"Hoover Plan Assures Europe That United States Will Keep Full Market, Gold Payments," Says Professor J. F. Ebersole

"One of the most interesting phases of the Hoover Plan for mobilizing credit is the effect upon our relations with Europe," said J. F. Ebersole, professor of Finance, at an interview yesterday. "The mere announcement of the plan should convince European banks and investors that the United States is determined to maintain the gold standard in its present form.

"The average European should be impressed by the President's assertion that, if necessary, the financial power of our Federal Government will be used through a new Federal corporation similar to the War Finance Corporation to accomplish the desired result. Europeans are accustomed to calling upon and using their governments in times of emergency. It may be that anything less than such a promise to use our government's financial power would be sufficient to influence European opinion.

"To maintain our gold standard in its present form means simply that we shall maintain an open and free market for the sale here by Europeans of any listed or unlisted securities which they desire to sell at existing prices, and that Europeans are free to ask to have the proceeds shipped in the form of gold coin or bullion.

"Europeans apparently have been making liberal use during the past few weeks of this opportunity to liquidate their American securities in exchange for gold. To continue upon this basis will be mutually advantageous to Europe and the United States. To know that gold can be obtained for American securities is of considerable value to Europeans, and as long as they are sure that they can continue to do so they will not exercise the privilege more than is absolutely necessary. It is of considerable benefit to the United States to maintain this situation, because it establishes New York City as one of the most important financing centers of the world, and, viewing the matter even more selfishly, it enables the American public to repatriate American securities at a rather low price level.

"The Hoover plan provides relief for the temporary embarrassment to American banks from falling prices of securities during this period of European liquidation. The European liquidation has been due in large part to the drop in the price of sterling, because a sale of securities for American dollars will produce a larger number of pounds sterling for the European seller than heretofore. It may be, however, that our market prices have discounted this situation rather fully so that liquidation on the part of Europe may continue at an orderly rate, while the European sales are being absorbed by purchasers in America.