The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-08-24
FINANCIAL REYIEW
OF THE PAST WEEK
Increased Confidence Every
acknowledgements Dis
appear in Crisis.
EXCHANGE BIG PROBLEM
Shippers Still Need Assurance
That They VIII Be Paid
for Cargoes Abroad.
EXCHANGE BIG PROBLEM

review ~ the financial position Inst
week cannot fail TO mark continued I'm
settlement everywhere. So far II must
be admitted only moderate progress has
been made toward a restoration Of APP
trade and particularly the machinery Of
credits. But so complete was
tho breakdown OF the tremendous err
sanizstion represented by the clearing
house OF the whole world In London that
II may be questioned II II is not too early
to look for definite progress.
But there is some consolation for the
painfully slow recovery from the shock
delivered by the outbreak Of the Euro
pean war In the calm and businessliks
manner in which the obstacles are being
hero and in the knowledge that
all the energies Of the Government and
our leading banding and business men
are being directed upon the problems. The
task Is an enormous one. Problems arise
daily. even hourly, and under all the
that there Is tangible i'm
provement ~ all should be considered
gratifying.
Outside of the growing realization OF
tho immenHty d the problem before the
financial world and OF increasing signs
Of the gradually widening area disturbed
BY the European war. financial attention
centred upon the various plans proposed
and actually adopted to meet the needs
Of the situation That thess measures
are experimental b obvtoua That some
Of them may fall 70 produce the desired
results Ia admitted. Some even aroused
hostile criticism In this class was the
Governments scheme for establishing an
American mercantile marine. Exception
was taken to this action not because IL
was not an admirable thing In its,1f, but
on the ground that neither the time nor
tho circumstances make such a step adj
But In spite OF such differences OF opin-
ion one main factor makes for increased
everywhere. and that Is the
evidence that the late spirit OF antago-
nism between business and the Administra-
ton has disappeared in the present crisis.
Our foremost bankers and business men
arc now working in collaboration with
tho Government officials. including the
members of the new Federal Reserve
Board. in an endeavor to straighten out
the tangle. II 10 comforting to know
that at least tho majority OF the steps
taken Will be with the consent and at
the advice Of those whose training and
ability make them best f,tted to Judge
The orux Of the situation u tho condi-
don Of the foreign exchange markets.
which are still absolutely abnormal This
state Of Affairs has been brought about
by the congestion in London. Until Lon
don resumes TO some extent its former
function a. the clearing house OF the
world II IL hard to sec how matters can
mend greatly. II is true that small
amount of exchange business has been
done between the two centres. but this
has usually been As the result Of spe-
cial Arrangements. The difficulty in Lon
don Is not simply the breaking of of
exchange communications with New York
but that q similar paralysis prevails In
regard TO her communications with the
continent Of Europe, with her colonies
and with practically every portion OF the
globe,
bills last week. but this made practically
no impression upon exchange rates, show
ing plainly that an enormous demand for
exchange exists hero This. In large
part, comes from the big "short position"
Bankers who sold exchange this season
In anticipation OF the usual exports OF
cotton. grains and other commodities find
themselves locked In. London Is unable
to finance our cotton crop and the Gus
tomary means OF covering are absent. An
other complication has been tho neces-
sity OF RENTING to Europe against APP
preaching maturities Of New York oity
warrants and interest due on bonds of
various corporations held abroad. All
last week local bankers considered plans
to ,iquidate the New York city Indebted
meas abroad Many conferences were
held. hut no far nothing appears to have
been decided upon. One Of the devices
known to have been discussed 10 an Al
tempt at renewal by means OF series
Of short term notes ~ An unusually nigh
rate. -
An instance Of tangible Improvement
was presented by the Increased exports
OF wheat Shipments of wheat Increased
steadily day by day. and tho total for
the week was about equal TO the same
period a year ago. II must not be sup
posed. however, that this indicates any
thing like the return OF a free export
movement As matter OF fact, most ~
the wheat moving Is bought by English
firms with branches on this side or In
connection with the establishment OF
special credit on this side. These trans
actions are not OF the sort TO cancel
our Indebtedness abroad. Moreover. the
case OF wheat Is exceptional An almost
complete deadlock continues with respect
10 cotton and many other commodities
which usually go abroad In great guam.
titles at this season. Nevertheless, II Is
patent that a beginning has been made
for the reopening of our foreign trade on
liberal scale. and since the food. prob
lem abroad will become one OF steadily
increasing prominence II Is certain that
London will make great efforts to es-
tablish proper means for payment
Secretary OF the Treasury McAdoo, by
placing several millions OF dollars in the
q ~ In
creas'ng tho supply of credits available
for the exporter has helped the situation
to some extent. But the principal reason
for the continued interruption OF foreign
commerce Ia the state OF tho financial
markets abroad, which are such that the
exporter here has no assurance that hs
will be taken proper caro- Of at the other
end, This is matter which must be
settled on the other side OF the Atlantic
One Of tho objections TO the hurried
organization Of an American mercantile