The sun., 1914-09-18
FINANCIAL NEWS
AND COMMENT
Foreign Exchange Falls Again
Demand Sterling
Below 1896.
n. Y. CITY LOAN A FACTOR
Gratifying Response to the Pub
lie Offering-EurOpe
a Buyer.

As the restoration OF tho International
money market to something like workable
conditions was the fret essential step In
solving the financial problems OF the war,
attention continues to be more engaged
with tendencies manifested In foreign ex-
change than with any other immediate
feature of tho situation which the war
has created for banking and business in
terests to deal with. The event OF prin-
cipal Importance yesterday from the Wall
Street point of view was accordingly the
more pronounced relaxation OF sterling
exchange
There IL no doubt that the New York
city loan operation has been contributing
to the international financial improve
ment As soon as tho loan was arranged
1t began to exert q depressing effect on
foreign exchange because of It's advertise
ment of American intentions to discharge
tho obi legations accruing abroad even at
the expense of gold shipments, rs long as
IL was possible to export tho metal both
in safety and with assurance that the
movement would contribute to the relief
OF financial strain at the worlds central
money market. The progress OF the city
loan has been accompanied by Indications
OF Its favorable influence In various direc-
tlons. among others In the encouragement
offered to the belief that a substantial
total OF public and private security ma
turtles could be rennanced even though
the price OF the city loan suggested the
certainty of stiff terms Tor extensions.
The opening OF the bankers books yes
terday for public subscription to the loan
began 10 elicit promptly a gratifying re-
sponse from different points. not only In
hp rify bnt a1e of II lilt rpgnDukn
was more gratifying than the tokens of
the foreign exchange market that a sub
stantial amount of the city loan would
bs absorbed abroad to replace the notes
which are falling due. The offerings OF
sterling exchange showed that transact
tions were going on which were In effect
purchases OF the new city securities by
or through London. and while II Is too
soon to say that sustained Improvement
in the foreign exchange market can be
confidently counted upon there Is no
question that London remittance has de-
cl!nlng trend under offerings which are
beginning TO exceed inquiry.
Thanks not only to financial undertake
ings here and In London but to the better
supply of export bills which are appear
ing. demand sterling fell early in the
day to 4.96 and below and held there
with cables "A half cent higher. In other
respects there WAS no money market
local banking position remains one OF
good deal of strain resulting from the ne
cessity of Offering support to the coun-
trys credit structure generally, which the
country's banking community as a whole
is not rendering as II should.
Nevertheless IL can he said that the
aspects OF the foreign exchange market
show that matters have been set In train
and influences have been generated which
should work gradually and slowly for a
solution OF other problems such as the
lessening of the tension IN domestic
credits and the resumption OF dealings
in securities on which trade and Industrial
recovery depends and without which there
can be very little realization OF such un-
usual foreign trade opportunities as the
war has disclosed.
On this account, therefore II is salts
factory to note that advices from Lon
don reported "A number of signs that the
financial situation there was getting
steadily stronger. although all conclusions
on this score have to be qualified by 4
due regard for the fortunes OF war and
the risks that consequently attach to the
emt rgency measures to which British
finance with Government cooperation has
resorted. The Bank OF England in it's
weekly exhibit showed another advance
in the ratio OF reserve to liabilities which
is now fully points above the low
August figure, while the gold holdings OF
the bank are record breaking.
Wall Street did not consider that Con-
gress had altogether redeemed itself from
Its previous mistakes OF war tax projects
when IL sought to impose double tax
on tho transfer OF securities and added
directly to the burdens of tho banks.
but II was felt that protest against the
latest manifestations OF political unin-
telligence were likely to be unavalllng.
II governmental attitudes toward cor
porato enterprise undergo such a change
as the Interstate Commerce Commission
has now an opportunity TO Indicate in
the case OF the railroads. the financial
and business community will be more
disposed than the contrary to overlook
other political shortcomings In the face
OF present unprecedented emergencies
The grain markets weakened again un-
der the leadership OF wheat, In which
speculation has become less aggressive,
while grain prices themselves are fiuctu-
ating more directly In response to farm
sales and to the oscillations OF export
buying. which seems to be slackening n
little. The International Harvester Cor
poration. the bulk OF whose business IL
done abroad. deferred the common stock
dividend. and the Cruclbe Steel Com
pany deferred the dividend on It's pre-
ferred shares.