The daily morning journal and courier., 1895-05-14
STERLING EXCHANGE MARKET.


 1 Continuation of the Violent Break in Rates l Change from Long Prevailing Con ditiOns.
 ] New York, May 13.-The sterling eX- change market touched it's lowest level of the year this morning, when posted rates were agin reduced by the lead ing bankers to 4,S61k for sixty day rates and 4.s71s for demand. This represents a, decline of two cents per pound ster- l ling within a week. Actual demand bills, at this mornings quoted price of l 4,86A, were 21s cents below the price at the opening of May. At the close of last week sales of sight sterling bills were made at 4.86-65, rate which brought the balance for the first time in long period in favor of this coun- try. In to-day's later trading heavy sales of securities for London account caused sellers of exchange to hold off for better terms, and the demand rate moved up to 487. There was not much business at this figure, and the course of the market during the rest of the week is believed to depend wholly on the foreign transactions in the stock market. Should the heavy buying movement that developed last week be resumed a sharp fall in exchange is expected.
 Since 1890 the sterling exchange market has been thrown into a thor oughly abnormal condition by the con- tinuous and enormous foreign sales of American securities. In ordinary years, several millions in gold wer formerly exported in the winter and early sping months, when posted rates of foreign exchange would rule at or above 4.S91s for sight bills. The crop movement would check and finally reverse these prices, and by the early fall months posted sight bills would fall from ASA or lower, and gold would come this way from Europe.
 Even during the Earring panic" in the winter of 1890 the United States re- ceived gold from London, the posted rate ruling in December of that year at ASA. With 1891, however, began the heavy sales of securities to us from Europe, based largely on the distress in London, but probably still more on the silver purchase act of 1890 whose evil effects on trade and finance became
 
 ing year. Such was the sudden rise of exchange, aginst the foreign sales of our securities, that in the first half of 1891 no less than $79,000,000 gold was sent abroad. By August the extraor- dinary harvest conditions of that year developed. The wheat crop, which | failed in Europe, was in this country 1 the largest ever harvested. This so far | ordinary conditions that In the | last four months of the year $45, ,0O0 900 ] gold returned to us.
 In 1892 the sale of our securities were l Gold was imported ($17,000,- 1 )00) in the early months, while the huge II wheat exports were still going forward; put this presently ceased. Exchange rose to the gold exporting point, and l lid not fall again, and S76,5O0 900 gold went out before the years close. By he opening of 1893 the condition of he treasury had caused acute alarm. rhe run" on the gold reserve began It the close of 1892. Enormous with ]rawals of foreign capital held demand | exchange between 489 and 490h, and ,79, 700, 900 gold was shipped Tn June, tt the acute crisis of the panic, gold vent to a premium, along with all ,ther kinds of money, SIP, 700, 900 was inn ported, practically bought in Europe md imported irrespective of exchange ates. This was a temporary relief Demand sterling rose early in 1894 to 90, and yielded only occasionally the year. Tn all, $S1, 200, ,OOO vas shipped This movement contin- led through January of 1895. In the pecie payment crisis of that month 3O, 100000 gold was shipped, with de- nand sterling the highest recorded ates. How this violent movement was hecked through the administration ontract with the bond syndicate, and , ow, after the sterling market had ( cen held below the gold shipment oint for nearly three months, it final ( 7 broke last week on the renewed Ii luropean demand for our securities, C re matters ofsTecent history. I