Evening star., 1914-08-02
War in Europe Imposes a
Financial Strain Almost
Unbearable..
INSTINCT TO HOARD GOLD
Is AT ONCE MANIFESTED
American Financiers Take Every
Possible Step to Prevent
Blow to Industry.

NEW YORK, August lon the finan-
cial markets of the world was focused
the full effect Of the weeks rapid spread
of the war cloud. While diplomatists dis
cussed and generals planned, the money
markets acted. Symptoms of the markets
were SO paroxysmal as to paint a vision
Of the breaking down Of European civili-
zation itself.
The warning there contained pointed to
a catastrophe so grave as to carry the
strongest incentive in itself to avert it.
Credits. international exchanges and COM
merce were disorganized. The very per-
fection Of the modern machinery of
credits, by building higher the fabric and
insuring against its reduction, had en-
hanced the disaster made possible by
its collapse. The peril Of the collapse
was shown in the loosing of the primitive
instinct to hold gold. which induced the
raid on bank reserves at the great money
centers.
Gold Raid Unparalleled.
This raid nullified all other considera-
tions. No parallel exists for the jump
from to s per cent made by the Bank
of England discount rate Friday, thus
making the exigency of the crisis. The
closing of the New York stock and other
exchanges was a like measure Of pro-
lection against the deluge Of liquidation
from old world money markets in their
desperate scramble for cash.
The cataract of the gold movement
swept out of sight the earlier calcula-
this country from Europe's troubles. The
hight OF wheat prices measured the re-
turn to American producers, computed
from the years enormous yield and the
factory. wheels to furnish supplies for
Europe's armies was predicted. Even
the sacrifice Of foreign holdings OF
American securities was read as an ad-
vantage by eager investment buyers OF
stocks. Such calculations gave way, how
ever. before the threatened subversion
Of the complicated credit structure Of
the whole world.
Owing to the closing of the stock ex-
change and the lateness in the week OF
the announcement. the interstate com
merce commissions rate decision made
little impression in the financial district
Other considerations lately prominent,
such as trust legislation, trade prospects
and crop conditions, passed completely
out of notice.
Iron Industry Affected.
The situation in Europe had a pro-
found influence on the iron industry In
tnls country this week. Business was
confined within narrower limits and the
export trade was paralyzed through the
withdrawal of foreign ships, high
freights and excessive insurance charges.
Financial uncertainties called for closer
scrutiny of credits and created some mis-
givings.
Prior to the foreign complications busi-
ness in rolled steel, notably steel sheets.
tin plate. standard pipe products and
fabricated structural shapes, was some
what improved. Total contracts for. the
week taken by the fabricating' shops
called for 5000 tons Of steel shapes
Railroad equipment orders were not
impressive. They included 10000 tons
Of rails. 2,6OO cars and few locomotives.
The Baltimore and Ohio practically
closed contracts for 5000 tons of rails
Miscellaneous orders amounted to 1900,
tons. During July the rail mills secured
orders for 237, 900 tons. The Minneapolis,
St Paul and Sault Ste Marie ordered
1900 cars, and the New York Central
1000 cars last week. making the total
purchases in July about 5000 cars
Extreme duilness prevailed in the pig
iron market during the week, but the
July sales were the heaviest of any
month since February. aggregating be-
tween $4,000 and 100000 tons.