New-York tribune., 1914-11-30


sterling, which had closed she Satur-
day before at a little over A.3S, rose a
cent in the pound on Monday. and on
Tuesday reached 400. The day follow
ing there was rather freer selling and
the price reacted, as II appeared then
that the amount of foreign selling OF
our bonds that would call for remit
tance had been overestimated. Com,
mcrcial bills, however, were wlthheld
from the market in expectation OF
higher prices.
1t was not found necessary for the
managers Of the gold pool to offer
exchange. Undoubtedly their ability
TO draw against the balance they stu
have to their credit in London acted
es counterweight 70 prevent too rapid
an ascent. Representatives OF the Br1t-
ish Treasury. who have been conferring
with our authorities on the course OF
international trade between this coun-
try and England, returned to the other
side, where conferences will be resumed
with representative American imam
ciers.
Our exports of goods are doing
so much toward canceiling our obliga-
tions abroad that negotiations are now
confined to guarding against emer-
gencies.
Ready to Protect Our Gold.
Should foreign holdings of our Sc
curities be returned after all in such
volume as to overcome the favorable
trade balance in commodities ana
threaten an undue drain on our gold,
then unusual remedies will be called
into play. These are understood to in
Eel af ler
in London against which we can draw
exchange, and payment for stocks and
bonds from abroad with negotiable GER
tifcates of deposit, which could be dis
counted in the British market. The
bankers gold pool has called on sub
scribers for only One-quarter Of the
S100000,0 900 pledged, and of this has
shipped S10,000,000, so here are means
ready for checking at least any sudden
disturbance in sterling exchange.
Favored by the lower tariff, imports
persist in heavy volume, but shipments
are sufficient to add steadily to the off,
set against our debts in Europe. Cot
ton is moving slowly. Wheat and -four
exports hold up fairly well, though
there is not the overwhelming Eu-
ropean demand for foodstuffs If some
weeks back. War orders are coming in
and being filed viii ch in the aggregate
reach large totals. Exports of finished
steel as yet are light, but Improvement
here is indicated, as producers are
showing more inclination to make price
concessions.
Though lending institutions here an
nounced that for time they would
hold the greater part of the reserves
released by the new banking laws, bor-
rowers were able to make easier terms
before the middle of the week. Call
money was out as low as IA per cent
so literally as to make unnecessary the
pool proposed to furnish accommoda-
tion on the opening of the exchange.
Time loans on collateral were made at
the same low figure. Commercial paper
of the best quality was in excellent de-
mand by banks here and in the in
terror, and was generally placed at D
per cent.
Discount Rates Maintained.
The Federal Reserve Board refused
to oblige borrowing centres with lower
discount rates. Washington officials
had been so emphatic about the release
of credit through the new Reserve act
that misconceptions of the principles
of redisOounting have naturally arisen
in some quarters. 1t is not intended
that q member bank, having made a
loan on commercial paper. should be
able to rediscount it at a profit, lend
the proceeds and then repeat the opera
tion over and over again. For each in
dividual institution rediseounting will
be an exceptional proceeding.
The possibility of obtaining funds on
commercial paper from the regional
banks makes it liquid asset, such as
call loans were supposed to be here
when the stock market was open. Re-
discounting will enable member banks
to extend credit 10 customers whom II
might otherwise have to put off, and
will offer a ready remedy for depleted
reserves. The regional banks will dis
count at higher rate than that pre-
vailing in the open market. SO later,
when a broad bill market is established
the first resource of a bank wishing to
realize on part Of the contents Of its
portfolio will be there rather than at
the regional bank.
In London discount rates hardened a
| little as a result of the new loan, but
were lowered again before the week
had closed. The Bank of England's re-
turn showed comparatively little effect
I of the government borrowing. Beyond
an advance of s4,OOO,OOO in loans, de.
posits of idle money were 100000
/ greater and the reserve percentage fel
/ back to a little over u per cent from
ground 81 per cent the week previous
, Bullion holdings made small loss OF
| less than s350000, but 100000 more
/ had been set aside as reserve against
/ the new Treasury notes. There are
now reserves Of s12,500,000 against thi:
emergency currency, and it IS appar
entity the intention to add further K
/ this sim until there is IL bank al
amount of gold equal to the notes out
| standing.