The Washington herald. [volume] (Washington, D.C.) 1906-1939, 1909-10-21

New York, oct. 2O.-Apprehensions Of
an advance IN the Bank Of England dis
count rate tomorrow 70 1-2 per cent. or.
possibly, even to per cent. was tho
potent factor to-day In all the worlds
leading security markets.
Here the judgment OF bankers and of
others in a position to be informed on
the subject, varied as to the likelihood Of
an advance, but with the weight Of
opinion seeming to incline toward the
probability II is, Of course, realized
that the policy pursued In the matter
Will depend entirely upon the exact
knowledge OF tile banks financial posi-
ton. which is as yet publicly undisclosed.
and win not become known until the
figures OF the banks weekly reports are
published Tomorrow morning.
Advance Is Expected.
On the one hand. It would seem as II
an advance in the rate ought not to be
expected. inasmuch as the per cent rate
established last week has been effective
in pointing exchange rates all over the
world in favor Of London, and in making
1t possible for the bank to obtain ali
the weeks supplies OF gold offered in
the open market
There has also been heavy liquidation
Of loans in London. so that there seems
20 be little doubt that the bank IN SIS
last report will show a considerable in
crease in surplus reserve.
Il is said. however, that the bank was
compelled to pay a higher premium than
II liked for the gold il obtained, and that
gold will also probably be withdrawn
from the bank before the end OF the
week for shipment to various European
and South American countries.
1t may be, too, that IL will be found
that the amount of outstanding credit
still existing in London will be too large
for prudence from the point of view of
the banks conservative directors.
Assuming therefore, that an increase
IN the rate is ordered, the real question
OF interest in the matter is what effect
II will have in our own stock market,
and upon this point opinion was as vary
ing to-day as upon that OF the probability
of a change in the banks rate itself.
Presumably If the bank should make
such a bid for funds as 10 induce gold
exports from this side Of the Atlantic al
a time when gold imports are usually in
progress. the incident would be regarded
as a more or less adverse force in the
local speculative situation.
Sterling Exchange Even.
Sterling exchange is still even after
its advance OF more than one quarter OF
a cent to-day at considerable distanc,
from the point at which gold exports
can take place and IL may be seriously
questioned whether the Bank OF England
would desire to force exports OF golC
from this country at this time
An advance in sterling to a point tina
would lead the Bank of France to part
with a portion Of its gold hoard for the
direct or indirect accommodation Of Eng
land would. # is though fulfill all the
needful purposes which the Bank Of Eng.
land has at heart
II might also turn out that a certain
amount OF gold could be sent from thii
country to South America without in.
pairing our own financial status. and TIL,
would help the Bank OF England quite az
much as exports OF gold 70 that country
direct A small amount Of gold wa.
taken to-day for export from this city q
Brazil