The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-11-12
FINANCIAL NEWS
AND COMMENT
Sterling Exchange Falls to the
Lowest Level Since War
Began.
SECI RITES HOLD FIRM

All varieties Of foreign exchange remit
lance we're generally weak yesterday. re-
l1xation increasing with the course of
trading. Relchsmarks sold as low as 81
for checks, the most profound extreme Of
weakness yet reported for German bills.
and because 1t Is diffcult to trace heavy
purchases OF goods for export to Germany
there seems 10 be a clearer implication
that the money market is rejecting grow
ing doubts about the financial soundness
of the German position in the war.
Incidentally of course the tremendous
discount at which marks are now quotei
would enable the German holders OF
American securities to liludatc them here
AT prices actually below the level OF
July 80. but for all practical purposes
at "A very substantial premium over the
July 80 range. Accordingly II Is worth
remarking that there seems to be Just as
little German pressure to dispose OF Amer
lean investments as there is of other for
egn pressure, and this circumstance 10
raising the question II the probable di-
mansions Of a return OF our securities
from abroad does NOT constitute an enlr-
gerat'd obstacle to Stock Exchange re-
opening.
The All around betrcrment Of the coun-
try's financial situation is indicated by
the common tendencies of the foreien
exchange market. Francs relaxed Sui
further toward the normal, but or more
consequence was the relapse OF sterling
bills. which carried them to tho lowest
pr.ces since the outbreak of the war. De-
mand sterling sold at 4.S9 and cables at
4S9ia.
The call for payment OF the ninth in
.talment of the New York city loan sub
scription is issuing and involves about
SIS. 900, 900. which presumably means an
other substantial export OF gold 10 can
ada. but the gold outgo Is no longer
cause OF concern because its ultimate pro-
portions are now regarded as strictly linz
tied. There is n growing conviction in tho
banking community that the foreign eN-
change is in the way OF turning IN our
favor and II Is expected that me same
automatic processes which have operated
so benefcially' in international finance so
far will he effective eventually in con-
tributing largely TO the solution or the
problem of Stock Exchange reopeninr.
There does not on any account seem
10 he reason for anticipating that the
McAdoo- Palsh negotiations are anything
more than IN academic discussion or IN
ternational financial relations. OF course
banking interests would be gratined II
the negotiators should come to an agree
ment that no extraordinary departures or
governmental undertaking were required
on this side OF the Atlantic.
Other tokens of improvement in condi-
tions were afforded by the rulings which
did away with committee supervision or
trading in unlisted stocks. The removal
OF restrictions on the range OF prices was
qualified by stipulations that quotations
should not receive publicity and II did not
appear that under the circumstances the
Broad street curb market was ready TO
resume active business. There does not
seem to By much sense in prohibiting cur
rency for quotations when secrecy may
operate to the public disadvantage and
the strength which security prices have
been showing this month suggests that
apprehension about satisfying the pub
lie appetite for quotations may be carried
to unreasoning lengths.
Retirement of emergency circulation by
the New York banks now aggregates al
most $4,000, 900. This is "A measure -
the progress which has been made In
strengthening the foundations of this
money market and wall street is begin
ming TO display a lively appreciation OF
the comfortable monetary possibilities dis
cernible in the opening OF the Federal re-
serve banks next week
1t is this more than anything else
which Is now reflected in the broadening
market for securities, especially those OF
fixed yield which are sough. by the owners
and Custodians of investment funds. The
Clearing House Association Is arranging
for the reduction OF It's % per cent. re-
serve requirements to the Is per cent
ratio which will obtain on the opening
OF the reserve banks. and although IL is
impossible 20 estimate even approximately
the real release of reserves which Will
take place there is no question that the
capacities of the money market have a
prospect OF material increase in the near
future.