New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1914-09-21
City Loan Lowers Foreign
Exchange Rates and
Brings Out Gold.
NATIONS RESERVES
TO BE Modified
Field of Trading In Unlisted
Bonds Enlarged - Rate
Case Rehearlng.

Inc last week saw definite accom-.
Plishment Of steps that had been long
IN preparation toward relieving tho
hnanciai strain. The new city loan float.
/ 60 TO pay for warrants held abroad
0'ought out heavy subscriptions from
/ this country and Europe and the in
it'AI shipments of gold to Canada TO
ms credlt OF the Bank of England we're
I louowed by decline in the price of
/ sterling exchange. Following the cali
o. the Controller of the Currency for
/ reports on condition of the national
banks, that made evident the undue ex-
: tent To which the strain of foreign
. payments had fallen on the institu-
tons of this city, the federal authori-
ties agreed to the plan OF country
! VIDE subscription by reserve cities to
I gold fund for common needs. This
must mean assistance for New York,
/ where the reserves of the banks have
been drawn on so that the deficit of
I Clearing House institutions stood at
. ever $4,000 900 last week.
Investment conditions so improved
that it was deemed safe to remove the
I restrictions on trading in unlisted
bonds owned by dealers The Inter
tate Commerce Commission recognized
!hc needs of railroad credit by con-
senting to q reopening of the advanced
rate case of the Eastern roads. A
favorable decision, which is expected
should minimize the amount Of for
eign selling of securities when the
exchange is at last opened.
The fortunes of war in Europe hung
doubtful for seven days of fighting
As the resumption of security trading
here must wait on London, defeat by
the Allies would mean further delay
7 20
be considering plans for general secur-
ity trading within a few weeks, but no
definite result was reported, and it is
probable that the battle being waged on
the soil of France will have great in
tiuence on the final decision. General
business in this country showed the
depressing effect of restricted credit
and readjustment in low bank clear
ings and an increased number of fail
ures, as we'll as in smaller freight
shipments that reduced gross railroad
earnings.
Foreign Trade Upset.
Our foreign trade is, of course, par
ticularly upset. The excess Of imports
ever exports for August, Sl9,000,OOO,
was much greater than had been eX-
Tected. Our shipments of S1l0,O0O,OOO
were S77,O0O,000 less than in August
VI last year, but the receipts of $l29,-
100000 were only about SlS,0O0,OOO
lower, surprising even though the et-
fects Of war were more Immediately
apparent on exports, which are figured
as they start, and though release OF
goods from bonded warehouses here
was unusually large. Our exports of
cotton were valued At only 100000,
against some S16,000,000 last year, but
hreadstuffs went out to the amount Of
nearly 100000 more than in 1913 and
shipments Of wheat and flour for Sep
TENDER have been unusually heavy.
Detailed bank statements of indl-
yidual institutions here showed the et-
feet Of the present strain not only in
Lowered reserves, but in Clearing
House balances owed by some and
cwed to others that represented as
sistAnce grated members on whom re-
uuirements had been heaviest. Re,
serves here, of course, will be increased
and emergency currency and Clearing
House certificates retired as commence
is restored. On former occasions OF
lowered gold holdings here one great
source of assistance was Europe, winch
now is cut off. Interior banks up to
last week had been giving little assist,
agce. culling out notes backed by gold
before shipping currency here, but now
that the Controllers figures are show
iop the strength of the position OF
outside cities apprehension Is lessen
ing and the gain of gold from the IN
terror should increase.
The Federal Reserve act, through
;uobilizing our banking reserve, was
intended to aid in correcting such a
situation as the present Inc system
is not in effect yet, and actual prepare
tions for installing the regional banks
Ind engaging Office forces must take
considerable time, so the desire here
i 10 see merely preliminary steps
taken. so that when it seems wise the
} new law can be put into effect without
delsv No immediate relief may be eX-
nected from this source, but the pro
posed gold pool by voluntary subscrip,
= zion should enable the Reserve BOARD
10 do informally through direct trans
| Ger of gold what it later VIII De EN-
| T,overed to do when regional banks are
| In operation through ordering them 70
rediscount for each other.
Railroads Hope for Advance.
The Eastern railroads are preparing
| their case for advanced rates, now that
a rehearing has been allowed. ne
! roads seem we'll supplied with new
! arguments to bring about reversal OF
. the former adverse decision. In adoi-
tion TO the effect of the war on current
p earnings and future financing, they caH
how a decrease of around Il per cent
in operating income for the fiscal year
ended with last June. While reports
IA TO assurances of an immediate ad-
vance are probably too definite, at the
. the same time there seems reason TO
believe that the needs of the carriers
that divided the commission at tins
former hearing will appear now so
pressing that the advance may be OBJ
, tanned, even if only as temporary
measure.
To meet the needs of government
} revenue, Congress, after considerable
vacillation, has apparently realized the
superiority of stamp tax as an I'M
= mediate source of funds, and mas
, abandoned the proposition for imposts
on freight charges, AS well as that 'of
extension of the income tax. In our
lesser emergency, our legislators can
] not rise above the influence Of party
noIitics. as those of the warning Euro
Mean nations seem to have done. Here
the effect on the coming fall elections
nat he considered in every rellet
measure. So it has been difficult to
scale down expenditures. of which the
river and harbor bill is notorious
Example, and it took time to bring ad-
,ninistration leaders in Congress to
consent to any tax that would De d.
aIN