INTERNATIONAL: Pressure on Gold

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Bedrock facts beneath the billows of press pother last week about the Gold Standard:

France. As to the flight of capital from France provoked by the fall of Premier Doumergue's "Truce Cabinet," the Bank of France was seen last week to have lost gold worth 360 million francs, or less than one-half per cent of its reserves of over 82 billions.

Thus pressure on the franc last week was "psychological, not actual," in the opinion of foreign exchange experts. They pointed to the success of new Premier Flandin in winning huge votes of confidence from Chamber and Senate on a program of rock-ribbed gold standardism (seep. 21). The gold cover behind French currency stood at over 80%. Even so, psychological pressure was great. After-effects of the French crisis fortnight ago kept the currencies of four gold bloc countries (France, Belgium, Netherlands, Switzerland) fractionally below the gold export point all week. President Roosevelt, by relaxing completely the lax treasury restrictions on export of U. S. capital, convinced Europeans that the U. S. is now a better place to which to send their money than heretofore.

Belgium. Tall, curly-haired young King Leopold III faced the first grave crisis of his reign last week when the Catholic-Liberal Coalition Cabinet of patrician old Premier Count Charles de Broqueville was upset by that fiery anti-inflationist and anti-devaluationist Finance Minister Gustave Sap.

Since both the Catholic and Liberal parties have pledged themselves to maintain the belga on gold, Dr. Sap should have been popular among his colleagues. He balanced the budget last month, and, with Foreign Minister Henri Jaspar, rallied all the gold bloc countries to stand together at the Brussels Conference (TIME, Oct. 29). In the end, however, Dr. Sap's economies, imposed on each and every Minister, made him the Cabinet's Simon Legree. When, having already cut civil servants' salaries 24%, Dr. Sap insisted last week that he must cut them 5% more, the Cabinet resigned amid rumors that "the Ministers were divided between the wisdom of inflation or further deflation."

Promptly His Majesty asked Gold-Standardist Henri Jaspar to form a Cabinet. M. Jaspar at once tried to get as Finance Minister Belgium's squat old Copper King and No. 1 banker, M. Emile Francqui, stabilizer of the Belgian franc in 1926. Before the Cabinet slate was announced last week, Brussels proletarians heard that it would contain a director of the Liége National Arms Factory, began murmuring against "The Gun Makers' Cabinet."

Even a king as young as Leopold III could not miss that cue. Next day the mob was saying that His Majesty had sent M. Jaspar packing and M. Jaspar was saying that he had voluntarily returned the royal mandate because he could not get M. Francqui into his Cabinet.

Over the week-end King Leopold sent for choleric Colonel Georges ("Red Head"*) Theunis, negotiator of Belgium's debt settlement with the U. S. in 1925. Now a ranking Belgian elder statesman, former Premier Theunis emerged from retirement with reluctance. "The task is not simple," said he, "but I will do my best." His best, completed after three days, included M. Francqui as Minister Without Portfolio.

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