Skids for Montagu Norman?

Through U.S. financial circles last week a rumor whispered that arch-conservative Montagu Norman was finally being eased out of the governorship of the Bank of England which he has held for 21 years. Reported reasons: 1) his close associations with England's appeasement group; 2) his unwillingness to subordinate finance-as-usual to war effort.

Norman will reach the age limit (70) for Bank of England directors next October. Heretofore London's City had assumed that the limit would be extended for his benefit. Last week this was no longer a good bet. The failure of Britain's early war effort was followed by purges in Army and industry; perhaps a financial purge was next.

The Economist stated recently that "the task of finance in war is to see that nothing is decided on financial grounds." With such sentiments Norman has no sympathy. He opposed the British Treasury's cheap money policy, objected even to wartime exchange controls.

Motto of the Bank of England has always been: "Never explain. Never apologize." To newspaper criticisms of the Bank Norman once said merely: "The dogs bark but the caravan passes on." But in wartime England such hauteur no longer suffices. After Picture Post featured an article last spring demanding that Norman retire, he appointed the Bank's first press-relations officer in history.

If Norman goes, the move may have important effect on liquidation of British assets in the U.S., may finally resolve the behind-scenes Washington fight between Secretary of the Treasury Henry Morgenthau Jr. and Federal Loan Administrator Jesse Jones. Morgenthau has insisted that all British holdings be sold to help pay for U.S. aid-to-Britain. T. J. Carlyle Gifford, sent here by the British Treasury to liquidate listed securities, has done his best to comply. But Sir Edward Peacock, a Norman man sent here to dispose of British investments in privately owned U.S. corporations, has enlisted Jesse Jones's aid. Along with Sir Frederick Phillips, Under Secretary of the British Treasury, Sir Edward arranged the deal in which Jones lent British-American Tobacco Co. $40,000,000 on its U.S. subsidiary (Brown & Williamson), thus averted outright sale. If the Norman-Peacock-Phillips axis is broken, Secretary Morgenthau may still win his fight with Jones.

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