STRUCTURE FOR CREDIT

Evening Post, Volume CX, Issue 140, 11 December 1930, Page 9

STRUCTURE FOR CREDIT

HOPES OF A NEW SCHEME

AMERICA'S HOLDING

(British Official Wireless.) RUGBY, 9th December. Considerable attention is being paid in "business circles, both in London and New York, to the hope expressed by the president of the Board of Trade, Mr. William Graham, that American and British financial authorities will be able to arrive at an agreement as to the use of gold reserves, which will provide, on a sound basi6, a great credit structure, and so minister to common recovery. "That necessarily depends on the central banks," says Mr. Graham, "but the British Government is alive to the difficulties of the situation." The city editor of "The Times" discourages the view that an event of importance is impending, and although rumours were current in New York yesterday, the Federal Reserve Board remained silent. WHAT NEW YORK THINKS. New York bankex-s are reported as having declared that they saw no hope of any distribution of gold through the capital market until the political conditions of Europe are more stable. "The Times" points out that America holds about one-half the world's gold stock, acquired in a perfectly legitimate way. "This will not bo reduced unless her trade balance becomes an adverse one, which would compel her to export gold for payment, or if she embarks upon an active foreign, lending policy which would give borrowers the right to draw gold from America," says "The Times." America has in part largely increased her foreign lendings this year compared with last year, but this has made very little difference to he<r gold stock, which is nearly £30,000,000 higher than it was a year ago. She has lont relatively little to Europe, probably because there is a dearth of really good borrowers. BRITAIN'S TJNWISE LENDING. "Britain, being more adventurous in foreign finance, and having more vested interests concerned in lending money abroad, has been careful, but much of her lending has proved unwise. Prance and not America has been the principal taker of gold in the world market since the spring of 1927, and she has ample gold reserves with which to undertake a large foreign business if she desired. But American finance does not feel the necessary confidence in foreign borrowers."