Aberdeen herald. [volume] (Aberdeen, Chehalis County, W.T.) 1886-1917, 1914-11-03
". S. Cousins, Editor, Says Improvement in
Foreign Exchange Has Been Gratifying fea-
ture of Financial Situation
MONEY MARKETS STEADILY IMPROVING
Cotton N0nC0ntrabdnd Contributes to Improved
Conditions - Bankers Have Solved
vexinQ Problem

NEW YORK, Nov. 1-Ameriican
bankers this week had the satisfaction
Of seeing exchange rates between AM
erica and London reduced to a point
below 400 both for demand bills and
for cable transfers, thus establishing the
low record since the outbreak of the
European war. This was extremely
gratifying to them and is indeed an
objective point towards which they
have been bending all their energies
for a period of three months or more.
In certain qarters there has been a
disposition to credit the return of nor
NAL conditions in the foreign exchange
market to the announcement that Great
Britain would not in future regard cot
ton and cotton products as contraband
of war, but would permit the shipment
of such commodities into the hostile
countries if desired. This is but one
contributing element to the situation
however; and to the skillful and de
voted efforts of the bankers of the
money centers of the United States
must be ascribed all the credit for hav
ing so carefully and so thoroughly re
constructed the shattered fabric of the
mechanism of foreign exchange opera
, tions, that exchange rates came tum
bling from their high point of 700 tt
within Is points Of normal in com
paratively short time.
How It Was Done.
The first step in this process was ir
the providing Of $so,oO0,o00 in gold te
! take care Of New York City's short
term notes which were due in London
a month after the outbreak of the war
Hardly was this arrangement effected
when it became necessary to organize
the financial lenders of America to
provide gold fund OF 500, 100000 as
a further bulwark for the exchange
market. This is the whole story as
told by the newspapers and by general
rews agencies.
But even these great undertakings
were not of themselves sufficient to
restore complete confidence in the in
ternational money markets, and out
side of the organized movement many
of the bankers gave their time and
their funds in private transactions
which made up tremendous total.
1t should be remembered that what
ever we owed in foreign countries was
due to private people, and not to gov.
ernments as such, and thus we were
afforded many opportunities to balance
credit for credit and commodity for
commodity, thereby reducing to large
extent the Indebtedness the liquidation
of which necessitated such an extern
sive propaganda.
1t is recognized in financial circles
that the adjustment of the general
financial situation at home was de-
pendent upon the restoration of nor
NAL conditions in the foreign ex-
changes to just such an extent as has
been accomplished
Cotton Situation
The new aspect of the cotton ex-
port situation is important in that
as long as we can export cotton to
European markets it will be unneces-
sary to send gold to make up our
adverse balance of trade and pay over
obligations. Hence the long
strides that have taken place during
the last few weeks in adjusting the
cotton problem as a whole are par
ticularly significant. These various
steps that have taken place or at any
rate are in progress include, in addi-
ton to the action just announced by
definite steps for closing
out the old commitments of New
York Cotton Exchange members and
permitting that organization to re-
sumo business in an unrestricted way.
Still further, the banks of the coun-
try will undoubtedly fall in with the
plan which has already received the
of the federal reserve
board and which provides for the for
nation of a 35,0O0,OOO banking pool
to enable the surplus cotton crop to
be carried until needed by spinners.
1t is attacking the problem at both
ends when, as the result of the Brit
ish governments action, the physical
resistance to cotton exports has been
removed. while at the same time am
pie banking facilities for Eying ]