The Wheeling intelligencer. [volume] (Wheeling, W. Va.) 1903-1961, 1915-08-17
VIRTUALLY ALL FOREIGN EX-
CHANGE WENT DOWN
TO NEW DEPTHS.
Dollars Instead Of Pounds Sterling
Made Standard For War
Contracts.

NEW YORK, Aug. t6.-The Am
eriean Dollar ruled the financial
world today With an Iron Grip.
Pounds Sterling, francs, iires, vir-
tually all foreign exchange. went
down 20 new depths In a torrent
OF bills that poured into the ex-.
change markets from American
manufacturers seeking pay for the
big war contracts OF munitions and
other supplies purehased here by
the warning nations Of Europe.
Coineident with the startling de-
cline In exchange rates, came the
assertion from an unlmpeaehable
source that every contract made
by the American manufacturers
for supplies sent abroad called for
payment In American dollars and
not English pound sterling which
have heretofore been the standard
OF finanaee the world over. The
Immense losses, therefore, due 20
the decline In foreign exchange
rates will be borne 10 the last
penny, by the foreign buyers and
will not be sustained by the Am
ertean nanufaeturers-a situation
exactly the opposite Of what had
heretofore been the popular belief.
The maximum depreciation today In
pounds sterling was 4A per cent. below
normal: in francs. nineteen per cent
below normal; in Italian lires twenty
five per cent In the money markets
today the pound sold for only $4.64
6.O2 francs eQualled a dollar: and a
dollar purchased Gas Ires. These
were the quotations while rates were
aN he akh q
ternoon. In the last hour of the bust
ness day the presence in Wall street
OF ]. p. Morgan for the first time since
the attack on his life six weeks ago and
an informal conference of bankers "a
consider the exchange situation, sent
rates upward.
Probable Remedy Considered.
Sterling closed at 467lA, a point
higher than IL opened and a point and
a half under Saturdays close, which
established a new low record at the
time. Francs gained three points over
the low record. selling at 599 at the
close and lires rebounded a point,
closing at 6:47.
What to do to remedy the situation
engaged the attention OF bankers with
international connections at their in.
formal conference late today. II
was decided to do nothing. chiefly
because the remedy lay across the
ocean with the foreign buyers. Thev
and not the American sellers, IL was
clearly established. were the suffer
ers and theirs Il was the consensus
of opinion, should be the task OF set.
ting the money markets to rights.
How this would be done. however.
was the object OF keen consideration
and some speculation. II was gener-
ally believed that the present abnor-
nal situation would not be permitted
10 last long. The obvious remedy
seemed to be TO sell American Sc
curities held abroad and when this
contingency was studied the situation
seemed to be pregnant with unique
possibilities.
American Securities Abroad.
a great many million OF American
securities. payable Of course in dol
lars. when due. are held abroad. CHER.
ly high class railroad bonds and pre.
ferred stock Of a selected list OF Ameri
can industrials. Should these securi.
ties be sold at the present exchange
rates In foreign markets they would
fetch far more than the purchasers
paid for them. due entirely to the de.
preston OF exchange.
Thus, a $1,000 American bond sold
In Paris al par would. on account or
the prevailing exchange rate, BRING
approximately 5000 francs when pur.
chased AZ par a year ago. Il cost the
purchaser approximately $3.50 francs
The net profit would be about 800
francs. or about 10 per cent. the per.