New York, 26 September. The Associated Press reports from Washington that Treasury Secretary Morgenthau called in members of the press and told them that Gosbank is seeking to drive down the exchange rate of the pound sterling, but that he, Morgenthau, with the aid of the American monetary stabilization fund, had staved off any impact from the Gosbank actions by buying up the 1 million pounds sterling that the Soviet government had offered in the money markets “at any price.”

According to the Washington dispatch, Morgenthau then called in members of the press a second time and said that the US intervention had averted a decrease of the pound-sterling exchange rate as a result of the Gosbank moves. In Morgenthau's words, the United States intends to utilize all the resources of the stabilization fund to prevent sharp currency fluctuations.

The United Press reports from Washington: "Experts say the Gosbank's actions could have killed the hopes of establishing international currency equilibrium if the United States had not intervened. At a time when the New York Stock Exchange is calm, as was the case today, and the London and Paris exchanges are closed, pounds thrown onto the market by the Soviet Union could have caused a significant decrease in the pound's exchange rate."

The Pound's Exchange Rate Drops in the US

According to the United Press, US Treasury Secretary Morgenthau told members of the press: “My investigation has shown that the USSR Gosbank issued an order to sell 1 million pounds at any price. When I learned of this, I bought the 1 million pounds. I used our stabilization fund to buy what they wanted to sell. The USSR Gosbank used the pounds to drive down their exchange rate. This is the only instance to date in which any government, bank or private individual attempted to artificially influence the foreign currency market in the United States. I sincerely hope that this incident will not happen again.” ” According to the agency, when Morgenthau was asked how the Soviet government had hoped to benefit from this sale, he replied: “You should ask the Soviet government that.” The agency went on to say that Morgenthau had called the attention of the members of the press to yesterday's statement by the Treasury Department, which says that the United States, Britain, and France invited other countries to cooperate and expressed the hope that the other countries would not make attempts to achieve “abnormal competitive and foreign-currency gains and thereby impede efforts to restore more stable economic relations.” According to the agency, as Morgenthau read this quotation, he put particular emphasis on the words “cooperate,” “abnormal,” and “impede.”

Morgenthau's statement about the USSR Gosbank, the agency goes on to state, “is considered unprecedented in the history of the American Treasury Department. Morgenthau asked the correspondents to transmit their dispatches as soon as possible before the stock exchange closed.”

Morgenthau's statements, in which he accuses the Soviet government of acting counter to the “gentlemen's agreement” among the United States, Britain, and France and depicts the United States as the savior of British currency from attacks by the Soviet Union, was presented in the Scripps-Howard press under the headline “Soviet Union Attacks the Dollar and Pound,” which is what Morgenthau was seeking. Morgenthau stated that the USSR Gosbank sold 1 million pounds in New York because the London and Paris stock exchanges were closed. Morgenthau hastily held two special conversations with members of the press in order to make them act against the Soviet Union.