New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1914-08-24

Ct NiNtNN ANaNNs hit ltNAlHtu 10 'ht
markets, and VIC shall feel the lack of
support IN financing our industries for
which We have SO heavily leaned on
Europe
stock Exchange Opening.
Eventually thc Stock Exchange here
must open and arrangements perfected
Tor preventing the thrush Of our stocks
and bonds from abroad from democrat
izinC quotations. England IS talking OF
simultaneous opening of business iu
London. Paris and Belgium. but this is
naturally dependent ON some important
victory Of the allied arms. Such re-
sumption of trading viii probably be
Joined I'm by New York. The hope is
that before such time clearing up OF
the foreign exchange situation IN Eu-
rope and other favorable developments
may have so increased business through
the Stock Exchange clearing house ~
prices not lower than those Of July 30
that general unrestricted trading Will
not mean an unrcason8bly sharp break.
The banks IN the financial district
are. Of course, powerful 20 decide how
long they can continue TO carry the
present situation through their loans
on stock market collateral To keep
their funds in fluid condition they had
outstanding large sums IN call loans.
ordinarily the first line Of defence IN
times Of pressure. Now these are
frozen until security trading begins.
and so large a proportion Of their de-
posts are tied UP in these and m reg
ular time loans that the man IN reCu-
lar commercial business finds II almost
impossible 20 finance his needs through
the sale Of commercial paper unless he
has some arrangement with his bank
through which his needs are met as
depoStor.
Prompt arrangement Tor Clearing
House certificates has enabled the
banks 70 extend reasonable accommo-
dation. and with the Controller OF the
Currency exercising his discretion The
riCid legal requirement that would
stop banks from making new loans
when reserves are impaired is being
GisreCarGod. Our new banking law
soon 20 90 into effect, recognizes that
reserve must be drawn on in time or
emergency. and the result Of such pro
ccdure was seen IN signs Of slackenlne
here Of the demand Tor currency be-
fore last week had closed. The new
emergency bills have been Of much
service In meeting demands Of interior
banks and payroll requirements.
The local banks strengthened their
position during the week, the Clearing
House statement Of average conditions
showing the deficit in reserve reduced
more than $1,000 900 through cash
gain Of some S4.s0OO00. Loans were
expanded only q little over S7.0oo.ooo
and deposits made a slight decrease.
Foreign Exchange Disorganized.
Restoration of the broken down in
ternational credit system has been a
matter Il slower accompl lshment As
grain claarances increased and bills be-
came q little more plentiful the start
of the week saw francs and sterling
lower. but lack Of discount facilities
abroad and failure TO establish work
ing arrangements with the other SIDE
caused rates 20 rise again quickly Al
the end Of the week demand sterling
was quoted as high as $ 03. cables
AZ SIS 05 and cable francs al s. %.
in normal times we receive in the
early summer months little payment
from Europe for exports and remit
heavily on account OF expenditures o.
American tourists. But in August
shipments Of cotton and grain begin 20
turn the balance Of exchange the other
way. Dealers have been accustomed
70 ecualize rates through selling eX>
change early IN the summer agalns
the eXpectation that they could meet
their obligations when commercial bills
came into the market in usual volume.
This wear the currents OF trade have
beer turned aside, Europe is no longer
financing our crop exports, great
mass Of our securities have been un'
loaded in this market and many oD!l-
pations abroad due US have been eN'
tended By government moratorium. A
q result exchange dealers are caught
short Of the market. They must get
their CORRESPONDENTS abroad 70 extend
credit further or meet their obligations
IN gold. As things are at present they
are not sure that gold shipped VIII re-
turn with a change in the balance or
trade.
some gold we must ship or arrange
for on the other side, for securities OF
solvent corporations sold abroad ana
payable ia gold must be paid as prom
ised. Our credit in European markets
aust be maintained, for ability 10 Dor
row from the older countries IN the
future will depend largely on how we
have shown ourselves IN the present
crisis. Before the week had closed
Grain was moving abroad at the rate
Of million bushels q day, some ship,
-nents were being made Of sugar ana
corner. the Treasury Department had
announced its intention 10 make de-
nosits here TO aid the banks in finan-
cling exports and bill for federal ma
rine insurance was making satisfactory
progress.
Bank of England Aid.
The great European banks have, ac-
cording 10 cable reports, been justify
ing themselves iu these trying times
The Bank Of Englati, assisted by the
government guarantee, has Deeh as
counting until its stan has been almost
daily swamped by the pressure OF busi-
ness. Us weekly return shows loans
increased nearly e24,OOO,OUO, but Dul-
lion holdings were almost t5,OvJ'OOO
greater. showing that the circulation
81 notes on the low reserve allowed
bv suspension Of the bank act was
causing no pressure for gold. The per,
certage Of banking reserve dropped
only about 2 per cent, from lfOZ 10
1850. in spite Of the exceptional as
counting. The Imperial Bank OF Ger,
many. according 10 private adyices, hau
earlv in the week the largest metallic
reserve in It's history, IN spite OF IAN,
ure Of Germany 10 declare general
moratorium. The Bank Of France was
reported 20 be preparing 10 discount
hills in large quantities, and lowered
- official minimum from 20 per
cent The Bank Of Amsterdam made a
similar reduction in its rate, and the
~ = N'oru.ev lowered It's minimum