The Richmond Virginian. (Richmond, Va.) 1910-1920, 1914-08-03
EUROPE IS MAOLY
C0URT|NG DISASTER
FINANCIAL UNITED STATES WILL
FEEL HEAVILY THE ErFECTs
OF WAR
E,Ssssr..y' .~sS4,.
FIRST IN FORTY YEARS
CLOSING OF NEW York STOCK Ex-
CTfAzaT LEFT NOWHERE FoR
TRADING EXCEPT WITH
GREAT Loss

New York, Aug. 1.-THE SUMS
weekly review of the financial situa-
ton tomorrow will say:
A tragic chapter In human history,
the most tragic chapter to date has
been opened. When and how 1t will
close no man can tell. but the world
Is not coming to an end with the dis.
aster so madly courted by Europe.
Rent and torn as 1t has been, the TAB
rio OF civilization will be repaired by
the courageous efforts OF intelligent
men. but what an awful spectre OF de-
struction has been contured up.
How colossal the dimensions Of the
crisis were was clearly demonstrated
In the rapid rush Of last week
events. It's full proportions doomed
plainly In view when the stock ex-
change closed on Friday for the first
time In more than forty years for
other than holiday reasons, the sus-
pension Of business following the
closing of the London stock exchange
ON the same day. This left nowhere
In the world any markets In which
securities could be bought or sold in
any quantity, but the formal closing
was only an admits sion of the fact that
dealings in securities were no longer
possible unless values were to De
ruthlessly slaughtered to an extent
that would spell widespread insolv-
ercy.
Size of Crisis.
A further unmistakable gauge or
the dimensions OF the crisis was given
when the Bank of England, after
raising its discount rate from pes
cent to 4 per cent Oh Thursday, Jump
ed 1t abruptly TO per cent on FRIDAY.
and then put 1t up to 10 per cent on
Saturday in order to cope with run
on it's gold reserves through the pre-
sentation Of Its notes for redemption.
The awful violence of the blow dealt
to the economic structure OF civiiizd-
ton was ev!nced also III the prices
made for premier world securities be
fore the markets closed. Consois
were at the lowest price In century
with French rents at the quotations
made in the days of the commune,
while many stocks in Wall Street had
been carried as low as the quotations
in the 1907 panic, with some lower.
Gold Drawn BY Europe
How much tho United States was
hurt is only partly Indicated IN me
cornpulsion which made 1t necessar y
to Glaze the cotton exchanges after
a fall In the price of the staple almost
equal to the exterme advance of $780,
600, 900 in the value OF the wheat
crop, caused by the prospect OF war.
At the same time gold to the amount
of about s5o,oo0,o00 was drawn out
of the country by Europe, despite the
wild arrangement of foreign exchange
and the exhorbitant insurance prem
ums, making the aggregate OF the
gold exports for the year about sl2b.-
600 900.
Every encouragement to confidence
is afforded by the way in which the
American people and their economic
Institutions have so far withstood the
shock and strains The splendid ex-
hibition of the underlying soundness
and fundamental strength or nfns--. "a :
values which was made by Wall s Get,
until 1t was clear that opposition must
be offered to the pressure OF European
liquidation of securities. and Europe
frenzied demand for gold, was a guar
aatee that this country. with brave
and prudent management OF Its affairs,
could weather the European storm.