Slide

In July and August 1931, so many people sold pounds sterling and bought francs or dollars, so few did the reverse, that a flood of gold left England. To keep the Bank of England from being squeezed completely dry, Britain stopped gold payments, let the pound slide. Later the Government created an equalization fund of -L-150,000,000 (increased last May to -L-350,000,000), which was used by the Bank of England as the Government's agent to buy sterling when others sold, sell when others bought--keep the pound from fluctuating. By this means during the last few months while the dollar tobogganed, England kept the pound steady at 85 francs.

Last week pressure once more hit the pound. Bear speculators on the Continent, tasting blood from their successful mauling of the dollar, turned once more to sterling. The pound gradually receded from 85 francs to 83 3/4 with the stanch British bolstering it every time it dropped a sou. Then came a day when the pound dropped and the British sold francs, again and again, 10,000,000 at a time--and still the pound dropped. In two days trading the pound fell two more francs to 81 3/4.

No official announcement was made but London and Paris knew that the Equalization Fund, meeting something too big for it to handle, had stepped aside to let the pound again "seek its natural level." What that might be none knew, but at 81 3/4 francs the pound was only 1 1/4 francs above its all-time low. This week fox-bearded Governor Montagu Norman of the Bank of England, having pleasantly enjoyed himself at Bar Harbor, Me., was to have an interview with President Roosevelt at the suggestion of Governor George Harrison of the Federal Reserve Bank of New York. Britons wondered, like Americans, exactly where their currency was headed, saw their pound for the first time this year falling faster than the dollar.

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