Evening star. [volume] (Washington, D.C.) 1854-1972, 1906-10-19
TO PROTECT HER GOLD
Bank of England Suddenly
Raises Discount Rate.
PRICES DECLINE SHARPLY
Not Since Earring Failure Has Rate
Touched 6 Per Cent.
NO ALARM FELT IN NEW YORK
Today's Action Induced by Large
Foreign Drain on Her
Stock Of Bullion.
NO ALARM FELT IN NEW YORK

LONDON. October 19.-The Bank of Eng
this morning. Changes in the discount rate
of the bank of any day except Thursdays
have been few and far between, and not
since November = 1890, just before the
Barring failure. has the rate been put to 6
per cent. The relapse in American ex-
change. indicating renewal Of the de-
mands for gold, and the probability of
large Withdrawals of the metal for Egypt
! seemed to have contributed to the action
taken by the Bank of England today.
The increase in the discount rate was a
complete surprise to the members of the
stock exchange Prices gave way sharply
and at o'clock consuls showed fur
ther loss of Is, being quoted at S59s at that
hour. Other g.lt-edged securities declined
| in sympathy.
The American section continued to feel
the depress on and late losses ranged from
" to IA.
International Drains.
The sum of $1,000, 600 in gold leaving the
bank today is believed to be destined for
Egypt while financial circles anticipate
very large purchases in behalf of the United
States. irrespective of whether the rate of
exchange does or does not render the trans
hctiOn prOitaDle- reports are also current
that the Imperial Bank of Germany is con-
Quoting a large bullion movement for Rus
sian account, while Argentina is in the
market as a purchaser of gold. The null
tiplicity of the demands for the metal. it
is pointed out, emphasized the necessity of
protecting the already depleted reserves of
the Bank of England.
COnsols for money declined 7-16 to S5A
after the announcement OF the increase in
the bank rate American securities were
depressed Union Pacific lost Is and the
rest of the list a to as compared with" yes
terdays New York closing.
Effect in Paris.
PARIS, October 19.-Prices on the bourse
today were heavy, owing to free selling,
not on account of the cabinet crisis, but
owing to the unexpected increase Of the
Bank of Engand's rate of discount from
) TO 6 per cent. Russian imperial As of
1904 closed at 1905 and the Russian bonds
of 1894 at 1890
Banks Action Explained.
NEW YORK, October 19.-The unheralded
advance in the Bank of England's discount
rate to per cent threw the stock exchange
into confusion a the opening. There was
dsorderly break in prices, caused by
heavy unloading of speculative accounts all
through the list. The first sales of Union
Pacific were of 5000 shares at 1Si2 and
Eamated Copper, 122 $50 shares at 11412 and
III, compared with 1l6as last night, and
Reading, $500 shares at 1902 and 149, com
pared with 1919 last night.
In connection with the increase of the
bank rate of the Bank of England there
was q good deal of speculation on Wall
street during the early hours, and several
disquie;ing rumors were set afioat. Inquiry
among the banks doing a heavy foreign
business put these rumors effectudlly at
rest. A vice president of one of the leading
banks said
1.-The increase in London bank rate is
easily accounted for. The reserve of the
bank has been depleted until yesterday it
reached 1S,GOG0O pounds sterling.
To-day there was draft of sO0CO)
pounds to go to Egypt With the rate of
exchange as it stood it was within the pos
sibilities for us to draw gold from London.
While Yesterday We notified them that we
should not do so, they evidently felt that
50 long as It was possible TO withdraw gold
for this country at a profitable rate they
had better protect themselves. and for this
reason the rate was increased. We see no
occasion for alarm in this action what
ever
The market later became cu:eter and
steadier, but with small recoveries in
prices.
Philadelphia Losses Slight.
PHILADELPHIA, October 19.-Although
opening quotations were slightly lower, the
Philadelphia stock market suffered little
from the depression in New York, growing
out Of the unexpected advance in thekBank
of England discount rate. Except for a
drop of 50 share in United Gas I'm
provement. losses here did not exceed a
point. AT IL am. the market was irregu-
lar.
Boston Also Depressed.
BOSTON. October 19-The weakness of
the New York stock market, which fol-
lowed the raise of discount 10 per cent
by the Bank of England, resulted in a
sympathetic depression in the Boston mar
ket in the early trading. Later, however