The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-08-17
FINANCIAL REVIEW
OF The PAST WEEK
Interest Vow Centred i'm Re-
storing Worlds Demoral-
lied Credit.
SWIFT SUCCESS EXPECTED
Wise steps h, Britain in Face
of Great ConflagratiOn
in Europe.

Tn, LAYING ~ plans to overcome the
u,,.r ro.ap., Of the worlds credit
system brought about by the shock nf
the European VAR and to put international
ronm,r., back upon working basis Is
nov sugrJsug financial attention. Some
prcfr,-. UIs pcen made. Disappolnt-
men. over the slowncss OF this progress
must uat uc taken too much to heart.
the tis, Of once more setting the
machinery .. finance and trade In opera
ton - proving an enormously difficult
oae Nr0 problems are encountered al
nos. utiN The financial world is con-
'rontcI with 4 set OF conditions new to
ttperienor aud theory alike. The field
u social ud economic theory has scarcely
,enur,d 90 speculate on the consequences
81 warfare un 50 vast scale ~ is now
Ieug .ir'cd out IN Europe. We are In
.uso.It.,l u,W ground and the relief
measures undertaken must in the nature
,t ,uugs h' more or less experimental
Tu. MOST r,Hssuring feature uf the
Nnol, outlook is the manner in which
British ururr mas risen to the occasion
dId Ats gone deliberately to work with
ut los, ot tim. to set the machinery OF
,redt 100 motion again. The whole atti-
,ude of ,u. English financial community
confronted with a huge European con-
fdera'ion has been admirable The meas
ares taken uy the Bank of England I'm
cooperation with the British Government
srs r Ic.Urdtnce with the best traditions
Oi tna' great institution for acting
promptly tud effectively In time Of crisis.
The results already attained promise
ss.l' ana smooth readJustnent OF the
situation Go the new conditions.
On this side OF the Atlantic there IL
definite encouragement In the signs Of
intelligent cooperation between the Ad-
mn',uauon and our leading bankers and
business men. The great conference held
~ Washington on Friday was not pro-
GuciIye OF decisive results Immediately.
Eut the outlining OF plans for the move
msHt of goods and merchandise abroad
END for the creation OF shipping facilities
y definite step In the right direction
II ls hoped these measures will he put
through AS eNpeditiously as possible The
action ~ British finance has invited the
hep OF every one, especially this country
which has 40 much 10 gain.
Easily the most important events OF
'he week were the opening by the Bank
a England Of credit accounts in Canada
could be- deposited to the account OF the
English institution, and the arrangements
for the british Government to guarantee
the bank against loss in discounting for
egn and domestic bills accepted previous
10 August l. when the moratorium was
declared These measures were imme-
dis'ely successful In easing the foreign
exchange market by establishing London
credits .1n this side and In releasing an
-. In, I
ion market The Bank OF England dis
count,d heavily and the open discount
market responded with surprising prompt
ness
Tie first construction placed by Wall
Street IN the announcement that the
Bank ~ England was tn establish a
depository for gold reserves al Ottawa
was that II Was "a device to compel large
gold exports from this country. That
n!s idea was entirely wrong was realized
.'.r even before the dispatches from
ondou assured US that no assault on
our gold was Intended. Nevertheless
she incident gave rise To rather Nigor-
Gus controversy over the cOuntry's right
:, resist such a move and " necessary
80 rcrud.atc our obligations 20 Europe
should payment In gold be pr 'ss'd.
T. is unnecessary TO go far into this
question. The bankers OF the country
nave wisely decided that our gold reserves
hail he conserved Nevertheless " the
occasion arises when this country can
ofectlyely cooperate with British hnanc"
~ relieving the situation by Shipping
moderate amount OF gold across the 'lnT'
an border ii will be done WilllrglF
enough
We have in this country large god re-
serves. The function ~ gold reserves II
that they become available in lines OF
extreme emergency Tho manner In which
The Bank Of England Dipped Into its sur
ilus IN the last few weeks tn release
red',s Is In accordance with III" best
banking principles Whether GU reserve
should he drawn upon further at this time
Tor the settlement Of debts abroad e'the~
ny a suspension Of bank reserve require
nerts or other expedlents may ne sub
ect FOR debate. Certainly nothing should
b" done TO seriously weaken our own ro-
sltlon But everything should be done by
American finance to bear its sharo OF the
burden.
The preaching Of doctrine OF caution
IN dealing with reserves evidently caused
some people 10 jump 10 the conclusion
mat the difficulty Of making rcmittances
would cause debtors here to make Il an
'Nruse 10 rcpudiatc, with dire results 20
me coGutry'7 honor and integrity. There
rs m genuine fear of reputation. Wall
street can agree with Mr.. Schff In his
chamber ~ Commerce speech that hon
sly il si,, the hest policy and yet hold
mat the question Of population OF cur
deh's abroad was brought up little
nrema'urcly
Our Obligations on account OF New York
81" war uf- 'ailing due within short
lime WIZ he met at whatever cost. II Is
.'' unlikely that the payment OF obliga-
IONS shortly will be arranged without
-.sort 10 gold shipments on big scale.
Vh' situation is improving. There is no
longer An absolute deadlock in the ex-
change market There Is some encourage
H'nt for the hope that before long
''i'v export movement Of our goods and
merchandise out Of the country will create
supply ~ credits abroad which will en-
'.eN reverse the situation. Certainly II
Is a>o.np'.o that the exchange market
cannot IoNg remain In favor Of a country
Dr. war The chances are that the present
situation IN the exchange market Il only
temporary and that the worst has been
seen
An interesting feature 81 the week was
ala eli u