Evening star., 1914-07-30
ARFORCESSTEPS
T0PROTECT GOLD
Bank of England Raises Dis
count Rate, and France
Follows Suit.

raised it's minimum rate OF discount an
entire point. making it per cent. The
step was taken as protective measure
in view of the chaotic conditions on
the continent following the outbreak OF
war between Austria-Hungary and
Servia and the almost general advance
Of the bank rates in continental
centers
BY discounting bills freely during the
past few days while ordinary sources
for discounting were practically sus-
pended and by arranging credit in con-
nection with gold coming from New
York while American exchange was so
difficult to obtain, the Bank of Eng
land considerably relieved the financial
world. Now. however, that raid is
being made on it's gold supplies by the
continent of Europe, the Bank of Eng
land has found it necessary to take
protective measures.
Something like $5,00O.O0O in gold
went out yesterday. while France Sc
cured practically the whole of the So
100000 which arrived from South
is coming from New York to pay for
securities sold recently, this sum can
hardly arrive in time to offset any
further continental demands.
The Bank of England return is ex
pected to show a large increase of the
loan business, a smaller stock of gold
and sharp shrtnkage In the proper
tion of reserve to liabilities which the
higher bank rate and the expected gold
arrivals will partly restore.
Forced to Protect Itself.
The continental financial and political
situation. however, is so acute that it
is essential for the chief financial in
stitution in London to take measures
Of protection The open discount market
will be able to work more freely now
that uncertainty has been removed
with the establishment of higher off,
cial minimum bank rate.
Absolute gloom prevailed today on
the stock exchange. Yesterdays crop
of failures and the fact that there was
no improvement in the European crisis
had a most depressing effect. Brokers
stood about In groups waiting for
something to turn up. but they declined
to do any business. Quotations were
somewhat under yesterdays figures,
but We're purely nominal and what lit
tie business was done was a matter of
prolonged negotiations. British consols
opened at yesterdays low record OF
69R. which was y below yesterdays
closing price. They quickly recovered
a half point. however. to the price at
which the government broker was buy
ing.
The only other transactions heard of
were in Canadian Pacific, which opened
at 167 and then fell to 1861. or y below
yesterdays closing price. The ham
nounced failures OH the stock OK
change. was heard early today when
another firm with large continental
connections announced that it was un-
able to meet it's obligations. All the
failures thus far announced have been
of firms which do continental business
The change in the bank rate had no
effect on the market as 1t had been
anticipated.
Trading for Cash Only.
BERLIN, July 3O-Settlement dealings
on the bourse were entirely suspended to-
day and the brokers who gathered on The
floor confined themselves to cash trans
actions
The most pessimistic rumors were in
circulation and many firms We're in Diff
culties. The members Of the Bankers
Association met and many of those pres
ent were in favor of closing the bourse,
but as they were not unanimous the COM
mittee Of the bourse resolved to keep the
exchange open for cash trading.
Exciting scenes were witnessed on the
produce exchange where wheat and rye
were quoted from S1.1o to 81 per metric
ton higher.
The Imperial German Bank still main
tanned its waiting attitude, but it is an
derstood that 1t will follow Londons ex-
ample in increasing the bank rate.
A Potsdam banker. Eugen Biber, and
his wife committed suicide in a Berlin
hotel today because they had lost more
than $62. 900 since the beginning OF the
war crisis.
Higher Rate in Paris.
PARIS. July 30.-The Bank Of France
today raised its discount rate from 33s
to AZ per cent, and its rate for loans
from. AZ to 81 per cent.
! The Paris bourse opened today as.
usual. but there was no business The
| nominal quotation of French per
cent rentes was unchanged.
| It was announced by the committee
of the bourse that the monthly set
| tlement for July had been postponed
until August 81 for all stocks, including
rentes.
The French minister Of finances de-
clared today that he was resolutely op-
posed to suspension Of specie payments
which had been advocated in some
quarters. He said state of war alone
necessity.
French Are Hoarding Money.
The French public seems to regard a
general war as certainty. The crowds
outside the savings banks today were
three times as numerous as those of
yesterday. Private boarding and the
precautions taken by the Bank Of
France have almost removed minted coin
from circulation. The director Of large
industrial establishment today sent out
fourteen men to scour the banks In the
city and try to change bills into coin, in
order to enable him to pay his workmen' s
monthly wages. They were met by an
almost invariable refusal.
| line of several thousand storekeep-
ers waited outside the Bank of France
today In the hope Of getting silver for
| their notes. as their inability to make
change Is paralyzing retail business.
| AMSTERDAM, July 30.-The bourse
reopened today. committee of bankers
having placed a large sum of money at
the disposal Of the bourse committee for
loans on national securities.
BRUSSELS. July 3O-The rate OF dis
count Of the Bank Of Belgtum was
raised from to 5 per cent today.