21 JANUARY 1938, Page 40


TAB French' Government crisis has overshadowed markets without depressing them. Steadiness on the Stock Exchange has continued : the rising trend of commodity prices, after two day interruption at the end of last week, was quickly resumed. This is doubtless partly a sign that London is now thoroughly hardened to French political difficulties. It is also a sign that those French operators who wished to adjust their position, for instance by a sale of francs and purchase of commodities or sterling securities, had mostly taken action a few days in advance of the fall of the Popular Front Government.

During the days when exchange dealings in France were suspended it was always possible to evade the restriction by dealing in London, but advantage was not taken of that loophole on a very large scale. Thus, although the fluctua- tions in the French franc were wide, ihe volume of business was not large enough to frustrate the controlling operations of the various exchange funds. There was also a steady volume of " bear covering " to be done in the exchange market, as is shown by the fact that as much as I1 francs was given away for the privilege of borrowing francs for one day.