidence in his leadership, even though one mightnot be in entire accord with the measures chosen toattain the end sought. Mr-Roosevelt explained howthe epidemic of bank failures had come about, andhow he was proceeding to restore normal conditions.First of all he directed attention to "the simple factthat when you deposit money in a bank, the bank

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

1756 Financial Chronicle March 18 1933does not put the money into a safe deposit vault.It invests your money in many different forms ofcreditin bonds, commercial paper, mortgages, andmany other kinds of loans. In other words, the bankputs your money to work to keep the wheels ofindustry and of agriculture turning around. A com-paratively small part of the money you put into thebank is kept in currencyan amount which in nor-mal times is wholly sufficient to cover the cashneeds of the average citizen. In other words, thetotal amount of all the currency in the country isonly a comparatively small fraction of the total de-posits in all of the banks."He then asked the question, "What, then, hap-

pened during the last few day's of February and thethe first few days of March ?" And he answered thatquestion by saying: "Because of undermined con-fidence on the part of the public, there was a generalrush by a large portion of our population to turnbank deposits into currency or golda rush so greatthat the soundest banks could not get enough cur-rency to meet the demand. The reason for this wasthat on the spur of the moment it was of course im-possible to sell perfectly sound assets of a bank andconvert them into cash except at panic prices farbelow their real value."It was that situation that caused the President

to issue his proclamation providing for the nation-wide bank holiday, and this was the first step in theGovernment's reconstruction of the country's finan-cial and economic fabric. "The second step was thelegislation promptly and patriotically passed byCongress confirming my proclamation and broaden-ing my powers so that it became possible in viewof the requirement of time to extend the holidayand lift the ban of that holiday gradually. Thislaw," he added, "also gave authority to develop aprogram of rehabilitation of our banking facilities."The third stage was the series of regulations per-mitting the banks to continue their functions totake care of the distribution of food and householdnecessities and the meeting of payrolls. "The newlaw allows the 12 FecleraI Reserve banks to issueadditional currency on good assets, and thus thebanks that reopen will be able to meet every legiti-mate call. The new currency is being sent out bythe Bureau of Engraving and Printing in large vol-ume to every part of the country. It is sound cur-rency because it is backed by actual good assets."The President then outlined his plans for the

gradual reopening of the banks, but premised this byasking the question why all the banks could not bereopened simultaneously. "The answer is simple.Your Government does not intend that the historyof the past few years shall be repeated. We do notwant and will not have another epidemic of bankfailures." He then proceeded as follows:"As a result, we start to-morrow, Monday, with

the opening of banks in the 12 Federal Reserve Bankcitiesthose banks which on first examination bythe Treasury have already been found to be all right.This will be followed on Tuesday by the resumptionof all their functions by banks already found to besound in cities where there are recognized clearinghouses. That means about 250 cities of the UnitedStates."On Wednesday and succeeding days banks in

smaller places all through the country will resumebusiness, subject, of course, to the Government'sphysical ability to complete its survey. It is neces-sary that the reopening of the banks be extended over

a period in order to permit the banks to make appli-cations for necessary loans, to obtain currencyneeded to meet their requirements, and to enable theGovernment to make common-sense check-ups."The scheme as thus detailed was carried out with-

out variation, and worked to perfection. No hitchoccurred anywhere, and in this city the only bankof consequence which was not allowed to resume wasthe Harriman National Bank & Trust Co., for whicha conservator was appointed in accordance with theprovisions of the Emergency Banking Act. Promptand general improvement was the immediate result.The foreign exchanges, in which dealings were per-mitted on Monday, responded by all turning stronglyin favor of New York. United States securities, inwhich dealings over the counter were also permittedon Monday likewise responded with a sharp appre-ciation in their market values.The Stock Exchanges were not reopened until

Wednesday, and the Produce and Cotton Exchangesnot until Thursday, and in all cases the dealingsfurnished further testimony to the complete restora-tion of confidence. Stock Exchange prices openedat a sharp advance as compared with the closingprices on Friday, March 3, and continued their up-ward splurge on that and the succeeding day, thoughwith some reaction on Friday. On the ChicagoBoard of Trade, with the opening on Thursday, theprice of wheat bounded up a full 5c. a bushel, thelimit for a day's fluctuation, and the officials ofthe Board of Trade took prompt measures to repealthis limitation. On the New York Cotton Exchange,future options on Thursday advanced all the wayfrom $2.50 to $3.50 a bale, though receding somewhatat the close, while the spot price on the New YorkCotton Exchange was 6.85c. as against 6.35c. onMarch 3, and with the spot prices yesterday 6.55c.The significance of this rise on the Stock and

Produce Exchanges should not be lost sight of. Itdifferentiates the present from all major financialcrises in the past. On these former occasions liqui-dation was merely in its early stages, and, accord-ingly, a long period of declining prices was ahead.On the present occasion, after nearly four years ofcontinued decline, liquidation may be said to havebeen thoroughly completed. Accordingly, the coun-try now starts on a safe and sound basis of values,and recovery rather than further depreciation wouldseem to be in prospect. This point should not beoverlooked, for clearly it constitutes one of thebrightest and most encouraging features in thesituation.The President's message Monday night regarding

legislation for the modification of the Volstead Actin order to legalize the manufacture and sale ofbeer and other beverages of such alcoholic content asis permissible under the Federal Constitution, with-out repeal of the Federal Prohibition Amendment,was exceedingly brief. It merely asked Congress "toprovide through such manufacture and sale, by sub-stantial taxes, a proper and much needed revenuefor the Government." To this the President simplyadded that he deemed such action at this time to beof the highest importance. And Congress has re-sponded by promptly passing Acts intended to pro-vide legislation; though some friction between theHouse and the Senate as to the exact percentage ofalcohol to be permitted has delayed the completionof this piece of legislation. The beer law will con-stitute another important step in the balancing of


Volume 136 Financial Chronicle 1757the Federal budget, which is such a prime essentialand which the President and his Administration areso anxious to bring about. But it will mean morethan that. It is certain also to relieve the unem-ployment problem, to some extent, at least.One little item of news, indicative of how this

benefit is to be brought about, came in a UnitedPress dispatch from Los Angeles, on Thursday,which said that the Los Angeles Brewing Co. hadordered 21,600,000 beer bottles from the local plantsof the Owens-Illinois Glass Co. It was added thatthe order would keep the two glass factories operat-ing at capacity for 125 days, and that plans had beencompleted for an additional glass furnace, and toadd 100 men to the payroll. It is worth noting, too,as showing how general is the support of PresidentRoosevelt in his economy plans, that AssociatedPress advices from Washington on Thursday saidthat a new White House record had been estab-lished? What was this record? It was that withonly 12 days in office President Roosevelt had re-ceived 14,000 telegrams praising his actions. Stillanother record was referred to, namely, that 1,500telegrams had supported the veterans' and Federalpay cut economy, while only 39 telegrams had beenreceived expressing disapproval.Another favorable development of the week has

been the success attending the United States Treas-ury Department's March financing, which was some-what urgent, and concerning which some uneasinesshad been felt because of the prevailing bank troubleand the short time remaining before the financinghad to be completed, inasmuch as the maturities tobe taken care of had to be met on Wednesday,March 15. The financing consisted of the offeringof $800,000,000 of Treasury certificates of indebted-ness running, respectively, for 5 and 9 months andbearing 4 and 41/4% interest, respectively. Last De-cember the Treasury placed some certificates of in-debtedness running 12 months at the extraordi-narily low interest rate of 3/4 of 1% per annum, but,of course, a much higher rate on the present occasionwas a foregone conclusion. The important pointis that the new offering was so readily taken up.The subscription books were closed at the close ofbusiness on the day of the offering, that is, on Mon-day, and Secretary Woodin reported that the sub-scriptions altogether had aggregated no less than$1,820,000,000. The Secretary has now followed thisup by offering $100,000,000 of 91-day Treasury billsfor sale on a discount basis, tenders for which willbe received on the coming Monday.

THE Federal Reserve statements this week alsofurnish indications of the great change for thebetter which has been effected in the general bank-ing and financial situation. We discuss the returnsin a separate item further below in this article, andwish to note here only the great improvement whichhas been effected in the general condition of theFederal Reserve System. For one thing, there hasbeen an increase in the gold holdings of no less than$327,238,000 for the week ending Wednesday night,raising the total of these gold reserves from $2,683,-539,000 March 8 to $3,010,777,000 March 15. Mem-ber banks have likewise improved their position, asis evident from the fact that their Reserve depositswith the Federal Reserve banks increased duringthe week from $1,776,221,000 to $1,967,229,000.Moreover, this has been accomplished in the face of

reduced borrowings at the Federal Reserve banks,the discount holdings of the 12 Reserve institutionsbeing reported at $1,232,316,000 the present week asagainst $1,413,936,000 last week. By means, too, ofthe increase in their gold holdings, the ratio of re-serves to deposit and Federal Reserve note liabilitieshas been raised from 45.6% to 49.1%.

DIVIDEND reductions and omissions by corpo-rations have again been quite numerous. TheGeneral Gas & Electric Co. omitted declaration ofthe April 1 quarterly dividend on the various issuesof preferred stock. The Utah Power & Light Co.passed the quarterly dividend due April 1 on the $7cumul. and the $6 cumul. pref. stocks. The Cana-dian Pacific Railway at an adjourned meeting tookno action in respect to either the preferred or com-mon shares. Dividends on the common shares ofthe company were suspended in 1932. The RochesterCentral Power Corp. omitted the quarterly dividendof 11/2% due April 1 on the 6% cumul. pref. stock.The Standard Gas & Electric Co. omitted the quar-terly dividend on the common shares. The StandardPower & Light Co. omitted the quarterly dividendordinarily payable about June 1 on the commonstock and the common stock series B. The ElectricAuto-Lite Co. decided to defer action until June onthe quarterly dividend ordinarily payable aboutApril 1 on the common stock. The Standard Oil Co.of Ohio omitted the quarterly dividend ordinarilypayable about April 1 on the common shares. TheMagma Copper Co. suspended payment of the quar-terly dividend due about April 15 on its capitalstock. The Cleveland Electric Illuminating Co. re-duced the quarterly dividend on common from 40c. ashare to 30c. a share. The Philadelphia Co. reducedthe quarterly dividend on common from 35c. a shareto 25c. a share. The Otis Elevator Co. cut its quar-terly dividend on common from 25c. a share to 15c. ashare, after numerous previous reductions. TheMidland Steel Products Co. reduced its quarterlydividend on the 8% cumul. pref. stock from 2% to1%. The Pittsburgh Plate Class Co. reduced thequarterly dividend on common from 25c. a share to15c. a share. The Ward Baking Co. cut the quar-terly dividend on the 7% cumul. pref. stock from 50c.a share to 25c. a share, and the Singer Manufactur-ing Co. reduced the quarterly dividend on commonfrom 2% to 11/2%.

THE distinctive feature of the returns of the Fed-eral Reserve banks is the improvement allaround which they disclose and to which partial ref-erence has already been made above. The 12 Re-serve institutions have enlarged their gold holdingsin amount of $327,238,000, increasing thereby thetotal of gold reserves from $2,683,539,000 to $3,010,-777,000. At the same time there has been a reduc-tion in the amount of Reserve credit outstanding (asmeasured by the bill and security holdings) of$177,540,000, while simultaneously the volume ofFederal Reserve notes in actual circulation has in-creased in amount of $77,696,000, indicating thatthe gold acquisitions have been obtained largely bythe issuance of new Federal Reserve notes. Thisconclusion is further strengthened by the fact thatwhile the total of Reserve notes in circulation hasbeen enlarged in amount of $77,696,000, the totalmoney in circulation actually shows a contractionin amount of $269,000,000. Collateral evidence Is


1758 Financial Chronicle March 18 1933that the deposit liabilities have risen from $1,951,-222,000 to $2,123,739,000, and that this increase islargely accounted for by a large addition to theamount of member bank reserves, which have risenduring the week from $1,776,221,000 to $1,967,-229,000. The significance of that result lies in thecircumstance that it shows that the member bankshave been able very largely to improve their reserveaccount. This view finds further confirmation in areduction in member bank borrowing as reflected bya decrease in the discount holdings of the 12 Reserveinstitutions during the week from $1,413,936,000 to$1,232,316,000. *The holdings of acceptances showno great change for the week, the amount of thesebeing reported at $403,316,000 March 15 as against$417,289,000 March 8. This is a decrease of, roughly,$14,000,000, but as against this the holdings ofUnited States Government securities are some $19,-000,000 larger, the increase, however, being entirelyattributable to the sale to the Federal Reserve banksof special Treasury certificates by the United StatesTreasury in connection with the income tax pay-ments due March 15, this Government borrowinghaving been done pending the collection into theTreasury of the income tax payments.A fact of interest is the appearance for the first

time of the new Federal Reserve bank notes forwhich authority was granted under the EmergencyBank legislation of last week. These Federal Re-serve bank notes are distinct from the ordinary Fed-eral Reserve notes, and up to Wednesday night ofthe present week $3,301,000 of them had been putin circulation. New York is still the point of specialstress, as is indicated by the fact that the New YorkReserve Bank is still rediscounting $143,800,000 ofits paper with other Federal Reserve banks. Lastweek, however, the rediscounting by the New YorkFederal Reserve Bank aggregated $210,000,000. TheNew York Reserve Bank increased its ratio of totalreserves to deposit and Federal Reserve note liabili-ties combined from 41.4% to 43.6%, and the 12 Re-serve banks increased their ratio from 45.6%to 49.1%.

rr HE feature of the New York stock market the present week has been the sharp rise in priceswhich came with the opening of the Stock Exchangeon Wednesday. As compared with the closing priceson Friday, March 3, the last day when business wasclone on the Exchange preceding the general closingdown, prices opened on Wednesday at an advancerunning in the case of the active stocks all of the wayfrom $3 to $10 a share. There was a further riseduring the course of the day, and a still further Ad-vance on Thursday; a part of this latter, however,was lost before the close of the day. Yesterday themarket was somewhat unsettled as a result of realiz-ing sales, but the higher level of values was wellmaintained. Bond prices moved up during the weekas sharply as share values, and the general feelingwas one of great confidence. It is stated that out-of-town buying was especially noteworthy, and thereappeared to be little evidence of any mere markingup of prices by speculative groups. The sharp ad-vance in the produce markets, and, in particular,in the case of wheat and in cotton, was, of course,an additional element of strength.As noted further above, the rise in the price of

wheat on the Chicago Board of Trade, on Thursay,the day when dealings were resumed, reached 5c. a

bushel, the limit for a day's fluctuations, and theBoard of Trade proceeded promptly to arrange forthe abandonment of this limit for the immediatefuture. The May option for wheat in Chicago closedyesterday at 531/8c. a bushel, as against 487/8c. abushel at the close on Friday, March 3. The priceof cotton on the New York Cotton Exchange forthe future options advanced on Thursday all the wayfrom $2.50 a bale to $3.50 a bale. And the spot priceof cotton was 6.85c. on Thursday, as against 6.35c.on Friday, March 3. Yesterday the spot price ofcotton was 6.55c. As far as the general trade situa-tion is concerned there has been no change of conse-quence, though sentiment appeared to have greatlyimproved in the business world generally. The"Iron Age" reported the steel mills of the country asengaged to only 15% of capacity, the same figureas the week previous, but expressed a belief that thesteel business will improve as an aftermath of thebanking holiday. The rising volume of business,according to the "Age," was likely to be accompaniedby an increase in price, and attention is directedto the fact that already there has been a rise of 25c.a ton in heavy steel scrap at Pittsburgh. Of thestocks sold on the New York Stock Exchange no lessthan 244 reached new high levels for the year thepresent week, while only 40 dropped to new lowlevels. On the New York Curb Exchange 79 newhighs were attained during the week, and 104 newlows. The call loan rate on the Stock Exchange wascontinued at 5% the early part of the week, but onFriday dropped to 3%.Trading has been on a large scale, but fell off on

Friday. On the New York Stock Exchange thesales on Wednesday were 3,065,587 shares, and onThursday 3,300,585 shares. On Friday they were1,726,680 shares. On the New York Curb Exchangethe sales on Wednesday were 316,960 shares; onThursday, 377,213 shares, and on Friday, 216,341shares.As compared with the close on Friday, March 3,

prices show large gains all around. General Electricclosed yesterday at 14% against 117/8 on Friday,March 3; Brooklyn Union Gas at 71 against 65;North American at 221/4 against 201/8; StandardGas & Elec. at 91/4 against 9; Consolidated Gas ofN. Y. at 49 against 463/4; Pacific Gas & Elec. at 25against 24; Columbia Gas & Elec. at 121/4 against115/8; Electric Power & Light at 51/2

against 4/8;Public Service of N. J. at 411/2 against 401/8; Inter-national Harvester at 22% against 1634; J. I. CaseThreshing Machine at 47% against 36%; Sears, Roe-buck & Co. at 197/8 against 14%; Montgomery Ward& Co. at 13% against 10%; Woolworth at 311/4against 281/4 ; Safeway Stores at 35 ex-div. against301/4

; Western Union Telegraph at 23% against 20;American Tel. & Tel. at 103% against 99/8; Inter-national Tel. & Tel. at 71/2 against 6; American Canat 595/8 against 54%; United States Industrial Alco-hol at 201/2 against 15; Commercial Solvents at12% against 10%; Shattuck & Co. at 8 against 61/2,and Corn Products at 571/4

against 49%.Allied Chemical & Dye closed yesterday at 841/4

against 771/2 on Friday, March 3; Associated DryGoods at 41/2 against 4; E. I. du Pont de Nemours at40 against 35; National Cash Register "A" at7% against 57/8 ; International Nickel at 8% against71/8; Timken Roller Bearing at 161/2 against 1434 ;Johns-Manville at 17 against 13%; Gillette SafetyRazor at 15% against 147/8 ; National Dairy Prod.


Volume 136 Financial Chronicle 1759ucts at 14% ex-div. against 11%; Texas Gulf Sul-phur at 191/8 against 17; American & Foreign Powerat 6 against 5; Freeport-Texas at 211/2

against 1834;United Gas Improvement at 17% against 17%; Na-tional Biscuit at 39 ex-div. against 35; Coca-Cola at84% against 85; Continental Can at 435/s

against38%; Eastman Kodak at 591/2

against 53; GoldDust Corp. at 15% against 13%; Standard Brandsat 1634 against 15; Paramount Publix Corp. at 1/2against %; Westinghouse Elec. & Mfg. at 27 against22%; Drug, Inc., at 341/2

against 327/8; ColumbianCarbon at 311/2

against 27; Reynolds Tobacco classB at 3134 ex-div. against 28%; Lorillard at 13%against 1134; Liggett & Myers class B at 5934against 5334, and Yellow Truck & Coach at 31/2against 2%.The steel shares have bounded up with the rest

of the list. United States Steel closed yesterday at301/2 against 26% on Friday, March 3; United StatesSteel preferred at 64 against 56; Bethlehem Steel at14% against 12, and Vanadium at 12% against 87/8.In the auto group Auburn Auto closed yesterday at371/2 against 351/2

on Friday, March 3; General Mo-tors at 13% against 1034; Chrysler at 10% against8%; Nash Motors at 14 against 12%; Packard Mo-tors at 2% against 2; Hupp Motors at 2% against134, and Hudson Motor Car at 414 against 31/8. Inthe rubber group Goodyear Tire & Rubber closedyesterday at 15% against 12 on Friday, March 3;B. F. Goodrich at 5% against 31/2, and United StatesRubber at 41/2 against 31/2.The railroad shares have also advanced to much

higher figures. Pennsylvania RR. closed yesterdayat 18% against 15% on Friday, March 3; AtchisonTopeka & Santa Fe at 4414 against 38%; AtlanticCoast Line at 22 against 19%; Chicago Rock Island& Pacific at 4% against 4; New York Central at19% against 14%; Baltimore & Ohio at 11% against9; New Haven at 14% against 12%; Union Pacificat 77% against 69%; Missouri Pacific at 3% against2%; Southern Pacific at 16% against 13%; Mis-souri-Kansas-Texas at 8 against 6%; Southern Rail-way at 7% against 5; Chesapeake & Ohio at 29%against 26%; Northern Pacific at 1434 against 121/2,and Great Northern at 91/2 against 8.The oil shares have not failed to participate in the

general rise. Standard Oil of N. J. closed yesterdayat 26% against 24 on Friday, March 3; Standard Oilof Calif. at 2334 against 19%; Atlantic Refining at15% against 14%, and Texas Corp. at 13% against111/2. In the copper group Anaconda Copper closedyesterday at 77/8 against 57/8 on Friday, March 3;Kennecott Copper at 10% against 77/8 ; AmericanSmelting & Refining at 16 against 12; Phelps Dodgeat 634 against 5%; Cerro de Pasco Copper at 8%against 71/4, and Calumet & Hecla at 2% against2 bid.

PRICE trends on stock exchanges in the leadingEuropean financial centers were somewhatirregular this week. The early sessions were un-certain, especially at London and Paris, but after thebouyant opening at New York was reported, quota-tions advanced in the European markets. Therewas also a considerable increase in activity afterthe favorable reports from New York were received.The trend on the Berlin market was generally cheer-ful, owing to the belief that the Nazi victory willbe followed by a period of political stability in Ger-many. The extension last week of the bank holiday

in the United States and the measures taken forprogressive opening of the institutions early thisweek caused much uncertainty in European marketsregarding the actual state of affairs in the UnitedStates, and there was a disposition at first to awaitdevelopments. The fears of prolonged troubles werequickly allayed, however, and securities were in gooddemand beginning with the mid-week sessions. Alleyes were directed toward the United States, as theview still prevails in Europe that the course of theworld-wide depression is dependent largely on de-velopments in this country. Little change is re-ported, currently, in trade and industrial indicesof the foremost countries of Europe. The financialsituation remains favorable, as the wave of hoardingin the United States was not followed by any similarmove on the other side of the Atlantic.The London Stock Exchange was dull and uncer-

tain in the initial dealings, Monday. British fundseased slightly, while most industrial stocks alsoshowed small losses. International securities wereheavy owing to the fears regarding the United Statesbanking situation, and unfavorable political devel-opments elsewhere. Gold mining issues receded onreports of labor difficulties in the South Africanfields. The market was steadier Tuesday, but deal-ings were on a very modest scale. British fundswere firm and some features appeared in the indus-trial section, notably among brewery stocks, whichadvanced on the prospect of early legislation in theUnited States permitting consumption of this bever-age with a small alcoholic content. It is believedthe export trade of the principal British brewerieswill benefit. International issues remained heavy.After early dullness, Wednesday, prices advancedin almost all sections of the London market, withgreatest gains recorded late in the day when newsof the good opening at New York was received. Theinternational group showed best results, but Britishfunds and home industrial stocks also gained. Thefirm tendency was continued, Thursday, on ad-ditional favorable reports from New York. Inter-national securities were especially active and higher.British funds showed a cheerful trend, while mostBritish industrial stocks also hardened further.Prices again advanced in active dealings yesterday.British funds were especially favored.Liquidation was the rule on the Paris Bourse in

the first session of this week, and substantial losseswere reported in almost all stocks. The disquietingtrend of European political events was an importantfactor, dispatches said, while confusion also pre-vailed with regard to the American banking situa-tion. The Finance Ministry opened subscriptionlists for 3,000,000,000 francs of a 10,000,000,000-franc consolidation loan authorized last week. Thisissue bears 41/2% coupons and the price was 981/2.The bonds are redeemable at semi-annual drawingsover 60 years at 1,500 francs for each 1,000 francspar value. The Bourse was quiet Tuesday, and noimportant variations developed. Rentes were weakowing to liquidation by holders who preferred to buythe new loan. After an uncertain opening, pricesadvanced Wednesday, the late improvement beingattributed both to complete subscription of the3,000,000,000-franc portion of the loan, and betterreports from New York. Most stocks regained theirearly losses, while some issues showed net improve-ment for the day. The mid-month settlement wasaccomplished easily, with money at 34 of 1%. The


1760 Financial Chronicle March 18 1933

Bourse was animated for a short period, Thursday,by the favorable trend at New York, but the Euro-pean political situation was a counter-weight whichdragged levels down again and net changes wereunimportant. International securities were wellmaintained. The trend was irregular at Parisyesterday, with turnover small.Prices advanced sharply on the Berlin Boerse in the

first dealings of the week, Monday, with the morespeculative stocks in greatest demand. Gains in themore active issues ranged up to 7 points. A reactiondeveloped in the early dealings, Tuesday, but publicbuying assumed large proportions at the reducedlevels, and the upswing was soon resumed. Potashstocks and a few of the mining issues made net gainsfor the day, but other securities did not quite regaintheir early losses. The trend Wednesday was irregu-lar, with mining stocks in fair demand while mostothers declined. Reichsbank shares dropped on re-ports that Dr. Luther would resign the presidencyof the institution. Activity increased markedly onthe Boerse, Thursday, with the general tone firmowing to the good reports from New York. Reichs-bank shares again receded and a few other issuesalso lost ground, but the general trend was upward.Mining stocks were especially active, while elec-trical issues also showed good results. The generallist again advanced yesterday, on rumors that theReichsbank rate will be reduced.

RUMBLING threats of war in many parts ofEurope have stirred the leading nations ofthe Old World to renewed and more pointed con-sideration of the disarmament problem. PrimeMinister Ramsay MacDonald of Great Britain,whose faith in conferences never flags, took thelead in the endeavor to reduce the number of bris-tling bayonets that the two armed camps of theContinent are pointing at each other. He laid be-fore the somnolent General Disarmament Confer-ence at Geneva, Thursday, a proposal which wouldcurtail European armies by nearly 1,000,000 men.If accepted, the plan would revise the onerous armsprovisions of the Treaty of Versailles and wouldoccasion participation by France and Italy in theLondon Naval Treaty of 1930. This "suggestion,"as Mr. MacDonald called his treaty of 96 articles,was presented to the Conference after extensive con-versations with Premier Edouard Daladier ofFrance. The British statesman is also to discussthe matter with Premier Benito Mussolini in Romeover the coming week-end.The need for energetic action to prevent the cross-

currents of international aims and purposes inEurope from occasioning further ill will, and pos-sibly war, has never been plainer. The Fascist tri-umph in Germany has brought the Western Euro-pean nations face to face with the possibility of analliance between the Reich and Italy, with Austria,Hungary and Bulgaria included in the combination.The opposing Entente, well established, consists ofFrance and Belgium, and their satellite States ofCzechoslovakia, Poland, Yugoslavia and Rumania.The London Government, tending to side withFrance on most important questions, still plays thetraditional role of intermediary whenever possible.In the background is the well-armed Russian Soviet,plainly desiring nothing more than peace so that theinternal program can be worked out. Germany andher Central European associates are exerting tre-

mendous pressure for revision of the Versaillestreaty clauses on arms, and Italy has given friendlysupport on many recent occasions. There werealarming indications early this week that the presentFascist leaders of the Reich will be less temperatein their program than their rePublican predecessors.Detachments of the Fascist "storm troops" werelodged in the demilitarized Rhineland, and theFrench Government promptly made a formal protestat Berlin. The German Government rejected theprotest as "unfounded," Tuesday. Any outbreak inWestern Europe, it is realized, probably would occuras a result of conflicts of interest in the Balkans andthe Baltic States. The situation in this regard is oneof hopeless confusion. The sedate London "Times,"contemplating the Continental scene, remarked lastSunday that "at no time since 1914 has there beenso much open and alarmed talk about war or a situa-tion more immediately threatening."Prime Minister 'MacDonald journeyed to Geneva

last Saturday in order to stir the 14-months-old Dis-armament Conference into some semblance of life.He proposed, Thursday, a transitional treaty onarms, for a period of either one or five years, thedisarmament provisions of the Versailles pact tolapse at the expiration of the interim accord, andequal rights for Germany and other Central Euro-pean nations to come into force. France and Ger-many, he said, should agree to a "balance sheet ofrisks," whereunder armaments would be reduced onthe one hand and security guaranteed on the other.The German army of 100,000 effectives should beincreased to 200,000, he continued, while the Conti-nental army of France should be reduced from578,900 to 200,000, with suitable numbers remainingin the French colonies. The Russian army likewiseshould be curtailed from 562,000 to 500,000, thePrime Minister indicated. No figures were pre-sented for Great Britain."The outstanding features of the British draft

treaty are its precision in figures, its vagueness inits political security provisions, and the relativesmallness in both categories of the sacrifices theBritish themselves propose to make," a Geneva dis-patch to the New York "Times" remarked. "Thegreat contribution thus far is to put the discussionon a new and broader basis. The treaty wouldscrap all cannon above 6-inch calibre and forbidreplacements above the 4-inch limit imposed on Ger-many. It would scrap tanks above 16 tons, thestrength of the British, as of most others, lying inthe lighter tanks. Pending the abolition of waraviation, the treaty urges control of civil aviationand provides parity of 500 planes each for the sevengreat Powers. The treaty would bring France andItaly into the London naval treaty on the basis ofNorman H. Davis's proposal of December. It re-quires a world naval parley in 1935, meanwhilestabilizing the minor Powers. "Confidence has beendisturbed," the Prime Minister said, eyeing CountRudolph Nadolny of Germany. Turning towardPremier Daladier of France, he added: "EitherGermany must be given justice and freedom, orEurope will risk destruction." Discussion of theBritish draft treaty was adjourned by the Confer-ence until next Thursday, and in the meantime Mr.MacDonald will confer personally with the ItalianPremier. In Washington, President Roosevelt dis-cussed the disarmament problem Thursday with theBritish, French and German Ambassadors. The


Volume 136 Financial Chronicle 1761President, it was reported, is prepared to use theinfluence of the United States to dissipate the warclouds and achieve a disarmament agreement.

ADMINISTRATION officials in Washington arelikely to resume within a few days the pre-liminary negotiations for a review of the war debtsettlements, which were interrupted by the bankingcrisis early this month. Secretary of State CordellHull conferred with President Roosevelt on thismatter and the plans for the forthcoming GeneralEconomic Conference, Wednesday. Washingtonreports indicate that Secretary Hull soon will beginconversations with Sir Ronald Lindsay, Ambassa-dor of Great Britain, and with T. K. Bewley, theBritish Treasury expert who is financial adviserto the Ambassador. It is expected, a dispatch tothe New York "Times" asserts, that after he hasbegun discussions with the British Ambassador,Secretary Hull will confer with other foreign diplo-mats on the same questions as opportunity offers.The French Government, according to Paris reports,is seeking means for making the payment of $19,-261,000 due Dec. 15 last, on which default occurredafter the French Chamber of Deputies refused toauthorize the expenditure. French opinion is nowsaid to be somewhat more favorable to making pay-ment, owing to tactful handling of the situation byPresident Roosevelt and the banking crisis in theUnited States. Former Premier Edouard Herriothas been lobbying in the Government's behalf, aParis dispatch to the Associated Press states. Heis seeking pledges from the Deputies for favorablevotes in case Premier Edouard Daladier should de-cide to request permission of the Chamber for pay-ment of the debt instalment now overdue, the dis-patch adds.

NUMEROUS developments in Germany continueto attest the complete control of the ReichGovernment by the Fascist Chancellor, Adolf Hitler,and his National-Socialist and Nationalist partyfollowers. The fact that Germany has turned fromrepublicanism and is now ruled by a Fascist dic-tatorship, necessarily will occasion marked inter-national changes in Europe. Some of these alreadyare apparent in a closer accord between GreatBritain and France, and in the renewed efforts ofthe British Prime Minister to achieve some measureof disarmament at the general conference in Geneva.The change has caused uneasiness throughoutEurope, as the delicate balance of internationalrelationships in the Old World is easily disturbedand all Europeans are fearful of further clasheswhich might eventuate in another World War. Itis interesting to note, meanwhile, that some of thebest informed foreign observers in Berlin place themajor share of the blame for recent developmentsin the Reich upon the former Allied governments.

The unremitting pressure upon Germany by herEuropean conquerors during the last 14 years issaid by such observers to be the main reason forthe change in German psychology and the apparentfailure of the democratic experiment in the Reich.

Municipal and communal elections were heldthroughout Prussia last Sunday, and the successesof the Nazis and their Nationalist allies in the Par-liamentary election of the previous Sunday wereduplicated in the minor plebiscites. Fewer ballotswere cast in the voting for officials of city and

town councils, as the Communist and Socialistopponents of Fascism were discouraged by the re-sults of the national election and preferred to ab-stain from voting, an Associated Press dispatchfrom Berlin said. The Nazis, accordingly, obtainedcontrol of the councils in all important cities inPrussia. They will have a majority even in theBerlin Council, although the capital returned aheavily Socialistic Council in all free elections ofthe last 14 years. Chancellor Hitler moved late lastweek to supplant all the State governments in theReich with Fascist regimes, and the rule of theFascists is now complete throughout Germany. Thenew Reichstag and the Prussian Diet will meet forthe first time next week. Since these Parliamentswill be dominated by the recently-elected Fascistmajorities, they can hardly be expected to do morethan register the will of the present rulers of Ger-many, and interest in the meetings is at a low ebb.A spectacular indication of the present trend in

Germany was given last Sunday, when ChancellorHitler announced a Presidential decree calling forthe display of the red, white and black flag of Im-perial Germany, together with the Hakenkreuz(Swastika) of the Fascist movement. The decreeof President Paul von Hindenburg caused amaze-ment, as the red, white and gold colors of republicanGermany are provided for in Article 3 of the WeimarConstitution, and no decree can legally effect achange in this part of the fundamental law of theReich. Constitutionally, this Article can beamended only by a two-thirds vote of the Reichstag."The conclusion is inevitable," a Berlin dispatch tothe New York "Herald Tribune" remarks, "that theGerman Constitution in this case has been simply

overridden, but the republican newspapers of Ger-many dare not print a word of criticism. Theprestige of President von Hindenburg among therepublican portion of the population is completelyruined by to-day's developments. He no longer com-mands the confidence of the entire nation, as he dida year ago. He was re-elected at that time by therepublican vote in the confident expectation thathe would preserve the Constitution. In this beliefthe German republicans have been sorely deceived."The Fascist leaders began to take steps last week

to present further spread of the methods of intimida-tion utilized so effectively by the Nazis during theelection campaigns. United States AmbassadorFrederic M. Sackett lodged several official protestswith the Ilerlin Government last week againstassaults by Nazis on American citizens, but twoadditional instances of such practices were reportedlast Sunday. Chancellor Hitler issued personal in-structions to his Fascist followers last Monday tohalt the personal persecutions and interferenceswith private businesses, which were directed almostentirely against persons of the Jewish faith. Thepolitical tension in the Reich relaxed markedly afterthis action was taken, a report to the New York"Times" states. The profound dissatisfaction occa-sioned in republican circles by the recent events wasreflected, Tuesday, in the reported resignation ofthe German Ambassador to Washington, Dr. Fried-rich Wilhelm von Prittwitz und Gaffron. A changein the Reichsbank presidency occurred Thursday,also as a result of the new order of things in Ger-many. Dr. Hjalmar Schacht, whose fitness for thepost has been amply demonstrated by his directionof the Reichsbank during some of its most trying


1762 Financial Chronicle March 18 1933years, was appointed President of the institutionto succeed Dr. Hans Luther. In a number of Berlindispatches it was stated early this week that Chan-cellor Hitler was employing intimidation to forceDr. Luther out of the office. The Berlin corre-spondent of the New York "Herald Tribune" saidthat Chancellor Hitler considered removing Dr. Lu-ther by means of a presidential decree, but was pre-vented from doing so by the interposition of theForeign Minister, Baron Konstantin von Neurath,who pointed out that such action might lead to inter-national complications.

RELATIONS between Great Britain and SovietRussia have become strained to a degree as aresult of the arrests by members of the OGPU(secret police) of four British engineers attached tothe Moscow office of Metropolitan-Vickers, a Britishcorporation. The arrests were made in a series ofraids last Sunday and Monday. 'Several Russianemployees of the firm also were placed under arrestwhen the police searched the offices of the company.The OGPU issued a statement Monday, in which itaccused the Britons of complicity in a widespread"damaging plot" against important electric powerstations in Moscow, the Donets Basin and elsewhere.The existence of a counter-revolutionary plot wasalleged in the statement, owing to a number of seri-ous accidents at the stations. Six British employeesof Metropolitan-Vickers were accused of complicity,while 25 Russian engineers also were said to beinvolved. Alan Monkhouse, manager of the Moscowoffice of the company, was released after 48 hours,on his signed agreement not to leave Moscow. Heridiculed the charges and pointed out that diffi-culties of operation constantly were being encoun-tered, probably as a result of unskilled help, imper-fectly filtered water, and the like. The British Am-bassador to Moscow, Sir Esmond Ovey, lodged asharp protest with the Foreign Office, and a similarprotest was made by the London Government toI. M. Maisky, Soviet Ambassador. Stanley Baldwin,Acting Prime Minister, informed the House of Com-mons of the incident, Wednesday, and he hinted that"unfortunate consequences to Anglo-Soviet rela-tions" may result. Mr. Baldwin asserted thecharges against the engineers were wholly unjusti-fied. Efforts were being directed, he added, to ob-taining information regarding the exact charges onwhich the Britons were arrested and the facilitiesfor defense which would be granted the accused.Mr. Baldwin assured the House that the Governmenttakes a "very grave view" of the matter.

A"uSTMENT of a troubled situation at Danzigwas achieved at a special meeting of theLeague of Nations Council in Geneva, Tuesday,clearly as a result of pressure exerted by the leadingnations of Europe. The Free State of Danzig is oneof the danger spots in Europe, created by the peacesettlement after the World War, and it has severaltimes figured in international "incidents" thatthreatened to cause war between Poland and Ger-many. The most recent trouble developed when aPolish vessel landed 100 Polish troops at Wester-platte, a Polish ammunition depot maintained inDanzig harbor. Under the League of Nations regu-lations a military guard of only 88 men and officersmay be maintained by Poland at the base, and theadditional force more than doubled the permitted

number. The landing of the troops on March 6caused intense excitement in Danzig, which is essen-tially a German city, and all of Germany also wasaroused by the maneuver. It was feared in theReich that the move at Westerplatte was the firststep in a general mobilization of Polish troops inthe Polish corridor. Reports from Warsaw indi-cated that the measure was taken only because theammunition base no longer seemed safe, in view ofthe wave of nationalism in Germany. The DanzigGovernment immediately laid the matter before theLeague of Nations and requested a prompt decisionby the Council.The hearing was held at Geneva, Tuesday, after

arduous negotiations the previous night in which, adispatch to the New York "Times" said, France andGreat Britain succeeded in inducing Poland toswallow her pride and admit the mistake. ColonelJoseph Beck, Foreign Minister of Poland, admittedin the hearing that his Government had taken a step"not in conformity" with treaties, when the guardat the Westerplatte ammunition base was increasedwithout the consent of the League's high commis-sioner for Danzig. Immediate and unconditionalwithdrawal of the extra troops was promised by thePolish Foreign Minister. Dr. Ernest Ziehm, Presi-dent of the Danzig Senate, guaranteed Polishsecurity at Westerplatte, and to this guarantee thePoles were said to attach much importance. Theformal adjustment was quickly made, and the com-ments made thereafter by the representatives of theleading European countries were almost as interest-ing as the settlement itself. The report to the NewYork "Times" mentioned that Foreign SecretarySir John Simon, of Great Britain, used languageoften heard from others in the Manchurian conflict.He stressed the "full vindication" of League prin-ciples, and added that neither party to a disputeis entitled to take the law into its own hands. TheGerman Council member, Dr. A. F. W. von Keller,had a good word to say for everybody except Poland.Joseph Paul-Boncour, of France, speedily supple-mented the tributes of Dr. von Keller with con-gratulations to Colonel Beck for his "conciliatoryspirit."

AUGIVIENTED by a representative of the UnitedStates Government, who will function chieflyas an observer, the League of Nations Committee ofTwenty-one began, Wednesday, its further studyof the conflict between Japan and China, which wasoccasioned by the Japanese conquest of Manchuriaand the Province of Jehol. Washington repliedformally on March 13 to the League invitation, ex-tended to the United States and Russia, for partici-pation in the deliberations of the Committee.Russia replied last week and declined the invitation.The United States Government went only a littlefurther, as the representative of this Governmentwill have no power to vote or to bind the country byany action. Membership on the Committee is de-sired mainly, a Washington statement said, to pro-vide an informative contact. "We believe," Secre-tary of State Cordell Hull said Wednesday, "thatthe importance of the problem calls for promptnessand accuracy in exchange of information and views;that the dictates of common sense call for consulta-tion with free and frank discussion among thenations, and that the procedure thus suggested willcontribute toward the serving of those ends in the


Volume 136 Financialinterests both of the United States and of all othercountries concerned." The reply to the League, pub-lished at the same time, emphasizes the necessity forindependence of judgment on the part of the UnitedStates. Hugh R. Wilson, American Minister toSwitzerland, was appointed the representative ofthe United States.The League of Nations already is on record as

favoring continued Chinese sovereignty in Man-churia and opposing recognition of the Japanesepuppet State, Manchukuo. The Manchurian Ad-visory Committee, with Mr. Wilson present, tookup the study of the problem on this basis in its firstformal meeting, Wednesday. Two subcommitteeswere named to consider the main phases of the ques-tion. One body will debate the application of anarms embargo in the Far East, to be applied eitherto both countries or to Japan alone. The otherformulated plans for the practical application ofthe principle of non-recognition of Manchukuo.Mr. Wilson, together with representatives of allother great Powers, was named on both subcommit-tees. Just before these studies were started, an-nouncement was made in London that the Britishembargo on arms shipments to China and Japan,imposed Feb. 28, would be discontinued, because noother country had followed the British example.The Tokio Government, meanwhile, is still delay-ing its threatened withdrawal from the League ofNations. The procedure to be followed by Japan inresigning from the League was under considerationby the Tokio Cabinet late last week, dispatches said.Although Japanese control of Manchuria and

Jehol is now complete, fighting between the troopsof the two contestants still is in progress at severalimportant mountain passes. Chinese resistance isespecially stubborn at Sifeng Pass, where the LwanRiver flows through the Great Wall of China. Asharp conflict also is reported at Kupei Pass, 60miles west of Sifeng Pass. The troops of the Man-churian Marshal, Chang Hsiao-liang, were replacedlast week by the better trained divisions of GeneralChiang Kai-shek, who is the real ruler of the Nan-king Nationalist Government of China. Theseforces resisted the Japanese, it is said, only whenthe latter attempted to penetrate the Great Walland move south on undisputed territory. Japaneseairplanes bombed areas as much as eight miles southof the Passes, according to neutral observers. Inview of the Chinese resistance, there have been nu-merous intimations from Tokio this week that theoperations of the Japanese military forces may beextended southward to Peiping and Tientsin. Somereports from Peiping state, however, that there is agood possibility of direct Sino-Japanese negotiationson the North China situation.

THERE have been no changes the present week1 in the discount rates of any of the foreignCentral banks. Present rates at the leading centersare shown in the following table:

DISCOUNT RATES OF FOREIGN CENTRAL BANKS.

country.Rate inEffectMar17

DateEstablished.

Pre-obitsRate.

Country.Rate inEffectMar17

DateEstablished.

Pre-agoutiRate.

Austria--Belgium.- -Bulgaria._ .Chile ------Colombia - .Czechoslo-4a4ig..._

Danzie__..Denmark. .England . __Estonia----Finland.France.--Germany..

83348344345

334433425 %623440

Aug. 23 1932Jan. 13 1932May 17 1932Aug. 23 1932Sept. 19 1932

Jan. 25 1933July 12 1932Oct. 12 1932June 30 1932Jan. 29 1932Jan. 31 1933Oct. 9 1931Sept. 21 1932Deo. 3 1932

72349145346

4345423463472510

Holland_ _ _Hungary India Ireland__Italy Japan Lithuania Norway. - -Poland _ _ - -Portugal_ --Rumania_ _South AfricaSpain Sweden__ - -Switzerland

234434334344.387466347463342

Apr. 18 1932Oct. 17 1932Feb 181933June 30 1932Jan. 9 1933Aug. 18 1932May 5 1932Sept. 1 1932Oct. 20 1932Apr. 4 1932Mar. 3 1932Feb. 21 1933Oct. 22 1932Sept. 1 1932Jan. 22 1931

38433455.117344347347856344214

Chronicle 1763In London open market discounts for short bills on

Friday were 9-16@M%, as against /11-16% onFriday of last week, and 9-16@/% for three months'bills, as against 11-16@%% on Friday of last week.Money on call in London on Friday was 3/%. AtParis the open market rate remains at 1%, and inSwitzerland at 13/2%.

THE Bank of England statement for the week endedMar. 15 shows another large gain in gold hold-ings, this time in amount of 6,433,911 which bringsthe total up to 167,134,991, the largest since Oct. 31.1928 when the figure was 167,147,224. At Mar. 161932, the figure was only 121,461,077. An ex-pansion of 189,000 in circulation partly offset thegain in gold and the increase in reserves was thereforereduced to 5,945,000. The reserve ratio rose to48.55% this week from 44.65% a week ago and com-pares with 18.22% at Jan. 4 1933 and 37.18% in thesame week a year ago. Public deposits rose L6,-283,000 while other deposits fell off L7,071,107. Ofthe latter amount 6,431,563 was from bankers'accounts and 639,544 was from other accounts.Loans on government securities decreased 0,-795,000 while loans on other securities increased67,123. The latter consists of discounts and ad-vances and securities which rose 17,726 and 49,397,respectively. The discount rate is unchanged at2%. Below we show the figures with comparisonsfor previous years:

BANK OF ENGLAND'S COMPARATIVE STATEMENT.

March 151933.

March 161932.

March 181931.

March 191930.

March 201929.

Circulation a 363,816,000 353,714,022 347,286,744 348,890,201 353,868,645Public deposits 21,267,000 9,477,179 10,499,765 12,882,680 19,423,868Other deposits 140,031,810 105,487,033 93,023,486 97,969,498 99,594.585Bankers accounts_ 106,145,906 73,054,023 59,795,625 62,086,473 62,332,186Other accounts... 33,885,904 32,433,010 33,227,861 35,883,025 37,262,399

Govt. securities 71,910,258 40,295,906 28,904,684 41,481,563 47,916,855Other securities 29,311,138 50,176,430 37,367,056 22,318,484 30,467,795

Disct. & advances_ 11,778,882 11,379,502 8,021,417 6,060,054 12,582,128Securities__ 17,532,256 38,796,928 29,345,639 16,258,430 17,885,667

Reserve notes & coin 78,368,000 42,747,055 55,539,869 65,355,174 58,957,207Coin and bullion.... 167,134,991 121,461,077 142,826,613 154,245,375 152,825,852Proportion of reserve

to liabilities 48.55% 37.18% 53.64% 58.95% 49.53%Bank rate 2% 314% 3% 335% 5 14 %a On Nov. 29 1928 the fiduciary currency was amalgamated with Bank of England

note issues, adding at that time 234,199,000 to the amount of Bank of Englandnotes outstanding.

THE Bank of France statement for the week endedMar. 10 shows a decline in gold holdings of288,060,003 francs. Gold holdings now stand at80,823,221,259 francs, which compares with 76,-159,288,503 francs last year and 56,094,849,943francs the previous year. Credit balances abroadrose 54,000,000 francs while bills bought abroad felloff 58,000,000 francs. An increase in note circula-tion of

_21,000,000 francs raises the total of notesoutstanding to 85,499,193,470 francs. Last year cir-culation stood at 82,580,847,660 francs and the pre-vious year at 77,810,273,870 francs. French com-mercial bills discounted, advances against securitiesand creditor current accounts record increases of615,000,000 francs, 104,000,000 francs and 361,-000,000 francs respectively. The proportion of goldon hand to sight liabilities is now at 76.78%, a yearago it was 69.38%. Below we furnish a comparisonof the various items for three years:

BANK OF FRANCE'S COMPARATIVE STATEMENT.

Changesfor 1Veek. Mar. 10 1933 Mar. 11 1932. Mar. 13 1931.

Francs. Francs. Francs. Francs.Gold holdings

288,060,00380,823,221,259 76,157,288,503 56,094,849,943Credit bals. abroad_a French commercial

bills discounted

+54,000,000

+615,000,000

2,508,754,516

3,658,339,666

4,149,750,853

4,504,126,717

6,946,515,453

6,195,961,4926131118 bought abroad 58,000,000 1,868,479,414 8,934,035,128 19,363,070,831Adv. against securs_ +104,000,000 2,764,296,051 2,778,755,910 2,901,698,259Note circulation. +21,000,00085,499,193,470 82,580,847,660 77,810,273,870Credit current accts. +361,000.000 19,772,525,641 27,186,694,361 23,575,954,211Proportion of goldon hand to sightliabilities

0.55% 76.78% 69.38% 53.33%a Includes bills purchased In France. b Includes bills discounted abroad.


1764 Financial Chronicle March 18 1933

THE Reichsbank's statement for the second quarterof March shows a decline in gold and bullion of10,674,000 marks. The Bank's bullion now aggre-gates 738,983,000 marks, in comparison with 876,-859,000 marks a year ago and 2,286,184,000 markstwo years ago. Increases are shown in reserve inforeign currency of 12,694,000 marks, in silver andother coin of 37,580,000 marks, in notes on otherGerman banks of 2,282,000 marks, in investments of63,000 marks, in other assets of 40,578,000 marks andin other daily maturing obligations of 18,814,000marks. Notes in circulation record a contraction of26,869,000 marks, reducing the total of the item to3,266,406,000 marks. Circulation a year ago stoodat 4,113,151,000 marks and the year before at3,967,994,000 marks. Bills of exchange and checks,advances and other liabilities register decreases of93,592,000 marks, 3,497,000 marks and 6,511,000marks respectively. The proportion of gold andforeign currency to note circulation is now at 26.1%,as compared with 24.8% last year and 62.9% in 1931.A comparison of the various items for three years isfurnished below:

REICHSBANK'S COMPARATIVE STATEMENT.

Chantiesfor Week. Mar. 151933.Mar. 151932.Mar. 14 1931.

Assets Retchsmarks. Reiclismarks. Reichsmarks. Retchsmarks.Gold and bullion 10,674,000 738,983,000 876,859,000 2,286.184,000Of which depos. abroad No change 50,453,000 77,577,000 207,638,000Reserve in foreign curr_ .+12,694,000 113,327,000 141,666,000 209,164,000Bills of exch. and checks 93,592,000 2,508,844,000 3,302,893,000 1,629,352,000Silver and other coin_ _ _ +37,580,000 255,873,000 175,749,000 179,264,000Notes on other Ger. bks +2,282,000 10,810,000 7,416,000 18,699,000Advances

3,497,000 82,316,000 200,170,000 91,315,000Investments +63,000 401,131,000 161,752,000 102,264,000Other assets +40,578,000 681,610,000 854,994,000 551,145,000

LiabilitiesNotes in circulation 26.869,000 3,266,406,000 4,113,151,000 3.967,994,0000th. daily matur. oblii. +18,814,000 355,014,000 344,470,000 265,866,000Other liabilities 6,511,000 604,048,000 776,547,000 339,600,000Propor.of gold & foreign

eurr, to note eIrcurn. +0.3% 26.1% 24.8% 62.9%

MONEY rates in the New York market surgedupward early this week when dealings wereresumed after the banks reopened, and they droppedwith equal precipitancy in later dealings. Rates onprime bankers' acceptances were increased by Vi.%all round Monday, but a drop of equal proportionsoccurred- Thursday. Further reductions amountingto M% were made yesterday. The Federal ReserveBank of New York bill buying rate was loweredyesterday from 33/ to 3% for instruments due from1 :to 90 days, no rates being quoted on later matur-ities. Commercial paper quotations were purelynominal until yesterday, when a few transactionswere reported at a rate of 4%.The Stock Exchange money market opened up

slowly, as ordinary trading on the Exchange was notresumed until Wednesday. There were reportsMonday that call loans were being renewed by thebanks at 5%. Business at the money post on theNew York Stock Exchange was resumed Tuesday,with renewals fixed at 5%, against the closing rateof 4% on March 3. With ordinary trading in securi-ties started, Wednesday, call loans on that day re-newed at 5% and this level also was quoted on newloans. Street trades were done at 432%. Theofficial renewal rate Thursday was again 5%, butthe rate for new loans was lowered to 4%, which wasthe figure quoted in the outside market. Call moneyon the Stock Exchange renewed yesterday at 4%,but new loans were contracted at 3%, while somefunds were available in the street market at 23/2%.No time money quotations were made until Wednes-day, when funds were offered at 5%, with no takers.Liberal offerings at 4% for all dates were reportedThursday, and a little business was done. The rateon time money yesterday was cut to 3327o.

A heavy draft on the money market was madeearly in the week by the United States Treasury,which offered $800,000,000 in five-months' cer-tificates of indebtedness with 4% coupons, andnine

-months' certificates with 43.i% coupons. Theissue, offered Monday, was announced as over-subscribed Tuesday, the aggregate subscriptionsbeing $1,820,000,000. The regular weekly com-pilation of brokers' loans was omitted this week bythe Federal Reserve Bank of New York. A goldstatement, covering movements during the week toWednesday night, was issued, however, and it dis-closed imports of $1,355,000 at New York and$835,000 at San Francisco. Gold holdings of theFederal Reserve banks increased heavily, however, asa result of the return of much metal to the institutionsby hoarders in this country.

DEALING in detail with call loan rates on theStock Exchange from day to day, 5% was theruling quotation both for new loans and renewals onTuesday and Wednesday, the Stock Exchange havingbeen closed until the latter day. On Thursday re-newals were put through at 5% but the rate for newloans were reduced to 4%. On Friday, after renewalshad been made at 4%, the rate for new loans wasmarked down to 3%. The time money market hasbeen at a standstill the present week and no quota-tions were made until Wednesday, when money wasoffered at 5% for all maturities, on Thursday offeringswere at 4% and on Friday at 332%, but none of theseofferings were availed of. The market for commer-cial paper has been mostly nominal, a few transac-tions being reported on Friday at 4%.

e--

THE market for prime bankers' acceptances hasshown a good demand though paper is still

scarce. Rates were raised on Monday 3 of 1% forall maturities in both the bid and asked columns, butwere reduced on Thursday by 34 of 1%. On Fridaythere were two further reductions of WI of 1%,lowering the rates M of 1% on all maturities in boththe bid and asked columns. The quotations of theAmerican Acceptance Council for bills up to andincluding three-months' bills are 3% bid and 2Y%asked; for four months, 334% bid and 33/8% asked;for five and six months, 332% bid and 3V% asked.The bill buying rate of the New York Reserve Bankwas lowered on Thursday from 33/2 to 3% for billsrunning from 1 to 90 days. No rates were quoted forbills of longer maturities. The. Federal Reservebanks' holdings of acceptances have dropped duringthe week from $417,289,000 to $403,316,000. Theirholdings of acceptances for foreign correspondentsalso were lowered during the week, being $27,478,000this week as compared with $28,051,000 a week ago.Open market rates for acceptances are as follows:

SPOT DELIVERY.180 Days 150 Days 120 DaysBid. Asked. Bid. Asked. Bid. Asked.

Prime eligible bills

334 334 314 334 334 33490 Days 60 Days 30 DaysBid. Asked. Bid. Asked. Bid. Asked.

Prime eligible bills 8 234 3 234 3 234

FOR DELIVERY WITHIN THIRTY DAYS.Eligible member banksEligible non-member banks 331% bid 334% bid

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:


Volume 136 Financial Chronicle 1765DISCOUNT RATES OF FEDERAL RESERVE BANKS ON ALL CLASSES

AND MATURITIES OF El IGIBLE PAPER.

Federal Reserve Bank.Rate inEffect on Date PreviousMarch 17 Established, Rate.

BostonNew York PhiladelphiaCleveland Richmond Atlanta Chicago St. Louis Minneapolis Kansas CityDallas San Francisco

334 Oct. 17 1931 234334 Mar. 3 1933 234334 Oct. 22 1931 3334 Oct. 24 1031 3334 Jan. 25 1932 4334 Nov. 14 1931 3334 Mar. 4 1933 234334 Oct. 22 1931 234334 Sept. 12 1930 4314 Oct. 23 1931 3334 Jan. 28 1932 4334 Oct. 21 1931 234

STERLING exchange continues to display a firmundertone and is in demand in all markets.Funds are flowing to London from many centers sothat money rates in Lombard Street continue to dis-play great ease. The dollar occupies the center ofinterest in foreign exchange. Official documents per-taining to dollar exchange and the money and bankingsituation here as published in Washington and by theFederal Reserve Bank of New York will be foundin other columns of this issue. The foreign exchangemarket came to a complete standstill from March4 until Monday, March 13. At present the foreignexchange market is largely demoralized and tradingat a minimum until the market becomes more tho-roughly conversant with the regulations formulatedfor trading in dollars under the restrictions imposedby the Treasury and the Federal Reserve banks.Mr. Fred I. Kent, director and former Vice-Presidentof the Bankers Trust Co. and President of the Councilof New York University, is temporarily in chargeof foreign exchange for the Federal Reserve Bank ofNew York. Mr. Kent performed similar servicesfor the National Government when the moratoriumon gold shipments was imposed as a war measure in1917. At a meeting of foreign exchange representa-tives on Saturday in New York it was decided tosettle within 48 hours after the opening of tradingall transactions which took place prior to March 6and which fell due during the bank holiday. Asimilar decision was reached in London regardingdollar contracts. It was explained that this wouldhave no effect on open market rates,because it wouldsimply be a clearing up of contracts. At the sametime a committee was set up as a source of informa-tion for banks interested in foreign exchange. How-ever, all practical questions are being settled by Mr.Kent at his office in the New York Federal ReserveBank.When foreign exchange trading was resumed here

on Monday the market witnessed a striking advancein the dollar in terms of other currencies as comparedwith March 3, when the foreign exchange marketheld its last previous session in New York. WhenLondon got in touch with New York on Monday itwas found that the London banks were bidding 3.44for spot. On March 3 sterling closed here at 3.4532for cable transfers. Selling in London on Mondaywent as low as 3.387A. The low in New York was3.39, a net loss for sterling of 61A points. Followingthe broad gains made by the dollar on Monday therewas a reaction in the dollar on Tuesday and all theleading exchanges moved up. The dollar made newlow levels on Wednesday, after which the Europeanunits showed a tendency to ease off somewhat. OnTuesday sterling futures were quoted at a nominalpremium of 3 cents over spot for 30 days, 5 centsfor 60 days, and 7 cents for 90 days. These premiumsare considered abnormally large, but foreign exchangetraders stated that the rates were merely nominal

and that practically no business was done in thefutures market. The weakness in the dollar, ex-change brokers assert, is due almost entirely to theconfusion attendant upon the unfamiliar restrictionsnow in effect. Greater familiarity with the regula-tions will make for a greater variety of business. Asit was, in Thursday's trading the spreads were beingcut down and rates became considerably morenarrow. The New York banks have been scrupulousin observing the spirit as well as the letter of theregulations and wherever there was any doubt regard-ing a trade no attempt was made to consummate thetransaction. It is generally believed that the FederalReserve authorities will take a liberal attitude in thematter of gold withdrawals for export if it is necessaryto support the dollar. Transfer of foreign funds toLondon during the past few weeks has further easedoff money rates there. Call money against bills isin supply at M% to 14%, two-months' bills areM% to 9-16%, three-months' bills to 9-16%,four-months' bills /% to 11-16%, six-months' bills34% to 13-16%. Bill rates in New York werereduced on Thursday 3 of 1% and on Friday by twofurther cuts of 3< of 1%. A new scale was adoptedfor bankers' acceptances as follows: 30, 60, and 90days, 3% bid, 278% asked; 120 days, 314% bid,33/8% asked; 150 and 180 days, 33/2% bid, 33/%asked. The Bank of England continues to buy goldobtained by the Exchange Equalization Accountwhich is active in an endeavor to prevent sterlingfrom soaring to high levels, though at present itsoperations are confined largely to the Europeanmarkets.On Thursday the Bank of England bought L1,-

760,078 in gold bars. This gold came from the opera-tions of the Exchange Equalization Fund. TheBank of England statement for the week ended March15 shows an increase in gold holdings of 0,433,911,the total standing at 167,134,991, which compareswith 121,461,077 a year ago. The Bank's propor-tion of reserves to liabilities stands at the high figureof 48.55%, compared with 44.65% on March 8 andwith 37.18% a year ago.

- At the Port of New York the gold movement forthe week ended March 15, as reported by the FederalReserve Bank of New York, consisted of imports of$1,355,000, of which $753,000 came from China,$116,000 from Ecuador, $95,000 from India, $86,000from Chile, $63,000 from Peru, and $242,000 chieflyfrom Latin-American countries. There were no goldexports and the Bank reported no change in goldearmarked for foreign account. In tabular form thegold movement at the Port of New York for the weekended March 15, as reported by the Federal ReserveBank of New York, was as follows:

GOLD MOVEMENT AT NEW YORK, MARCH 9-MARCH 15, INCL.

Imports.$753,000 from China116,000 from Ecuador95,000 from India86,000 from Chile63,000 from Peru242,000 chiefly from Latin-Ameri-

can countries

Exports.

None.

$1,135,000 totalNet Change in Gold Earmarked for Foreign Account.

None.

Approximately $835,000 of gold was received atSan Francisco during the week, $325,000 of whichcame from China and $510,000 from Australia.There were no further reports of the gold movementon Thursday or Friday.


1766 Financial, It will be recalled thatrdurinathe bank holidayhere American dollars were quoted at from par to asevere discount in the Canadian cities. With theresumption of foreign exchange trading in New Yorkon Monday the Canadian dollar dropped to a severediscount. Montreal funds on Monday were quotedat a discount of 16%%, on Tuesday at 163%, onWednesday at 15%%, on Thursday at 1534%, andon Friday at 159'%. Referring to day-to-day rates the sterling exchangemarket remained closed on Saturday last. On Mon-day, March 13, the first day following the bankholiday, the market opened subject to restrictions.The dollar was strong in all markets, but sterlingeased off. The range was from 3.38%@3.44 forbankers' sight bills and from [email protected] for cabletransfers. On Tuesday trading was dull and sterlingwas firmer. Bankers' sight was 3.423/[email protected];cable transfers were 3.42%@3.45%. On Wednesdaysterling was firmer in dull trading. The range [email protected] for bankers' sight bills and 3.45%@3.4732 for cable transfers. On Thursday sterlingwas steady. The range was 3.45%@3.4734 forbankers' sight bills and [email protected]% for cable trans-fers. On Friday sterling was somewhat easier; therange was [email protected]/ for bankers' sight bills [email protected]% for cable transfers. Closing quota-tions on Friday were 3.463/2 for demand and 3.46%for cable transfers. Commercial sight bills finishedat 3.4634; 60-day bills at 3.4532; 90-day bills at3.4534; documents for payment (60 days) at 3.4532,and seven-day grain bills at 3.45%. Cotton andgrain for payment closed at 3.4634.

EXCHANGE on the Continental countries isfirm with respect to the dollar. These unitsbecame particularly firm in Tuesday's market, in anatural reaction to the firm dollar market on Monday.German marks are noticeably firm. On Mondaymark cable transfers, in a nominal market, werequoted [email protected]. On Tuesday the mark touched23.90 and on Wednesday went to 24.02. Par ofthe mark is 23.82. The strength in marks was themore surprising in view of the unsatisfactory returnsfrom Germany's February foreign trade. There wasan improvement over January, but the rate of surplusis hardly sufficient to meet external obligations infull. Besides, the value of German exports in Febru-ary dropped to a new low level. A matter of out-standing importance bearing on German financialaffairs was the resignation on Thursday of Dr. HansLuther as President of the Reichsbank and theappointment of former President Dr. HjalmarSchacht in his place. Dr. Schacht stabilized themark after inflation and became President of theReichsbank in 1923 and resigned in 1930 becausehe refused to assume the responsibility for the YoungPlan. This change has been expected for severalweeks past. Dr. Schacht has frequently asserted inrecent weeks that German private debts will not berepudiated and he characterized as idiotic "to believethat he who stabilized the mark will make for anotherinflation." The stability of the mark depends on afavorable balance of payments. Dr. Schacht islikely to turn his immediate attention to the foreigndebts, service upon which requires more than1,000,000,000 marks (approximately $238,000,000)annually. Of the two ways to reduce this item-negotiations for a reduction of interest, amortizationand service, or the declaration of a transfer mora-

Chronicle March 18 1933torium with the service amounts to be paid intoblocked mark accounts-Dr. Schacht is said to favorthe latter course. It is held certain that he will dosomething positive before the reserves of the Reichs-bank become completely exhausted. It is evenhinted that the mark may be devaluated with theexpectation that such a course may bring some ad-vantage to Germany in foreign trade.French francs have been exceptionally firm this

week, but trading in the New York market is largelynominal and the firmness is attributed largely toEuropean transactions. With the official opening ofthe market here on Monday French cable transfershad a range of from 3.923/2

to 3.95 5-16 (par of thefranc is 3.92). During the remainder of the week thequotation hovered around 3.9534, going as high onsome occasions as 3.95. It is not believed thatthese high rates can last as the statistical position isdefinitely in favor of American exchange. Besidesthe succession of events here, such as the improvedbanking situation, the improved outlook for govern-ment finances, the better tone of the securities mar-kets, the rise in commodity prices and the optimisticresponse of our people to President Roosevelt'smeasures should result in prompt improvement inEuropean sentiment regarding the dollar. The Bankof France continues to lose gold to England on theLondon Exchange Equalization account. The Bank'sstatement for the week ended March 10 shows a lossin gold holdings of 288,060,003 francs, mostly toEngland. Total gold holdings stand at 80,823,221,-259 francs. This compares with 76,157,288,503francs a, year ago and with 28,935,000,000 francs inJune 1928 when the franc was stabilized. TheBank's ratio stands at 76.78%, compared with77.33% on March 3, with 69.38% a year ago andwith legal requirement of 35%.The London check rate on Paris closed at 87.83

on Friday of this week, compared with 87.62 onThursday of last week and with 87.19 on Friday,March 3. In New York, sight bills on the Frenchcenter finished on Friday at 3.94, against 3.96M onFriday, March 3; cable transfers at 3.9434, against3.963/2, and commercial sight bills at 3.94, against3.943%. The following table gives closing quotationson Friday, March 17, compared with closing quota-tions on Friday, March 3:

March 17. March 3.

Bankers Stahl.

CableTransfers.

Bankers'Night.

CableTransfers.

Antwerp belgas 14.02 14.02% 14.105i 14.11Berlin marks 23.9034 23.91 23.87 23.8SItalian lire 5.151( 5.16 5.123.i 5.123..Austrian schillInips 14.1034 14.11 14.1034 14.11Czechoslovakia 3.00 3.0034 2.993 3.00Bucharest 0.80X 0.11034 0.6134 0.82Poland 11.24 11.2434 11.2434 11.25Finland 1.55 1.5534 1.5434 1.55Greece 0.5734 0.57% 0.5734 0.5734

EXCHANGE on the countries neutral during thewar is firm with respect to the dollar. Thefluctuations in the Scandinavian units followedthe movements of the pound sterling as has beentheir course ever since September 1931 when GreatBritain went off the gold standard. Holland guildersfluctuated rather widely during the week. With theopening of the market on Monday the guilder wasquoted nominally at 40.36, moved down to 40.33and toward the close shot up to 40.60. Par of theguilder is 40.20. Guilder cable transfers closed onMarch 3 at 40.60. The fluctuations in the unit thisweek ranged at from 40.28 to 40.60. But there werevery few transactions owing largely to lack of falai-


Volume 136 Financial Chronicle 1767arity on the part of New York traders with the newforeign exchange regulations. In a normal marketthe guilder should be ruling at this time close to paror under. Amsterdam dispatches on Wednesdaystated that the Nederlandsche Bank lost 61,000,000guilders of gold last week due to exports to Franceand Belgium. Pressure on the guilder which resultedin these gold transfers was due to sales in Englishquarters and guilder remittances in connectionwith a large amount of French and Belgium short-term treasury bills which were placed in the Dutchmarket some weeks ago. Swiss francs are especiallyfirm owing largely to European operations and theinflux of capital from many Continental points toSwitzerland for safety. When the market openedhere on Monday the Swiss franc was nominally quoted19.38-40. Toward the close there was a sharpadvance to 19.72 (par is 19.30). During the rest ofthe week the fluctuations ranged from 19.38 to 19.60.Spanish pesetas are firm. Peseta cables closed onMarch 3 at 8.44 and fluctuated here this week be-tween 8.41 and 8.52. The peseta follows the Frenchfranc. Transactions here were on a limited scale.The following table gives the closing foreign ex-

change quotations of the countries neutral duringthe war as of Friday, March 17, in comparison withthose of Friday, March 3:

March 17. March 3.

Bankers'Stahl.

CableTransfers.

Bankers'Sight.

CableTransfers.

Holland guilders 40.41 40.42 40.59 40.60Swiss franc 19.404 19.41 19.69 19.70Copenhagen krone 15.444 15.45 15.5434 15.55Sweden krona 18.344 18.35 18.5434 18.554NorW113, krona 17.744 17.75 17.84)4 17.85Spanish pesetas 8.49 8.494 8.434 8.44

EXCHANGE on the South American countries is,of course, considerably demoralized as a resultof the bank holiday here. However, these exchangeshave been only nominally quoted for a long time.Buenos Aires dispatches on Saturday stated that theArgentine Government shifted from the dollar to theFrench franc as a basis for exchange operations.After three days' suspension the Buenos Aires marketresumed dollar operations at the same artificiallyfixed rate ruling before the closing of the banks inthe United States. It was announced in financialcircles in Buenos Aires that the Government had thenecessary funds to meet obligations falling due inNew York on Monday, but that because of theuncertainty regarding the dollar position in the ex-change market some delay might result in makingpayment on New York loans amounting to $16,000,-000 and in renewal of a $10,000,000 short-term loan,the balance of $50,000,000 borrowed by the Irigoyenregime. It is understood that on Wednesday theArgentine Government paid 250,000 sterling bal-ances to Baring Bros. on a 5,000,000 loan. ALondon dispatch on Saturday last stated that acommittee of six leading British business men con-nected with the Anglo-Argentine trade has beenformed to devise a scheme to permit freeing ofBritish-owned funds belonging to British railroadand trading companies at present blocked by exchangerestrictions.

Argentine paper pesos closed on Friday nominallyat 25% for bankers' sight bills, against 25% on Fri-day, March 3. Cable transfers closed at 25.80,against 25.80. Brazilian milreis are nominallyquoted at 7.45 for bankers' sight bills and at 7.50for cable transfers, against 7.45 and 7.50 on March 3.

Chilean exchange is nominally quoted at 63/8, against63/s on March 3. Peru is nominally quoted at 17.00,compared with 17.50 on March 3.

EXCHANGE on the Far Eastern countries wasfirm when the market opened on Monday,March 13, in comparison with March 3. This wasin sympathy with the rise in the price of silver whichhad occurred in London during the interval. InNew York the price of silver was fixed on Mondayat 2734 cents per fine ounce for spot silver, whichcompares with 273. cents on March 3 and a highduring the holiday of 30 cents on March 8. OnMonday Hong Kong dollars advanced to 243/ from22.87 on March 3. Shanghai taels rose to 31 from29.50. Japanese yen advanced to 22 from 21.38The Indian rupee of course fluctuated with thepound, to which it is anchored.

Closing quotations for yen checks yesterday were22.00, compared with 21.00 on Friday, March 3.Hong Kong closed at 23%23 13-16, against 22%@22 15-16 on Friday, March 3; Shanghai at 303/8,against 293,'@295/8 on March 3; Manila at 49.75,against 49.70 on March 3; Singapore at 40.15, against39% on March 3; Bombay at 263/8, against 26.20 onMarch 3; Calcutta at 263/8, against 26.20 on March 3.

PURSUANT to the requirements of Section 522of the Tariff Act of 1922, the Federal ReserveBank is now certifying daily to the Secretary of theTreasury the buying rate for cable transfers in thedifferent countries of the world. We give below arecord for the week just passed:FOREIGN EXCHANGE RATES CERTIFIED BY FEDERAL RESERVE

BANKS TO TREASURY UNDER TARIFF ACT OF 1922.MARCH 11 1933 TO MARCH 171933, INCLUSIVE.

Country and MonetUnit.

Noon Buying Rate for Cable Transfers in New York.Value in United States Money.

Mar. 11. Mat. 13. Mar. 14. mar. 15. ..uar. to. mar. /7.

EUROPE- $ $ $ 8 2Austria, schilling .140350 .140160 .140040 .139940 .140120Belgium. belga .139600 .139895 .140366 .140238 .140161Bulgaria. ley .007300 .007233 .007200 .007200 .007200Czechoslovakia, krone .029662 .029658 .029762 .029811 .029783Denmark. krone .153200 .152800 .154415 .154238 .154166England, pound

sterling 3.404375 .4.437211 3.461208 3.461958 3.462500Finland. markka .015030 .014991 .015216 .015225 .015225France, franc .039242 .039383 .039515 .039524 .039421Germany, reichsmark .237750 .238208 .239842 .239257 .238689Greece, drachma .005637 .005550 .005714 .005755 .005666Holland, guilder .403022 .403133 .405083 .404585 .404146Hungary. Pengo .174500 .174500 .174500 .174500 .174633Italy, lira .051115 .051194 .051645 .051580 .051580Norway, krone .176133 .175872 .177458 .177233 .177262Poland, zloty .112000 .111975 .111810 .111810 .111810Portugal. escudo .031433 .031375 .031575 .031440 .031480Rumania, leu .005966 .005990 .005985 .005987 .005979Spain. peseta .083955 .084320 .085167 .085046 .084807Sweden. krona .181900 .181681 .183292 .183046 .183076Switzerland, franc .193688 .194120 .194757 .194453 .194032Yugoslavia, dinar BANK- .013675 .013500 .013662 .013700 .013633ASIA- LNG

China- HOLZ-Chefoo tad l DAY. .313750 .302083 .305833 .306875 .310000Hankow feel .309168 .298333 .301666 .302708 .306250Shanghai tact .300833 .290625 .293750 .295781 .298125Tientsin tact .319583 .307500 .311250 .312291 .315833Hong Kong dollar-- .235416 .227812 .230937 .231562 .231875Mexican dollar_ -.. .213333 .205937 .209062 .210312 .211875Tientsin or Poly

dollar .214583 .205833 .209166 .210000 .212916Yuan dollar .214166 .205416 .208750 .209583 .212500

India, rupee .255000 .256650 .259750 .259400 .259440Japan, yen .209375 .212625 .213750 .216500 .218425Singapore (B.S.) dollar .395000 .394375 .399375 .398125 .399375NORTH

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