Dollars Attacked

When the pound sterling went off gold (TIME, Sept. 28), burly, beer-bibbing Viscount Rothermere had a GREAT IDEA. He started no insidious whispering campaign to shake world confidence in the U. S. dollar and force it off gold, for Viscount Rothermere is blatant, blunt. Mornings his GREAT IDEA was shrieked by his Daily Mail (circulation 1,872,418: world's largest). Evenings his Britainwide chain of provincial papers did not hint but yelled that the dollar is unsafe. In Rothermere papers the financial page, the featured news page and the editorial page all carried staccato attacks on the dollar last week, hammered and re-hammered day after day. Typical Rothermere scarelines:

BRING YOUR MONEY BACK TO BRITAIN

"Advices from America indicate a serious state of affairs. . . . This therefore appears a favorable moment to sett dollar securities and bring back the money to this country. ... In existing world conditions, this is the safest place for the Englishman to keep his money."

Next day:

SELL DOLLAR AND FRANC SECURITIES

"Don't be trapped. Bring back your money now. . . . When the break on Wall Street comes the reaction may be far-reaching."

Next day:

WILL GERMANY ABANDON GOLD BASIS?

"Who will be left on the gold standard? . . . Rumors are rife in the city and banks and foreign exchange dealers are being bombarded with questions regarding this country and that. . . . Those with money abroad should . . . bring it home before it is too late. . . . Do it now."

Next day:

STERLING RALLIES AFTER EARLY FALL

"The recovery was attributed to American selling of dollars."

Next day:

MORE FOREIGN BANKING TROUBLES

BRING BACK YOUR MONEY

"We are fortunate in our big banks. The rest of the world must envy us, particularly Americans."

Next day:

OUR TREASURY BONDS ARE ATTRACTIVE

"Who will go off the gold standard next? . . . The American banking position shows no sign of improvement. . . . Bring back your money. No matter where it is, it is safer at home."

"Sound British Hearts." There being only 42,000,000 people in all Great Britain, Rothermere mass suggestion at the rate of 5,000,000 papers daily could not fail to have some effect. London-New York cables were busier than usual. Many a British investor sold his U. S. securities last week, received U. S. gold-secured dollars and exchanged these into paper pounds sterling "which are based," the Daily Mail explained, on "more than gold bars," namely "on the sound hearts of the British."

In Britain, many a moneyed U. S. visitor reads the sizzling Rothermere Daily Mail out of sheer incapacity to read the King's English in the tranquil London Times. Neither the Times (Independent), the Daily Herald (Laborite) the Star (Liberal) nor the Morning Post (Conservative) attacked or aspersed the U. S. dollar last week. But from London many a U. S. visitor cabled anxious questions to his U. S. broker, banker or friends. In Washington these questions were answered officially. Asked to comment on rumors that the U. S. might abandon the gold standard, Treasury officials said: "Ridiculous!," indicated that the U. S. holds 44% of the world's monetary gold.

Grotesque Fact. The only actual run-on-the-dollar was not by Britons last week but by Poles.

Poles have lived and suffered through two tragic inflation periods: that of the old Polish mark in 1923 and that of the new Polish zloty in 1925, the zloty being later stabilized (1927). Poles, deeming dollars the world's safest currency, have bought, and they held last week, some $50,000,000 in safety deposit boxes, socks, tin boxes and stuffed into mattresses. But Poles are excitable. When first repercussions of the Rothermere anti-dollar campaign reached Poland last week, the Pole-in-the-street panicked.

Abruptly Warsaw banks were mobbed by widows, orphans and thrifty Poles generally, all brandishing dollars. What they wanted was something safer. What is safer? Forgetful that the zloty had crashed six years ago, the dollar-brandishers begged the banks to sell them zlotys.

Polish bankers saw that Opportunity had knocked, welcomed the panic, took in dollars and poured out zlotys with alacrity, pocketing the usual exchange commission. Soon they could even charge a premium for zloty, charged it. For $1 the banks paid at first 8.90 zlotys. later only 8.82.

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