New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1914-10-27
EXCHANGE BELOW
THE GOLD POINT
Drafts on London Almost
as Cheap as Before
the War Began.

Of the war sterling exchange rates yes
terday got down below the gold export
point. Demand touched a figure OF
4.S9M at the lowest. or barely a cent
higher than tho gold export point In
normal times, when there are no
extraordinary insurance or freight
charges. II closed at 4.S9b, with
cables ut 4.90lz.
In less than ten days the price of ex-
change on London has fallen cents in
| the pound sterling, range wider than
in ordinary times 10 ever recorded be-
tween the highest and lowest of any
years market In recent years about
the lowest price for exchange that has
been known was the 4S2k in the panic
of 1907, and the highest-except the
war period-the 4.S9 of juno II this
/ year.
To bankers one OF the most interest
/ ing results of yesterdays break in eX-
change was that il checked, for the time
J sc least, profitable, If restricted. spec
ulation through sending gold 20 Ottawa
! for account of London and selling ex-
/ change against il. For some time the
export point to Ottawa on gold which
| is credited as though laid down in
Z AOHuOn nAo bNtH AtNhVhtu oN NstN - .
| and so long as exchange rates ranged
we'll above that figure it was worth
while for those who could get the gold
/ here to ship it TO Ottawa and sell bills
against the credit thus established in
England. II tho gold had actually been
/ sent to England II would have cost
about two pence IN the pound more TO
/ ship IL, but allowance was made for
/ that by the Canadian consignee.
Because Of the difficulty of getting
gold in this coun .ry-the banks IN this
city not paying cut any in their ordi-
nary dealings ia order to conserve
| their lawful money reserves-there
/ has not been much speculation OF this
kind, but now and then some OF the
smaller banks have collected enough
gold certificates TO make the operation
worth while and have exchanged them
81 the Sub-Treasury or the Assay Office
for coin or bars. In some instances
/ banks have collected gold certificates
through agents in San Francisco, where
4 the certificates are in free circulation,
/ have deposited them with the Sub
/ Treasury there and have obtained free
/ transfer of the gold they represent to
New York. with the credit established
at the Sub-Treasury here they have
purchased gold bars, and, sending the
bars to Canada, have been able to sell
2 sterling at a price high enough to net
them 2 per cent on the transaction.
! Besides the gold coin withdrawn at
J the Sub-Treasury early yesterday for
export TO Canada there was an engage
ment of gold bars at the Assay once
but this was cancelled when descending
q exchange rates sent prospective proiits
/ flying.
In the great variety Of reasons. as
cribed for the fall in exchange, when
4 in three days amounted to nearly twice
as MANY cents in the pound sterling,
were included the fact that the Fed
eral Reserve banks are to be opened
in three weeks instead of five, and the
amount of reserves to be released VIII
be. in the opinion of the Secretary OF
the Treasury, Si25 100000 larger than
was at first supposed; the announce
ment by Great Britain that she would
rot regard cotton sent to Germany as
contraband Of war, a fact that VIII IN
crease the exports of the crop and the
exchange drawn against them; the
realization that Germany is not block
AIDED and that large quantities of mu-
nitions Of war and other goods are pc
ing bought continually in this country
by all the great powers, and the publ
A cATlC OF the Ddlh fldltulNHN ioHN heN
urday, showing not only a surplus IN
place Of a deficit in reserves but the
largest surplus of several years ct THIS
! season.
! Besides the reasons given or as an
! alternative to them, dealers said yes
terdav that they believed the heavy Of
! ferings by many of the banks repre-
/ scented short selling such as there was
/ in June. At that time exchange was
unusually high and the prospect for
! large crops was so bright that num-
/ Der of institutions went short OF eX-
change. thinking TO cover their bills in
I earlv Sertember when exports would
| be numerous and exchange making
] fast. The war changed everything, but
I there is d feeling in the Street that,
with the heavy purchases which all
! Europe is making in this country ana
must continue TO make, the opportu-
nity has been renewed.
/ For the time being the gold fund
committee will make no further effort
! TO send gold to Ottawa, because of the
/ loss that would ensue with exchange
rates below 50 90. Yesterday checks
were sent out to the contributing
| banks for the exchange sold against
| their deliveries of gold Members OF
| the committee declined to make any
statement of how much exchange had
been sold altogether against the SlO,-
100000 sent to Canada some time ago,
but it was said in other quarters that
the amount was about s3,0000O0 It
was said likewise that there was g good
chance that no more gold would have
90 go, the tide of international trade
apparently swinging around rapidly in
| favor of this country.