New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1914-11-13
DEMAND STERLING
DOWN TO 1886 3-4
New Low Record Since Out
break of the War-Close to
Par of Exchange.

Sterling exchange yesterday made a
new low record since the outbreak of
the war, with cables breaking to 4s7ia
and demand checks TO 1861. At the
latter figure sight drafts were not only
nearly ga cents a pound sterling be-
low the extraordinary gold export
point of war times, when gold for the
Sank of England had to be sent to
Ottawa, but they were about Il cents
below the export point in times of
peace.
Demand sterling was so close TO the
par of exchange, which is S4.8665 for
a pound. that for the purposes Of
American debtors to England London
was brought as close TO New York as
Hoboken or Brooklyn. Yesterday
New York merchant with 100000 to
pay to correspondent in London
could buy what was practically a
money order for the amount and pay
no more for il than he would pay for
sovereigns in London. 1t was as
though the cost of renting funds 10
his correspondent and of insuring their
safety in transit were entirely elimi-
mated.
What was mainly responsible for the
sharp decline, according TO bankers,
was the announcement of ]. p. Morgan
& Co. and Kuhn, Loeb g. Co., acting as
managers of the New York City note
only Clearing House funds in payment
of the latest instalment of subscrip-
tions. This removed somewhat uneX-
pectedly an important possible demand
from the market, although il was
partly foreshsdowed by the shipment
of a considerable quantity OF gold to
Canada last week, when exchange
rates did not seem TO favor that OPP
GRAFTON. The city loan instalment
called for yesterday amounted TO Sl4,-
278,750. It will take care of all the
city's obligations maturing abroad in
the remaining days of November.
In December about Sl3 100000 will
come due, the bulk of il toward the
end of the month, including one pay
ment of about $4,000 900 on the 29th.
IL is expected that there will soon be
another call by the syndicate managers
on the banks that subscribed TO the
issue, and it was considered probable
yesterday that this and all subsequent
payments would be made in Clearing
House funds rather than in exchange
l or gold. Most Of the French maturi-
ties of the revenue warrants have been
paid off in this city. the amounts beiny
of the French government, according
to a report current yesterday. IL vss
, said also that the city had been able
10 discount at a favorable price
small amount OF notes payable IA
/ France on December "a.
Bankers were much impressed yes
terday by the fall in sterling exchange,
| though they were loath 20 commit
! themselves to prediction that il was
/ down permanently below the gold ex-
port evel Il was recalled that there
| had been other sharp breaks since the
var began, each OF which proved TO be
/ a false dawn so far as heraldlng a bet
I ter day was concerned.
! When the war broke out, about July
! "a, demand sterling was selling at ASS.
or practically the gold export point.
| The first jump into abnormal figures
/ occurred three days later. when the
I extraordinary price OF Az was re-
/ corded. There was a slight reaction
on the day following, but u lasted for
only few hours, and the closing days
! Of the month saw 50 pound sterling
an unprecedented figure reached
and passed.
In the first week Of August there was
/ no rate Al all The few banking houses
p lnar nau tNcuduSN ~ SKI Nii1A = - H'f
where from So 50 70 81 for il, but as "A
general rule they stopped dealing in
exchange altogether. Then the foreign
exchange managers Of the important
/ international houses got together and
attempted TO arrange working basis
/ for payments. For a time rates re-
treated below s5-in the second week
of August. But almost Immediately
thoy rallied from the higher 90's to
above the round figure, and they con-
tinued above IS until September s..
The range was from about si9i TO
s497. with prices oftenest nearer the
latter figure all through September
and until late in October. On OCTOBER
"a demand again got below 81 80, and
until Yesterday it kept fairly close TO
tha, level