The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-08-01
FINANCIAL NEWS
AND COMMENT
No Stock Market Will BE Open
To-day Anywhere in
the World.
COTTON EXCHANGES SHUT
Decision Of New York Exchange
TO Close Ia Followed by
Many Others.
COTTON EXCHANGES SHUT


the stock exchanges Of the world or clos
ing them formally was continued yes
terday with the closing OF the London
Stock Exchange. which maintains the
leading market for stocks and bonds. and
by the closing of the New York Stock tx
change, which led TO the closing OF the
other American stock markets Incl
dentally the New York and New Orleans
cotton exchanges went out of business
after a little more than an hour "
trading at record breaking declines
When there is added To this the fact
that the Bank of England was Obliged
to raise its discount rate to nominal
per cent. the highest In fifty years.
while II did no discountlng below 10
per cent. the evidences furnished by
Friday. July 81, 1914. Of the scope OF the
damage done by Europe in advance OF
tho war itself hardly require supple
ment The action Of the Bank Of Eng
land alone is sufficient measure OF the
situation The advance OF Its discount
rate was made absolutely necessary to
meet the conditions Of run upon IT'S
note departments following runs on
other British banks These banks made
payment in Bank OF England notes which
the holders proceeded promptly TO pre-
sent for redemption IN gold II wa.
understood IN Wall Street long before
tho close OF a most astonishing day
that the bank act Of 1874 would lie sus-
pended for the fourth time in history
in order 10 permit the Bank OF England
TO issue notes against approved secur!-
ties and bills
There was no sign ~ hone IN the over
night news that c1unsels OF psace would
prevail abroad. The foreign dispatches
relating TO the war preparations were
elaborated by financial advices OF the
most depressing character All over Eu-
rope the practical suspension OF specie
payments 10y tho banks was under way or
In prospect. with arrangements making
for substitution OF small bank notes FOR
the coins which ordinarily circulate freely
abroad The Paris Bourse remained omen
nominally. hut the real situation AZ Paris
was denoted by n premium Of ~ per
cent paid for gold run was reported
on the National Bank OF Belgium but
nothing OF this sort was OF significance
compared with the pressure on London
that had compelled the Stock Exchange 10
shut its doors and force the Bank Of Eng
land To take the measures instituted for
the protection Of its position as the centre
OF the British banking system.
With these aspects Of the situation con
fronting them the governors OF the New
York Stock Exchange could not have done
better than they did when they were
called promptly together shortly after =
O'Clock yesterday morning and decided
that the exchange should not open One
has to 60 back to the gold panic Of Sep
TENDER. 1873. for a precedent for this
action. but any Intelligent appreciation OF
the crisis that Europe has caused this
week could not fail TO lead 10 a con-
cluslon that the closing Of the Stock EN-
change was even more justified Yesterday
than II was forty odd years ago.
Even before the decision OF the gov
errors OF the exchange became known
there were convincing signs that should
the market open II would be subjected to
a tremendous strain OF selling ordcrs, and
the tokens OF the market situation fur
nished an Thursday afternoon were enough
in themselves to warrant the exchange
authorities in voting to suspend business
Sound American values did not deserv"
60 he impaired further with tho infinite
mischief that might he done by impair
ment on Europe's account. Moreover, In
closing the American securities market
a formidable obstacle was placed IN the
way OF European efforts TO draw gold
out OF the country.
Generally speaking nothing hut hearty
approval was expressed I'm the financial
district over the closing Of the exchange
II resulted in a respite from excitement in
which calm counsels could get hearing
There was futile murnur Of protest
from quarters In which there had been
oVermuch anxiety 10 gee Wall Street
make n record for itself IN the nnainte-
nance OF a securities market against the
world but enough had been done In this
direction. and the compliments obviously
d sCosed their own inability To Comprs-
bend the vast proportions Of the financial
crisis which had been bred abroad and
had communicated its Influences tn every
part OF tho earth. There was some die
gruntled rumbling from those who had
expected an opportunity TO SCOOP In n
lot OF cheap stocks, but their objections
were not worthy OF consideration.
For the rest there was very little merit
in the notion which obtained late on
Thursday afternoon that tho Stock FIX
change would stay open as long az there
was a market for stocks, which Is equiva-
lent to saying that II should stay open
until there was real panic. This argyll
ment was on par with the other one
heard at the samo time. that despite the
which obtained, interests
and individuals having debts abroad
should continue to make every effort To
pay them at whatever cost to the United
Stntcs as n whole. The idea was that
the country should persist In gold exports
az long as II was solvent which Ii tanta-
mount to saying that IL should export gold
until II bankrupts itself
A clear perception Of realities was mani
fest I'm every direction Yesterday, and II
is TO no noted that while taking tho
initiative tho governors of tho Stock IcN-
change had banking sanction for their
decision to close. Thu banks aud tho
bankers gave. moreover convincing ind
cations OF the alertnsss with which they
were attending to developments and of the
cool headed purpose with which action
would he guided In all the emergencies
which European affairs may create, The
bankers concluded Immediately that cot
lateral loans should he let intact as tar
as possible ON the basis Of the security
prices established Thursday and every
effort will h. made to preserve a stable
status for security obligations There WAS
no calling OF loans here except by Canada,
although. scnslbly enough. rates tor can
loans were marked up to ana IN per
cent. There vas practically no market
for time money, although some nominal
quotations were made. such as per cent
for six months funds. and commercial
paper was without quotation,
The financial features of tho day in
GUIDED three failures of Stock Exchange
INNS. X G-rr>N irre-r-v -%ser T-iz<s~z<s.eS-
failures as well. and were caused by tho
violent fall in cotton. ThH other Stock
Exchange embarrassment was n case Of
dry rot, There was another failure on
the Cotton Exchange. and considering the
fail in the staple, which amounted to $40
bale In tn" hour in which the market
opened after the previous concession Of
the week, IT is remarkable that more