New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1914-11-13
FINANCIAL RECORD
HERE AND ABROAD
Demand Sterling at Nor.
NAL Levels Again-Paper
for RediSCOunt.

Sterling exchange. which in its for
mer abnormal heights had marked the
crisis through which we were passing.
broke further yesterday 20 the lowest
quotations since the outbreak of war.
The Federal Reserve Board announced
Its definition of commercial paper
eligible for rediscount in the regional
banks, on which the new reserve cur
rency is TO be based. Trading in UNI
listed securities, now thrown open.
was in an encouraging volume. at
prices that compared we'll with those
at the end of July. Financial senti-
ment was more hopeful of arrange
ments between the banks and Stock
Exchange authorities in preparation
for full resumption Of security trad
ing.
The Federal Reserve Board. feeling
the necessity of wider credit for bust
ness. did not, as had been expected,
discriminate in favor Of two-name
paper, on which would appear names
OF buyer and seller. Instead. il placed
on the discounting bank the duty of
determining that notes offered for re-
discount should meet the requirements
OF the law arising from actual COM
mercial transactions in commodities.
speculation,
10 add 20 capital or for investment
are, of course, not available This
means that approved paper will be OF
nature that should be met on matur-
ity as the commodities for purchase
of which il was created are absorbed.
The volume of such obligations rise
and fall with the amount of business
transacted, and so the currency based
upon them should bring into our none
tary system the element of elasticity
which il has lacked.
To what extent this privilege of re-
diScounting will be availed of at the
start is a question. Officials of the
local regional banks do not expect any
great amount of business at once. The
commercial paper market, however, is
already feeling some stimulation, as
banks with idle funds seeking employ
ment realize that here they have OPP
portunity for investment in quick as
sets, such as call loans with the Stock
Exchange closed no longer furnish.
The Federal Reserve Board warned
against too great relaxation of our
money rates, while we must use every
effort TO prevent undue drain of our
gold to Europe. The price Of money
in the local market is still far above
that in London, though yesterday new
call loans were generally made at 61s
per cent, and time accommodation was
offered at the same level. Mercantile
paper passed at from 5l2 to 6l2 per
cent.
Demand sterling, which on Tuesday
had closed at 4.90A, got down below
4S7, more than 8 cents in the pound
under the present export point throu gh
Canada. Purchasing was light, AMI
dealers who had been accommodating
exchange to be sold 10 furnish ray
ment for New York City's debts
abroad found that the managers Of the
syndicate had already bought what
they needed Local financial institu-
tions were asked in the call for ray
mcnt of their subscriptions to the cry
loan issued yesterday TO send n
checks payable through the Clearing
House instead of gold or exchange.
The Bank Of England in its weekly
return showed improvement checked
because of the requirements az The
expiration of the moratorium. The
banks percentage of reserve was a
shade lower, loans to the money mar
ket increased and bullion holdings
were around 100000 under those of
the week before. The net disturbance,
however. incident TO the ending Of the
moratorium proved slight.