The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-10-27
FINANCIAL NEWS
AND COMMENT
Foreign Exchange Market Gives
Promise Of Better Bust
ness Conditions.
SHARP FALL IN STERLING

Financial conndeno. that natters gan
orally are working In the RICH. direc-
ton FOR considerable expansion OF
American business activity was further
! strengthened Yesterday by tho course Of
the foreign exchange market. At thl.
time there could be no more important
indication Of the strength Of the Ameri-
can economic situation than that which the
international money market furnishes. and
its aspects have been increasingly favor
able OF late. Considering the strength OF
tho decline which took place in the last
week or so, sterling exchange had an all
most violent fan at the outset of the new
week, the extreme loss from Saturdays
level being about 3 cents IN the pound
German exchange continues almost un-
salahlc. Marks wer. quoted last night
at Ssiq for sight bills. and while the col
lapse In German remittance undoubtedly
measures desperate efforts to purchase
supplies here " Il coming to he more
widely Interpreted as a token Of the jude-
ment Of the financial world on Gcrmany's
status IN the war and It's probable eco
nonlic distress present and prospective
y far fetched conjecture might indeed be
tldt tho fall ia German exchange meas
ur"d forces which are working for ter
minatiou Of the European conflict fully
as effectively as the military pressure ap-
piled by tho allies
However that may he the exchange fea-
ture OF most concern to us at the moment
Is provided by tho return OF sterling bills
10 something like a normal level De-
mand sold down to i.seL yesterday after
noon, which was . cents below the open
Ing. and that was in turn a decline Of
almost n cent from Saturdays price. Ster-
ling cables after selling down 20 4S9ck
rallied late In the afternoon to 1904 bid
furry which testified TO a considerable
demand for remittance and suggested
that exchange might rally rather sharply
Some recovery would not he surprising
after so rapid descent, hut tho banking
community believes that permanent re-
taxation has set in. to be followed before
long by decline which will snow by the
turn of the foreig n exchanges in our IA
vor that our indebtedness abroad on cur
rent account has been cancelled and that
credit balances are accruing
At the low rates for exchange yesterday
the market was about on the maximum
level reached In previous periods when
there has been an abnormal dcraugement
OF International finance. Such "A level or
dlnarily takes gold out OF the country in
volume, but tho opinion ia now that ex-
change is moving away from gold EXPORT
points and that nothing Ike the aggregate
shipment provided for in the New York
city loan and gold fund agreements will
DE made
IL IL hardly necessary TO cite the grow
Ing export trade OF the country as one OF
the principal explanations Of the descend
ing foreign exchange market. Bankers
insist that figures OF exports do not be-
gin TO tell the story and that purchases
are being made here far more heavily nv
foreign countries than might be inferred
from port returns
In addition TO that there has been an
important process Of extending our ma
turing debt abroad for this month Lon
don bankers began 10 inform their debtors
hero that they would rather accept new
bills for them than receive payment OF
their account knowledge OF this fact
made Il little difficult for wall Street
a week ago TO believe that Great Britain
was as anxious TO have us export gold
In largo quantity M Washington des-
patches represented IN their versions OF
the Paish Blackett conferences with our
Governmental and financial representa-
tives.
Tho understandings reached toward the
end of last week In tho internat' onL con-
ferenccs helped also 10 improve senti-
ment which has played is part in the
course ~ foreign exchange. Another fac
tor Is denoted by tho outlook for the
early Inauguration OF the Federal reserve
banking system
While 1t is thought slat Secretary Nc
Adoo may be in excessive hurry In
trying to advance the date OF tho open
ing OF the banks from the end to the
middle OF next month. there Is a general
inclination TO lay most stress on the grent
advantages which the system Will confer
in tho way OF accommodating the un-
precedcnted strain of the times.
The release Of reserve money which will
Al. "A ~
discount facilities to he provided both so
20 make the matter Of gold exports more
academic than practical in view Of the
present tendencies of foreign trade and
the comfortable financial conditions which
have been established in London. Incl
drntally II might he noted that the further
relaxation OF foreign exchange rs likely
to stimulate banking disposition 20 post
pone consideration OF the problem of the
securities market 1t is conceivable that
developments In international finance may
furnish an almost automatic relief,
Trade advIces OF various sorts, but
especially rs relating 10 external COM
merce. We're distinctly encourag NC. Com
ment has already been made on this sub
tect IN reerence TO foreign exchange. but
attention was attracted 10 tho unsupported
proportions Of the current shipments OF
copper, II seems 10 be generally under
stood here that a good deal OF oil, cop
por ard other commodities has been
g1ing out OF the country. the ultimate
destination OF which was Germany.
shipments which may become involved
N bell!gerent controversies do not how
ever, figure in the more optimistic finan-
'ial reckonings These have regard
chiefly To the trade with which military
operatlone arc not likely 20 Interfere.
End In this respect the announcements that
Great Britain did not regard cotton as
contraband was particularly gratifying.
The various undertakings which have
been entered into 10 revive the cotton
market are all In q promising stage and
bid fair 10 add a very largo gam OF cot
ton shipments 70 the general export trade.
cuOpT TEpM NOTFS