The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-09-06
FINANCIAL NEWS
AND COMMENT
Sterling Bills Fall to 1907 IL
in the Foreign Exchange
Market.
MONEY SKIES BRIGHTER
Features and Factors of Distinct
Improvement During
Past Week.

While wall street during the past week
accepted the view more definitely adj
vanced abroad that all calculations OF a
financial character had to be based on
the probability Of protracted war. posi-.
tive progress was made both at home and
abroad In tho direction of restoring the
international money market activities
which most concern this country. This Is
q matter of vast consequence because the
revival OF free activities In the domestic
money market IS very much dependent on
the resumption Of something like normal
business IN foreign exchange.
Thanks first to the effectiveness OF well
conceived measures adopted by British
finance with the support Of the British
Government, and then in no small part
to the instant seizure by New York bank
ers Of opportunity to arrange for the
payment of some sso.Ooo,oOo OF New York
city notes maturing abroad in the balance
of the year. and thanks also to the signs
that intelligent concerted action likely to
result from the banking conference called
by the Federal Reserve Board in Wash
ington last Friday, there was steady
fall In sterling exchange here after the
middle OF the week. Dealings In French
exchange were altogether suspended on
the state OF siege for which Paris pre-
pared, and there was reminder here
that all financial plans had TO be quail
fed by q due regard for the hazards OF
the war but there Is at the moment
nothing Of so much importance to the
welfare OF this country as the indications
that customary relations are being re-
stored between the New York and London
money markets.
Tho Bank OF Englands weekly state
ment showed how remarkably successful
British finance has been In devising meas
ures to cope with the war emergency, for
the banks gold holdings have now been
raised to a larger total than before the
outbreak OF the war and are larger than
at any time In the last eighteen years At
this season. There ~ OF course a stu
pendous and Unprecedented mass of lia-
bilities which has been piled on this gold
base In the last month, hut the signs now
arc that processes are under way which
will help TO reduce To- considerable extent
the general congestion of Liabilities In the
London bill market which in turn will be
helpful TO the bank and thus enable the
bank to increase the assistance which II
can AFFORD TO the expansion or credit deal
inGs.
The latest steps taken were announced
Yesterday when the Bank Of England
gave notice that the joint stock banks
would act with It and with the backing
OF the Government In providing funds for
the liqudaton Of bills accepted before the
moratorium declared in August ard cN-
tended this week for another month. 1t
would seem now that In October the end
OF the British moratorium may be pro-
claimed and II that Is the case the way
might be prepared for "A reopeuing OF tn"
London Stock Exchange In some fashion
and 30 FOR a rcopcning OF the Wall street
stock market, at leas. on limited expert
al Until stock exchange bus .
ness can he resumed and the ordinary
facilities for rendering capital liquid
through dealings in securities are restored
the money markets cannot perform any
thing like their normal function.
II the foreign exchange market. a. now
seems likely, returns in the next few
weeks 10 somewhat normal conditions, an
immense contribution vii. have been made
to revival Of trading IN securities
There will he liquidating pressure on
quoted values whenever dealings IN SCI
curlties do begin. but with the foreign OK.
changes working in regular fashion and
with the domestic money market IN ar
improved position tho rcopenng OF h'
stock markets will not he apprehcn
ribly regarded. The menace or foreign
selling pressure OF American securities
will be greatly diminished by the posi-
bility OF making necessary remittance'
through tho foreign exchange market ir
instead Of through gold exports.
Turope's need In only to command buy
ing power In the countries like our own
where buying power Is Of most service II
will not require gold for this end " II car
get credit Instruments, and those seen
likely now to be forthcoming In substan
tial volume in the near future,
The latest measure Of monetary relic
adopted in London will llquefy vas
amount OF commitments which the Balr
of England has redscounted under I'M
Government guarantee and the DahR WI
postpone It's own claims on the acceptor'
until after the war, with the understand
Ing that the interests which discounted
ths bills originally viii do their utmos
TO obtain payment from the initial deotor'
at the earliest possible opportunity
would be impossible to ten now Hluci
help has been rendered to bflt.sh h'I.nr "
nv tho arrangement OF the New ior'
bankers TO pay the New York city oplga
lions abroad, but that II has peeh o
great help cannot be doubted.
one thing which the loan TO the clt!
does, involving the agreement to pay IN
full amount OF the clty's foreign opnsa
tion In gold II necessary, is to Inform
the world of the American intention u
establish no moratorium here asMns
American foreign debts. This has alread'
conduced TO a relaxation In the fortlsl
exchange market and viii cause furthc
ease. which will unquestionably enaol
New York bankers to pay substnnts
portion OF the city's debt In exchange re
Inittances although an amount or gol
will presumably be transferred TO ot'aw
for the Bank Of England reserve In par
payment OF the whole amount or IN
debt.
Such a gold export can be welcome
because 1t Is In accordance with Intel
iixsnt plans 10 make the greatest us
possible OF gold as the foundation o
credit dealings in the international none
market The evidence OF the Federal RI
serve Board conference IN Washlngto
that the bankers OF the country general
saw the valuable opportunity now pre-
scented to use In the International none
market the amount OF gold that tn
country can well spare under the Ie'
Federal reserve banking system about I
be set up vas also a factor In the foreig
exchange market improvement 81 III
week
In addition recognition must be rive
70 the increasing export trade movemer
while the import trade Is languishin
sven though exports are Of the cost
kind involved In the shipment of fooC
stufrs at rising prices which must ais
be paid by domestic consumers The on
~arA uhsat movement - tbp Upcl