The Washington herald., 1909-11-21
LONDON NO LONGER
FINANCIAL CENTER
New YOrk's Position Daily
Becoming More Assured.
ENLAND CANNOT OBTAIN GOLD
official Discount Rate Doubled, Yet
Funds Are Not FOrthcOminE-Must
Afrtca-Bnnk of France Comes 10
Aid When Inducements Are offered.

London, Nov 20-competent observers
no longer conceal from themselves what
has been already pointed OUT namely,
that the Bank Of England IS fast losing
control OF the worlds monetary policy
and that New York's position as the
worlds financial center Is daily becoming
more assured and Rccentuated-
One established feature of the London
position is that it seems no longer pos
slble by the imposition Of higher dis
count rate TO compel the foreigner TO
Teplenish the depleted Golfers OF the Bank
OF England. For the eighth week in
succession the banks reserves Of bullion
have undergone severe reductions and
the ratio Of reserves TO liabilities has
fallen to Asa per cent
In order 20 attract gold to London
the Bank OF England within little more
than a fortnight found it necessary TO
double it's official discount rate. which
at the moment of writing stands at 3
per cent II is nowhere higher in Europe
except az Lisbon, where funds are per-
petualIy short and where per cent
is charged.
Always Attracted Gold.
The experience Of years has been that
the raising Of the bank rate has auto
maucally attracted gold to London. but
this time II has not righted the none
tary position, and has besides created
an unpleasant artificial tightness which
is CALLING TO financial operators. No
An tsfff1 4fn hoe -aa
20 refill the bank reserves. and even the
export Of sovereigns has not been def
ntely stayed. Within the last few weeks
for instance. Brazil has demanded over
sS.0O0OO0 for payment OF coffee settle
ments, which are mostly made in Lon
don.
The size Of the crops in exporting coun-
tries and the deficiency OF the harvests
in importing countries is another dis
tuTblng factor. but what has disappointed
the London money market most is the
responsiveness Of the New York
exchange, which was expected to rise TO
specie point on a 8 per cent bank rate,
but which has receded instead Of ad-
vssnctng Plainly New York refuses to be
coerced any longer.
Wait for New Arrivals.
The best the bank could do for itself
was to secure the gold arrivals from
South Africa; but even for this gold.
which did not cover its needs. premium
had 10 be paid, indicative OF strong for
eign competition. City authorities are
perplexed at the banks loss OF power,
and If the bank rate should have to be
raised again a situation OF difficulty
would be created. possibly leading 10 a
reconsideration OF the whole monetary
structure OF the London market The re-
Election occurs that the banks charter Is
over sixty years old and needs overhaul
ing.
There IS always that famous Mont de
Piete. the Bank Of France, which, with
its S720O04000 or more in It's vaults, will
come to tho rescue-fOr a consideration.
One begins to wonder whether the Bank
of England will ever have TO consider
seriously the advice given by a plain
American business man. Struck by the
external appearance Of the grimy two
stored ediffiCe set in q spacious court
yard where ground is so valuable. he
remarked that IL that old bank had a
live president no would run up twenty
floors on the top Of IL. make ten times
It's dividends as a real estate company
and not bother any more about the mol
dy old banking business"
Joking apart London IS beginning TO
wake up to the fact that the absolute
primacy OF the money powers OF the
world is no longer welded in Thread
needle street. Changing relations OF
momentous consequence are gradually
but surely being established.