The Washington herald., 1914-08-18
MONEY SITUATION
NOW IMPROVES
New York and London Ex-
change May Be Cleared Up
by End Of Week.
MENDNG PROCESS IS ON
Efforts Being Made to Equidate Cot
ton Commitments and Preventing
Trading in Futures.
MENDNG PROCESS IS ON
By w. sTEALEY.

By w. sTEALEY.
1t is probable that the foreign exchange
situation will be cleared up this week as
far as dealings between London and New
York are concerned. The rate for cables
and demand sterling bills fell below s.
TO the pound at the end Of last week
and If remittances can be credited in Lon
don by 6epositing gold to the credit OF
the Bank OF England in the Canadian
treasury Al Ottawa much progress will
be made. though not so much to our ad-
vantage as if our Federal reserve banks
were organized and ready to take care
exchange with Paris by dePositing Sl2,0O,-
of our foreign exchange.
The French government also has aided
600 in gold with J. P. Morgan & Co.'S
branch in that city. As our Federal re-
serve banks will have the advice and as
sistance of Paul NJ. Warburg and the
British treasury has enlisted the services
of Sir George Paish there will be no lack
of export knowledge al both ends of the
line between London and New York.
The movements of money during the
past few days were more encouraging.
which leads to the hope that the mend
ing process is now well under way.
This was largely due to the suspension
of gold exports, while there was not
such a heavy outflow into the interior.
New York City. but the loss was only
S2GS4G as compared with So SIS, 900 the
precious week. This is more or less 10
be expected at this time, the beginning
Of the harvest.
A feature of the currency movement
was the merely nominal shipment Of
national bank notes to this city for re-
demptiun. agEregating $isS.OOO. This is
no doubt due to two reasons the fall
off NJ he infa
and the local banks holding this cur
Tency 10 meet over-the-counter demands,
which is not unnatural in times like the
present. even though the banks cannot
count the notes in their reserve.
Since the beginning OF August the New
York banks have lost on the net cur
rency movement So, ,l64, 900. comparing
with a gain Of s., 42OO0O in the corre-
spending period last year. gains of 81. 4.3Ss.-
90 in 1872, SS6is.OOO in 1911, and SI1.425, 900
in 1910.
Cotton Outlook Better.
Long strides lave been made toward
cleaning up the international cotton situa-
ton, although it is impossible to make
any predictions as to the probable date
Of the reopening Of future trading or OF
the resumption OF buying by domestic
consumers or for export. Spot is quoted
at II cents, New York middling basis
and Augusta the only other spot market
open. is quoting II 1-2 cents for old 10 1-2
cents for new cotton; but these figures
are nominal No one knows and no one
can say what would follow were one or
two million bales 10 be thrown on the
market. except the broad. general state
ment that the decentralization would be
complete.
All efforts have been directed to Iiqui-
dating the commitments which were out
standing when the exchanges closed.
Liverpool has Joined hands with New
York in the movement to consolidate all
remaining commitments into December.
thereby facilitating the liquidation Of
accounts. When this Is done IL will be
possible to ring out long March against
short November cotton. for example, and
the closing gut Of straddles in this mar
ket where customers have sold one month
and bought another will be possible
The decision Of the exchanges in New
York and elsewhere to close out all con-
tracts on the basis of the last closing
prices means in effect that traders have
had this notice served on them: What
ever your profits, o.. losses were when
the exchanges ,losed, take them or bear
them on the basis of the final trading"
The trade has recognized the Importance
of getting OF the books every trade that
can possibly be Hquidated, and of pre-
venting any new future commitments
from being made.
When the books are bare, when ocean
commerce is resumed, when exchange is
restored, when domstic spinners begin
10 put cotton. as they must very soon.
and when some plan has been placed
into operation which will hold back suf-
fcient cotton to enable the marketed sup
ply TO balance the immediate demand,
then will il be time enough to talk about
reopening the future boards. That is the
general opinion.
Eject on Price of Shoes.
business will be very detrimental A
large manufacturer says:
We import from the countries involved
in the war about 60 per cent of the
calfskins consumed in this country. This
source Of supply is now shut off and the
result undoubtedly will be higher prices
both for raw and finished calfskins
The United States imports from IS per
cent to 20 per cent Of the hides con-
sumed in this country. Only 12If per cent
OF this amount, however. comes from the
countries involved in war. From this we
infer that there ought not to be a great
advance in hide prices. as a whole. Some
particular kinds may advance; others
may recede The problem of transporta-
tlOn from SOuln american ana els6Nnere
is a serious one and ought to be solved.
"Our shoe exports amount 20 about
SlS0Jn,O00, which is about 4 per cent of
the total product of the shoe industry of
this country. Our exports, however, to
the countries involved in war are not
over 3 per cent of the total, or ! per cent
OF the total production.
The effect Of the war on the shoe busi-
ness for the time being is exceedingly
detrimental Southern merchants are in
a panicky state OF mind. The South ex-
ports 60 per cent Of its cotton. The for
eign demand has come to a standstilI and
it is impossible 10 ship the staple. For
this reason. Southern merchants are can
ceiling orders freely
1T would appear as If England ought !
to be able TO take care Of her own shoe
demand and II is doubtful IL that country |
will be a large purchaser of shoes in |
America. In France and Russia, how
ever, the situation is different Both of |
these countries may, therefore become |
large buyers Of shoes from the United |
States, particularly IL the war should |
continue for any length Of time. Germany |
is so shut off that il would seem an ex-
tremely difficult problem TO ship mer- |
to her, even II their proved |
TO be necessity. We believe that our ex- |
ports will not show any great expansion |
on account OF the war, but /
mat the increase will be gradual
Some tanners are endeavoring to take |
1