The Birmingham age-herald., 1914-08-01
The Effect In This Country

Finance did respond instantly to the warlike demonstration and this response was felt at once through ocean cable com munication, in this city. The curious ano volcanic suddennness and magnitude o1 the effect upon the foreign exchange mar ket caused general comment, the quota. tions having been without any precedent It was commonly said that tendency of that kind could not be continued long without causing some paralysis and might result in actual chaos.
 The instant effect of this disturbance, as that was felt in the United States, was reflected by the acton taken by th' National City bank, of which MT. Wander lip is president and which has far reach ing international relations. The bank se cured large amount of gold and ex. ported it immediately. Other exportation: followed and presumably will be contin ued until as much as $100.0O0,000 of gold i: across the sea, perhaps more.
 This is not a larger amount than any other movement of gold which ha' crossed the ocean. We received in lS99 principally from London $10000O,oo0 O gold. This large importation was mad possible by the great increase in tn worlds gold supply, which followed th' opening of the mines in the Rand distric in South Africa. At that time, however there was curious phase of our interna tional relations such as is not to be ob served at the present time. Then Grea Britain and the continent of Europe wer, selling American securities in enormous amounts. The late Frederick D. Tappan who at that time was chairman of thu clearing house under whose personal su pervison the $10o0O 0,000 of gold was re ceived and stored in the clearing hous vaults, said that he was convinced tina the United States had absorbed within { year or two American securities aggregat ing about $1 ,00O, 000,000 and had thereby re duced our indebtedness to Great Britaii and the continent of Europe fully one third. Yet in spite of this sale abroad O American securities, we were in condition to command $1Oo000,00O of gold.
 Now American securities are sold il large amounts, but we are not, as we dit in 19O9 importing gold, but are sendins approximately s1Oo, ,0Oo.oo0 in gold abroad.
 A Supreme Test
 No one, can tell what the ultimate ef feet, or even the effect soon to be ob served, of the European situation upoi the United States will be. But nothin' short of chaos is likely greatly to depre ciate the quoted values of American SC curities. There are several things tha are now of influence which may tent somewhat to aggravate the situation On of these is the Claflin failure. That doe occasion some anxiety. The exact situ ation does not appear to have been mad clear, There are many banks in tn United States which are wondering hoy much they will have to charge off on ac count of the Claflin paper they hold Tn experience is likely to prove of value t the banks for it may tend to check tn disposition somewhat indiscriminately t buy commercial paper simply on the credi of the name which is upon that paper
 The Claflin failure is not a purely loca matter There are elsewhere institutions independent, nevertheless are known t have been in the Claflin business family There is no doubt of the solyency of thes institutions. so far as their direct man agement and localized business are con cerned. There is some wonder about tn extent of the indirect harm which ma, have been done to these institutions Whatever the ultimate issue of this fail ure-and there are strong hopes that th' creditors will receive 100 cents on th' dollar-nevertheless 1t does occasion som' embarra ssment which is increased b, reason of the European situation.
 Then, again, contemplated legislativ, action, the measure trust law now pend ing before Congress and the anxiety which these measures are giving to business men-an anxiety which is sincere and moi assumed-together with the hestating state of the business mind, especially ir