The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-09-04
BANKERS CHEERED BY
EXCHANGE RATE CUT
Thought One Of Most Hopeful
Signs Since War Crippled
Finance.
AVOID PARIS CHECK RISK
None Sold Here in Fear of Siege
Washington Confer
ence To-day.

The foreign exchange situation I'M
proved yesterday. Demand sterling, which
was quoted at 5.o6ia on Wednesday. de-
clned to 5.O3is. while cables dropped
from 5.07is, Wednesdays closing price.
to 5.0ils. In view OF tho probable siege
of Paris by the Germans bankers refused
10 sell Paris checks, as they could not
insure their delivery. and In case they
we're returned TO them they would have
TO refund the money paid for them aud
pay per cent. interest.
The officials Of the Bank OF France are
moving the $3.50. 100000 In gold and silver
of the bank to bordeaux, fearing that ~
Paris is captured II might he seized by
the Germans. n IL not unlikely that
from Bordeaux the hundreds Of millions
Of French gold and silver will he taken
To England and stored in the vaults OF
the .ank OF England. American insti-
tutions having branches In Paris are re-
moving all their gold save what may be
called for by depositors.
There Is considerable interest IN tho
conference which will take place In Wash
ington to-day between Albert H. Wiggin,
president OF tho Chase National Bank and
chairman of the Clearing House commit
tee; William Woodward. president of the
Hanover National Bank. and the members
OF the Federal Reserve Board. In hnan-
cial circles IL is believed not unlikely
that the bankers will ask the Reserve
Board to place some $40. 900 OF gold
In the banks here for the purpose OF
relieving the foreign exchange situation.
II the gold is sent here there may be
shipments Of gold to the Bank OF Eng
land depository in Canada.
The break In the high rates eXistlrs
in the foreign exchange market vas one
Of the most hopeful signs that the bankers
OF this city have seen since the closing
OF the Stock Exchange and the democrat.
zatlon OF the delicate fabric of the foreign
exchange market. The break was largely
due to the better feeling In financial cir
cles In England and the evident willing.
ness of the bankers in that country to
purchase bills maturing In from sixty to
ninety days.
The extension OF the moratorium also
did much 10 lower tho existing exchange
rate, as many persons who had not be-
lleved that II would be extended had pur.
chased exchange to cover their obliga-
tons. When the extension was announced
they decided TO take ADVANTAGE OF II and
entered the market as willing sellers OF
tho exchange they had purchased, believ.
ing that when the moratorium expires
exchange may be lower.
The refusal OF the foreign exchange
men to do business In Paris checks marks
the first break in exchange relations be.
tween the financial institutions Of this
country and those of France since the
outbreak of tho war. Should the Ger
man army, which Is marching TO inves,
Paris be decisively defeated by the allies IL
Is not unlikely that business Ia Paris
checks would he resumed at once, but
with matters as they now are bankers
prefer TO watch developments for a few
days before making any further com
mitments.
The matter Of the removal of the $500
100000 in gold and the $3.50. 0OO. 900 In
silver in the vaults OF the Bank Of France
to Bordeaux interested the financial dis
trict yesterday. 1t was insisted by some
authorities that when Paris WAS invested
in 1870 and the seat OF Government
moved to Bordeaux the gold was
left in the vaults of the bank and was
respected by the Germans. on the other
hand other authorities stated that when
the Government OF France was removed
10 Bordeaux in 1870 the gold In the
vaults of tho Bank of France accom-
panied II.
Maurice Leon. the French lawyer, said
yesterday: "a siege OF Paris by the Ger
mans can embarrass but not paralyzc the
banking business Of France It means
merely a shifting OF business from the
central bank TO one Of its branches.
suppose that the removal OF the reserve
has already begun as a precautionary
measure"
II was impossible TO learn Just what
replies were being received from the
national banks, trust companies and pri-
vate banking institutions 10 the requests
sent out by Mr.. Wiggin this week for a
statement OF the foreign obligations and
credits OF the various institutions. II
was rumored that private bankers having
extensive obligations abroad have taken
the stand that the questions smacked
Of the inquistorial and had refused &c
answer. II such Is the case Il IL moi
believed that the Federal Reserve BOARD
will be able TO obtain any very accurate
data regarding this country's foreign In
debtedness.