r S WALL WALL WA By L James Jmes L STREET SIR McMullin E Financial ET Observer V I OJ DID iii J. J NEW YORK YORK The The paeans of of official Thanksgiving from Washington Washington Washington Wash Wash- ington and London about the new Anglo American and American- American Canadian trade treaties ring a trifle hollow to financial insiders The agreements dont don't mean much unless something is done to stabilize stabilize stabilize sta sta- the international currency situation The negotiators were obviously aware of this as the treaties contain almost unnoticed hedge clauses providing for their cancellation if currency fluctuation fluctuation fluctuation tends to defeat their pur pur- pose That provision may turn turnout turnout turnout out to be more important than is ls generally suspected The latest devaluation of the French franc which attracted very little attention in this country country country coun coun- try carries reaching far Along with a number of other measures the government government government gov gov- promulgated a decree re revaluing revaluing revaluing re- re valuing the franc at the lowest level in terms of gold that is possible possible possible pos pos- sible under existing laws The most significant angle was the simultaneous fixing of the franc at to the dollar and to the pound sterling These two figures dont don't jibe The first would make the franc worth cents the second works out at cents The Th discrepancy conveys conveys conveys con con- veys a definite inference that the pound will continue to decline in terms of the dollar from the present pres pres- ent figure around to At that point the thc two quotations for the franc would be in balance This would be just dandy from London's viewpoint Britain has lately had an adverse trade balance bal bal- ance ance-a ance a heavy excess of imports over exports exports and and is anxious to increase her exports The simplest simplest sim sim- pleat way to do this would be by cheapening the pound That would stimulate English sales to the United States and cut down American American Amer Amer- ican lean sales to England It would also enable Britain to undersell us more easily in competitive foreign foreign foreign for for- eign markets But such a change in the dollar- dollar pound relation would hurt our export trade in proportion as it helped Our government government government govern govern- ment doesn't relish the prospect at all There was some talk in informed circles that the trade treaties might be held up until an understanding was reached on the rate of currency exchange E Evidently v i ide d e n t I y however Roosevelt and Hull decided that the gesture of Anglo-American Anglo cooperation cooperation cooperation co co- co- co operation was worth making now for for Hitler's benefit regardless benefit regardless of other considerations But its it's a cinch that backstage negotiations negotiations negotiations for currency stabilization on terms satisfactory to the United United United Unit Unit- ed States will be pressed The much much advertised advertised three- three power stabilization agreement is practically a dead letter We have I kept the dollar pegged to gold goldat at a fixed price while the pound and franc have drifted steadily downward As forecast in this column United corporation has announced that it will convert itself from 11 utility super holding company int Pu Puan O an investment trust by enough shares of other J utility y J terns to reduce its equity int is Inter in them to o less than 10 per c r ce cen The giant Morgan company also states slates Its intention lt of entering the security un under writing business using the ro of the sale of utility stoc th thas as capital The move fi i with the securities and lIen commissions commission's idea that i ing and distributing b Jpe done by concerns which do to not o g also act as brokers for I Investment bankers however a do not exactly welcome the inva inval E sion of their domain by such such such- he formidable new competitor q The claim the field is already over crowded especially 3 since nce so nta many isair corporations have developed t th the i l habit of selling securities privately private private- tu ly and directly to a few w insurance companies instead of oft offering rin ii them to the public It is possible possible- that competitive pressure may ina ipP force some houses that handle hand tC c both investment banking an ant 1 brokerage business to give u up th th 11 former and stick to the tho latter fCc f J. J W. W Seligman has bas already done so The S E Cs C's goal of g. g would thus be achieved without the agency having to taki tab action Itself Insiders say this c cis is why it was glad to encourage United's plan 5 f Informed New Yorkers un under understand I stand that a torrent of opposition tion has compelled n 0 Wright Patman to modify his bi bill to tax interstate chain stores cu out J of existence before it was eves even introduced 1 Word is that the revised version 1 will continue the present tax 01 on stores already established an and h Ei slap a prohibitive levy on units j iI that might be added in future f This would effectively prevent the further expansion of chains bu but ut Do leave them otherwise In status statu if quo I y Patman may be figuring on the gradual diminution of chair chain s f through natural causes A. A P. P has closed more than stores store I in the last three years 1 ri The Bank of China recen recent obtained a loan from a big Nev York bank on silver to be shipped from Shanghai to New York To r t i. simplify matters the American bank took title to the metal in Shanghai and loaded it on ona a a 4 l homeward-bound homeward American ship i iThen Then the Japanese got wise wise wise-f i and refused to give the vessel the necessary clearance papers from 4 Shanghai until every bar of silver J was unloaded again under the eye of Japanese guards The lending bank is stuck stuck-a j least temporarily You can bi bl your buttons it will make no more loans on Chinese collateral unless said collateral is already on the US high seas en route to the United States Copyright 1938 for The