The Minneapolis journal. [volume] (Minneapolis, Minn.) 1888-1939, 1906-10-20
BANK OF ENGLAND
STRIKES At SHAW
Advance of Discount Rate Re-
garded as Blow at U. S.
Treasury Policy.
journal Special Service.

journal Special service.
New York, Oct. TO- What is be-
lieved to be great struggle Of inter
national extent, involving the Bank Of
England and the National City bank
here, was brought to the surface when
the Bank Of England convulsed the
money markets of the world by unex-
pectedly advancing the minimum dis
count rate to 6 per cent. Incidentally,
the treasury department of the United
States is drawn into the clash, if the
Interpretation which Wall street placed
on the surprising action of the English
bank is correct.
In brief, the Bank of England made a
remarkably high bid for money and
gold supplies which the National City
bank and other smaller institutions
were obtaining in the four quarters Of
the globe by reason of Secretary Shaw e
device to assist gold imports thru free
treasury advances. ..'. ..-.+
Temporized at First.
The great English institution at first
temporized over the diversion of. gold
from London to this market, but later
showed it's extensive power by ad.
vancing it's discount rate to and later
to per cent. By this bidding for gold
supplies it vigorously combatted the
American demand, but last week the
tide of victory flowed again in favor
Of the American market, and the Ma.
tional City bank was again preparing
tied supply of money in the British
| market. =,
For weeks the British lion was meta.
phorically showing it's teeth by stead
| lily advancing it's discount rate to high
er figures, attempting to compel the
| flow Of capital, to that market to re.
plenish its supplies. Yesterday the
| lion roared and the noise was heard
| around the world.
Rebuff for Shaw.
The action of the Bank of England
| is regarded by international bankers
as a direct rebuff to the treasury policy
| of Secretary Shaw and defiance OF
the National City bank and the othel
| large importing banks of Wall street
| which have been able to search the
| principal markets Of the world for the
free gold. "
Feeling of Relief.
London, Oct. 20.-After the surprise
caused in financial circles yesterday by
the exceptional increase in the Banl
of ENGLAND s rate Of discount, feel
ing of great relief and confidence was
manifest today, as it was believed thai
the per cent rate will prevent the ex
port Of further gold. Nevertheless thu
stock market this morning continued tt
show much nervousness, but there wa
an absence Of the feverish excitement
which followed the first announcement
| of the increased rate. American securi
! ties continued their downward move
ment. the opening prices being II
marked contrast to those of the open
ing yesterday.
Fnancier Talks.
Banking circles showed notable salts
| faction at the fact that the Bank O.
ENGLAND had been able to stop the con
tinued heavy exports Of gold to tn
United States. A British fnancier dis
cussing the situation, said today: eth
United States can hardly expect Lon
don to finance the whole world and W
are now confident that our 6 per cen
rate is, a. safe protection agalns
further inroads on our stock OF gold
Therefore, if the United States contin
ues to require gold for the movemen
of the cotton crops or other needs, "
feel that relief should come from tn
other side. Secretary Shaw once befor
relieved the situation by releasin
funds, and we in London cannot Sc
why he should sit on his gold chest
while the United States draws it's need
ed supply from London's deplete
Istocks.'A