To No. 39 West 53rd St., Manhattan, home of Dr. Herman B. Baruch, came one night last week a Committee.* Its six members sat on mahogany chairs around a mahogany table in the large, highceilinged dining room on the second floor, rear. On the cream-colored walls hung portraits of Mrs. Baruch, of Miss Marina Baruch. Over the fireplace a medieval saint, done in bas relief, gazed down upon the company with a disinterestedness born of its 500 to 1,000 years of existence. From early in the evening to early in the morning the Committee sat. Many a telephone call was put through to Palm Beach. Eventually it became the fortune of two members to take a long trip across a great water, there to cross the path of an elderly Britisher of German origin.
Reason for the Committee’s meeting was the decision made recently by British General Electric Co., Ltd. (a company independent of and distinct from U.S. General Electric) to exclude foreigners from an issue of 1,600,000 new shares of British General Electric stock. Inasmuch as about 60% of British General Electric stock already outstanding is in U.S. hands, the anti-foreign restriction affected chiefly U.S. interests. It amounted to a proclamation that no U.S. dollars need apply to British industry. Protest was immediate. British papers joined with U.S. in terming British General Electric’s discrimination a “blunder,” in criticizing Sir Hugo Hirst, Munich-born Managing Director of British G.E. Perturbed, Sir Hugo postponed his issue, gave U.S. shareholders the opportunity to organize in the Committee that met at the Baruch home. On the Aquitania last week sailed Committeeman Herbert Bayard Swope and Thomas Lincoln Chadbourne. They are to confer with Sir Hugo on the obviously difficult problem arising from the fact that a dollar knows no frontiers.
Familiar to the U.S. public is redhaired, croquet-playing Herbert Bayard Swope, who last October (TIME, Nov. 5) resigned as executive editor of the New York World because he “didn’t want to stay a hired man too long.”* Less familiar, perhaps, is Thomas Lincoln Chadbourne, senior partner in the Manhattan law firm of Chadbourne, Stanchfield & Levy. Mr. Chadbourne spends most of his time in the South and abroad−he it was whom the Committee was calling at Palm Beach. He seldom shows his six feet six inches of portly well-to-do-ness around his New York offices, and whenever his cane (from which he is inseparable) appears, it is a sign of some momentous occurrence. When the meetings with Sir Hugo are concluded, Mr. Chadbourne may perhaps journey to Marseilles where lies the Jezebel, his 175-foot yacht, with its crew of 30. Or possibly he will inspect his recently purchased French chateau, where he plans to spend the summer with his family.
Important to U.S. holders and prospective purchasers of British G.E. stock is the exclusion of foreigners from the new issue; even more important is the incident from the standpoint of its setting a precedent. Said Dr. Baruch last week: “There are 20 billion pounds of English securities owned by Americans.” Should Sir Hugo’s program be allowed to pass with out protest, all U.S. capital invested in British industry would be jeopardized.
The real question at issue is whether the British market is opened or closed, whether London, once unquestionably the financial capital of the world, will accept a position of admitted provincialism. It is indeed a post-War universe in which the pound needs protection from the dollar.
* Committee members were: Dr. Herman B. Baruch, not to be confused with his brother Bernard; Herbert Bayard Swope; Harry W. Croft (Board Chairman of Harbison-Walker Refractories Co., director of Mack Trucks, Inc., Republic Iron & Steel Co., Mellon National Bank; Major Latham R. Reed (partner in E.A. Pierce & Co., brokers, and director of Venezuelan Petroleum Co. and Pantepec Oil Co. of Venezuela); Dewees W. Dilworth (partner in E. F. Hutton & Co., brokers, and director in Madison Square Garden Corp.); and Thomas Lincoln Chadbourne. Mr. Chadbourne, absent, was represented by a member of his law firm.
* He is not likely to be confused with his brother Gerard, president of U.S. General Electric Co., which, in turn, should not be confused with British General Electric Co., Ltd.
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