Moneyed International

Thwarted somewhat mysteriously in Manhattan banking circles, Montagu Collet Norman returned last week to London. On the day after he landed he broke his own phenomenal record as Governor of the Bank of England, was re-elected for the eleventh consecutive year. Seemingly "The City" teemed with friends of Mr. Norman--or were they friends? A bit too suddenly, great close-mouthed British bankers began to talk--"off the record" of course--about what a splendid thing Governor Norman had tried to arrange among the Yankees and how, although thwarted, he may yet do it.

$500,000,000, As was to be expected, Governor Eugene Meyer of the U. S. Federal Reserve Board covered Mr. Norman's exposed rear with a broad statement.

"There is no secret, there is no mystery connected with his conferences [in the U. S.]," said Mr. Meyer. "No understandings resulted from them, and the lack of information was simply due to the fact that there was nothing of general interest or importance to disclose."

But British bankers, then French and lastly bankers close to the B. I. S. (Bank for International Settlements at Basle, Switzerland) insisted that Governor Norman had discussed with Governor Meyer and Secretary Mellon the following:

1) Stimulation of sales to South America and Eastern Europe by making available to these regions a credit totaling eventually $500,000,000--five times the authorized capital of the B. I. S.

2) This stupendous credit to be mobilized by creating and selling to the world public the bonds of a so-called "International Corporation," about $25,000,000 to be subscribed at once by the B. I. S. and large sums by central banks of the U. S., France, England, Germany, Italy, Sweden, the Netherlands, Switzerland and others. (The London Daily Mail heard with alarm last week that one of the "others" was to have been the State Bank of the Union of Socialist Soviet Republics.)

3) The "International Corporation" to retail its wholesale credit to countries in South America and Eastern Europe, the inference being that they would be allowed to borrow at cheaper rates than those at which they could hire the money independently, thus would borrow more, buy more, quickening the revival of world trade.

Today, for example, interest is in arrears on all Bolivian Government dollar bonds on Manhattan Exchange. The public will not soon buy more Brazilian bonds unless offered very high interest, perhaps not then. But if the public loaned $500,000,000 at moderate interest to a credit pool, if this pool let Brazil hire a few more millions relatively cheap, the public, having confidence in the pool, would not complain.

Mr. Norman's Prospects. It was said last week that U. S. and French central bankers have cold-shouldered Governor Norman because:

1) While proposing that the U. S. and France should supply a lion's share of capital for his International Corporation, Mr. Norman demanded that the Bank of England, although contributing less, should have an equal vote.

2) The countries Mr. Norman proposed to aid with credit are primarily those on which British capital has already laid high stakes.

Nevertheless something must be done to revive trade. What? If Montagu Collet Norman decides that his fellow central bankers will not support him, he may turn to the titans of industry--to men like Owen D. Young.

This turn, it was rumored in The City, Governor Norman is now trying to make. After all, General Electric and other world-wide industrial concerns would be the primary and direct beneficiaries of stimulated buying. Conceivably the "International Corporation" of Governor Norman's dreams can be started, given impetus by a consortium of corporate interests. His first scheme, that of enlisting the central banks, was merely more grandiose, would have been quicker and easier to put over if Messrs. Mellon and Meyer had liked the idea.

In official Washington, efforts to make it seem that nothing much had really been discussed produced this odd, unflattering theory of Governor Norman's visit: "He just wanted to have a close look at Governor Meyer whom he had never met. He just wanted to get a personal slant." Newly appointed as such officials go, Mr. Meyer became Governor of the Federal Reserve Board seven months ago.

After putting his ear to the fiscal ground in Berlin, Correspondent Guido Enderis of the New York Times reported German uneasiness at Mr. Norman's intentions:

"The lavishness with which credits are once more being scattered--on paper-- around the world these days suggests to some observers here that something more than a new financial institution or banking syndicate is required to carry out such operations, and it is declared that this is not the first time that the 'moneyed international' has come forward with such illusions."

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