Evening star., 1914-08-23
Foreign Exchange Conditions.

Foreign Exchange Conditions
The most satisfactory development in
| the financial circles this week has been
| the easing of Of the tension In the for
eign exchange markets. Exchange bills
that two weeks ago commanded 6.75 to
7.s5. were offered this week at 40 to
| az 4.S4 and cable transfers at 4.97h
These are prices approximating normal.
Furthermore. 1t has become possible to
transact some business in francs and
many, q new development as . practical
proposition. AS soon as ocean transpor-
tation can be assured for the millions
of bushels OF grain that now await
the tension in the foreign exchange
situation will have been removed, and
exchange will then be on q normal
bssia
pearance of gradual clearing. and If
Congress adopts the suggestion of the
New York Chamber Of Commerce and
other commercial bodies. 1t will ma
terially help matters. This suggestion
is that the federal reserve act be so
to ACCEPT bills representing domestic
transactions as we'll as transactions in
import and export trade, and further,
that this privilege be granted to the
capital and surplus. At present the
amount of acceptance is limited to so
per cent of capital and surplus and to
the export and import trade.
Withdraw small Gold Certificates.
The further suggestion was made by
the committee that the issuance of gold
certificates Of small denominations be
discontinued. andsin the future that no
smaller gold certificates than $500 be
put out. The effect of that eventually
would be to bring into the Treasury or
into the banks the very large amount
of gold certificates now serving the
purposes Of hand-to-hand circulation.
The matter OF providing for American
obligations which will mature from
time to time on the other side Is still
now very confidently expected that be-
fore these maturittes have run to any
very large figure offsets in large
amounts will have been supplied by the
shipment of grain and other commodi-
ties,
The Bank of England has made ar
rangements to issue drafts against gold
deposited to Its account In Canada.
This gold would be available neces-
sarily for making purchases of grain
and other food products in the United
States. Discounts in Lombard street
were quoted on Monday at 5h per cent.
How effective has been the Bank Of
Englands relief is indicated by the dis
peteh that the number Of premora-
toFium bills presented to Threadneedle
street was SO heavy that 1t was nhvsi-
cally impossible to deal with all Of
them. But the bank formally assured
there was no intention to withdraw the
facilities offered last week.
Stock Exchange.
The most important question before the
financial community II. when will the New
York Stock Exchange reopen? 1t is held
as expert opinion that the opening Of
exchanges cannot be delayed much
! longer, and the steady increase in the
amount of cash trading IL ample proof
Of the fact that there ia healthy buying
| demand, as well as a desire to sell. The
fact that It will soon be necessary to open
the London Stock Exchange II the new
! British government loan is to be Aoated
Ia influencing leading operators on this
ss to that as as s %
not be found tar behind. OF course there
will be some restrictions. Possibly the
| same rule will be observed that IL now
in force in regard to private trading.
the final quotations Of July 80 shall be
recognized on the exchange. 1t is con-
ceded that II London opens In the near
| future trading there will be confined to a
limited list Of securities at hr!t and that
the dealings will be for cash. This would
virtually bring the English business on
the same basis as New York "a Il would
do away with fortnightly settlements and
make daily settlements, much the same
| as now practiced in the New York mar
ket, instead When the major operations
in the current war begin 1t Is not unlikely
that II the exchange Is open at the time
there will be some particularly active
reopening Of the stock market appears to
be the large volume of orders on foreign
| account that are now supposed to be
awaitinp execution. OF course those con-
ing from Germany will probably not be
| executed. as under current circumstances
1t il considered hardly probable that the
securities themselves that were ordered
sold by cable will have been received on
this side and 1t Is hardly probable that
hankine houses will execute selling orders
| for which there Is no stock In sight to
make deliveries.
| Bond Market.
rhe bond market has naturally suffer
ed by the contraction of financial facili-
t,.a. and thus bond selling Is at the
minimum. Very little business is being
done by the investment houses, while
municipal officials ind 1t very difficult
N dispose Of their issues except on a
basis which they consider unsattsfac-
tory. Many prime municipal issues re-
main unsold. while bonds which de-
pend upon stock exchange activities as
their circulation medium are naturally
sidetracked for the present.
| Investors are more than ordinarily