Daily capital journal. (Salem, Oregon) 1903-1919, 1914-10-31
HENRY CLEW's WEEKLY
FINANCIAL LETTER

New York, Oct. 3l.-Tnterest con.
tinues to center upon financial read.
justment to the war and the early re.
opening Of the various stock and com.
modify exchanges. Events in this di.
rection continue to make satisfactory
progress, Cable advices indicate that
the reopening of the London Stock Ex.
change is not far distant, and IL is be.
lieved that the moratorium there
which expires November 4th, will not
be renewed, Prospects for opening the
New York Exchange should be CORE
spondingly improved
The country is now Tearing the use
fulness Of much abused institution
SO long as the New York Exchange re.
mains closed, no genuine test of secur.
ity values is possible, and buyers and
sellers alike ara deprived of the ad.
vantages of free and open market
Owing to the great progress made in
meeting a highly critical situation nat,
urally lessons the reason why the Ex
change should not soon be opened. OF
course, there is risk from the So
called dumping OF American stocks on
this market, This danger has doubtless
been largely exaggerated, but has Ger
tainly been much diminished by recent
adjustments. The percentage of Am
erican stocks held abroad is very much
smaller than 1t has been for many
years. The Balkan war induced {
heavy return Of our stocks, and thh
movement has continued with more OF
| less freedom ever since. The large
proportion Of what remains is doubles,
made up Of high grade long term bonds
such as are not likely to be sold undel
any circumstances. Moreover, the i'm
proved financial conditions in Londor
would tend to discourage forced sales
especially as prices have already de
clined considerably since the war be
gan, Though not undertaking the risk
Of reopening the Exchange, IL should b,
candidly pointed out that these dangeri
have greatly diminished, and thos,
which remain must be faced Sucl
risks could be still further overcome b,
a gradual opening of the market; ai
FOR instance by initiating call fol
cash only on certain classes of domestic
securities and gradually admitting In
ternational ones later on. A process
Of this kind would tend to establish @
conservative market and also give 0
valuable indication Of the natural leye
Of security values under the new con
ditions. .. %.
The opening of the Cotton Exchange
is also = matter Of vital Importance
and depends mainly on the creation OF
q successful plan for financing the
ppresent crop, which the south ser
iously needs. Fortunately all schemes
for government assistance have been
voted down by congress Had the gov
crnmont set the precedent of helpinl
cotton growers II would some day have
been obliged to help the producers OF
wheat, corn or cattle; and II could bc
just az logically required to give tin
ancial aid TO cotton manufacturers
steel manufacturers, bankers, or other,
who happened TO he In financial need
through circumstances which they could
not ioresee. For the government tC
have undertaken to finance the cotton
crop would have been most danger.
GUS and insidious precedent. In all prob.
ability some satisfactory scheme will
be evolved as u result Of the visit OF
Sir George Parish, Great Britain Ii
much the largest buyer Of cotton, and
must buy not much less than her Gus,
tomnry share to supply her enormous
export trade; not 10 speak of filling
German q lost trade. The present de-
preston in Lancashire cannot continue
indefinitely
There Is no sense In our nccssantly
shipping gold to and fro across the At.
hntic. II is costly and wastcful op.
Grafton when we consider the loss Of
interest, expense of transportation, In.
surance, commissions, etc, Our unusual
foreign trade situation leads me to re,
peat my former suggestion of cstab.
fishing an international clearing house
for gold, composed Of the leading banks
In the U0iled States and Europe which
should deposit u Sufficiently large
amount Of gold on each side Of the AZ.
lontic issuing International clearing
house certificates and drawing bills of
exchange against the deposits. This
goldl could be accounted ns part of
their reserve if In their own vaults
by means of such an institution the
Use and transfer Of certifiAles Of de.
posit would take the place of gold ship.
mcnts, Moreover, Il would be easy ia
devise system whereby such transfer
could be made by eable, The great
banks Of Europe are steadily incrcas.
ing their gold reserves The Banl, Of
England has the largest reserve In ts
history, The Bank Of Germany has also
largely Increased hs supply Of gold,
Our gold exports FOR the i9 months
ended December have been tlT6,000, 900.
Deducting our imports OF over s5T,.
100000, The net excess Of exports for
the l2 months has been about Alis,OOO,.
COOS not, very alarming outgo, con.
sldering the large stock Of gold held In
this country and the good il has effect.
ed abroad
Tho local money situation continues