The Birmingham age-herald., 1914-01-14
Foreign Exchange Business

! About 1868, or within few years after
tire close of the civil war, there began.
almost inconspicuously, movement to-
waro New York for Boston. from Balti-
| more and from Philadelphia occasioned
| by the new phase of the foreign exchange
| business of this country. which was of
| itself consequent upon changes in our IN
| ternational trade methods. From each of
| these cities there came about that time
to New York a representative of highly
| influential banking houses which made
to some extent a speciality of foreign ex-
change.
These representatives were at first con-
tent with inconspicuous quarters, and
| their chief business was the picking up
foreign exchange which at that time be-
gan to find it's chief market in New York.
| The secured desk room in banking
houses. The original house in the United
States to engage on an important scale
| in handling foreign exchange was the one
founded by Alexander Brown in the city
of Baltimore a little over 100 years ago.
| Mr. Brown went to Baltimore from Ire
| lane for the purpose of establishing a
| liner business. He was a master of the
manufacture and marketing of Irish
| linen goods.
| He observed after while that it was
! the custom of Baltimore merchants actu-
ally with their own hands to wheel in
wheelbarrows specie TO sailing vessels
| whose destination was Liverpool for the
| purpose of establishing credit there. 1t
occurred to Mr.. Brown that he might
| draw bills upon his Liverpool house with
| which TO pay the exporters of tobacco,
| Baltimore at that time being the great
| exporting town for tobacco. Out of this
small beginning grew the international
| house identified by Mr. Browns name.
| His successors. years later, found 1t ex-
| pedient to secure quarters that were at
| first inconspicuous In Philadelphia and
! in New York and later in Boston
| But the gradual changes in interna-
| tional trade and the colossal development
| Of the expectation of cotton, tobacco and
| food products and the concentration at
| New York of much the greater part OF
! the imports rapidly necessitated the en-
| largement of the somewhat humble quar-
| ters which were at first established by
| representatives of out-o1-toWn banking
| houses in this city.
| At about the time this change was first
observed there began the concentration
! in New York of commission houses, which
| were agents for textile goods, and es-
| pecially cotton manufacturers. This bus
1 mess had been scattered. Boston for
| wears was pre-eminent in this respect
and in Philadelphia very large business
of this kind was carried on. No one
| was ever~able to explain why this par
| ticular business concentrated, In New
| York
They Can't Get 1t Away
| Boston, the organization committe has
| learned either through testimony or in
formally, has always possessed the mas
| terry of the Awoolen business SO far as
/ commission houses were concerned and
| this Is TO a great extent true of the boot
| and shoe business. These businesses Bos-
| ton will retain and probably greatly in
| crease As these two businesses are
very large. the fact will undoubtedly be
| strongly influential with the reorganiza-
| tion committee Secretaries McAdoo and
| Houston, in reaching decision about
/ the establishment of a regional bank at
Roston Notwithstanding all the changes
and the practical elimination of the mag
| uidcent foreign commerce, chiefly with
| China and the East Indies. which cree
| ated vast amounts of capital for Boston,
uevert theless the firm maintenance there
1 of rre-eminence with respect to the mar
ket for wooden goods and for boots and
| shoes will be likely, it is thought here, to
| Justify the federal reserve board to agree
| with the organization committee that in
! BOSTON should be located one OF the
regional banks These great business in
| terests coupled with the magnitude of the
| importations which pass through the Be
| ton custom house together with the in
! fluential and authoritative financial rela-
/ tious between Boston and almost all OF
| New England. excepting Connecticut. viii
| probably lead to the naming of Bostor
as one of the regional reserve cities
For there are other commercial consider
| ations for the federal reserve board te
weigh than the subject of foreign ex.
| change, momentous as that is wher
passing upon the expediency Of establish
ing regional reserve cities.