New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1914-10-25
STERLING BILLS
SWAMP DEALERS
Spectators for the Rise Lose
Heart-RateS Lowest Since
the War Began.

Foreign exchange rates went all tC
pieces yesterday. Demand sterling
dropped to 4.92 and cables to 1929
against 4.97 week ago. when the move
ment began. Francs, which were BOO "A
for a dollar last Saturday, could be
obtained freely at 5.13 for a dollar
Marks were nominally s9c for A.
against 92c, but there were said to be
q number of transactions below even
that price.
Both French and English rates are
the lowest since the war began, and the
price of German exchange is almost
without parallel The sterling rate is
now approaching the minimum price, at
which gold exports would be profitable
provided gold could be obtained. This
figure, counting on shipments to OF
tawa, I'm lieu Of England, is little IN
excess of 400.
A number of reasons were advanced
for the sharp drop in exchange, which
has been particularly marked IN the last
two days. Fridays decline of more than
q cent in sterling was checked, IT was
said, only by heavy purchases on the
part of large banks, and yesterday, with
this buying not in evidence, there was
nothing to stop the slump. There were,
besides, large offerings of cables by UNI
easy SPECTATORS.
In the foreign exchange market there
was remarked by some Of the dealers
much evidence Of a changed feeling
with regard TO the probability OF nigh
exchange rate continuing. For one
thing, the rapid progress in the move
ment to hasten the marketing OF cot
ton has been q factor. Then the state
ment made at Washington on Friday
that the S10O.O0O0O0 gold pool would
take care of all exchange necessities
until the first of the year at least dis
cOuraged bullish spectators.
Added 10 that was a general conVic-
ton that the backbone of the exchange
difficulty had been broken when the
20th, DIST and 22d Of October passed
with no evidence OF embarrassment IN
the exchange mark"t These were the
DAVIS when. it was estimated, the great
est amounts of finance bills would ma
turc abroad through the partial abro-
cation Of the English moratorium.
The discussion at Washington on
Friday seemed to make it plain that
81 large part Of American debts to
Europe would not have to be settled
with exchange, but would be post
pOned in some way, through the CON
sent of the English creditors, until
sales Of goods to Europe should get
a good start toward overtaking them.
Instead of the United States now
having to meet $3.50, 100000 or $500
100000 i'm debts to England within
the next few months only about half
the lesser sum will have to be taken
care of, i'm the belief of bankers here
and i'm London.
Lately there has been On increased
Offering, too, Of bills drawn, not
against exports Of grain and cotton
alone, but against mineral oils and q
great variety Of manufacturer goods.
Europe has been buying here materials
for war and likewise supplies that IN
times Of peace she would produce her
self. Russia, in particular. has been
q purchaser of a considerable number
of commodities. This has tended,
naturally, to produce exchange, or to
Offset the claims Of Europe against the
United States.
A further element in facilitating the
decline in rates, according TO bankers,
is the knowledge that by the end Of
November the Federal Reserve bank
ing s-stcm will loo I'm op grafton and
something like S274OO0,000 in reserves
viii then pass into the surplus ao-
count. The release Of that amount of
gold, or its equivalent, is expected to
bring about modification Of the idea
that the United States ca mot afford
TO part with more gold TO Europe.