Grand Forks daily herald., 1915-08-31
Rates
STILL LOWER; At
CRITICAL STAGE
Almost Reach Point Where
English Will not Buy
in America.

New York. Aug. 31.-Foreign ex-
change rates reached their most SER
ious stage with an over night break
of two and one-half cents, sterling.
the English pound selling in this
market at $4.58 1-2, close to the mark
where curtailment of the big foreign
orders to the United States would fol-
low. In the opinion Of bankers here.
Nothing like this violent break In,
the quotations has ever been record,
ed In the foreign exchange markets
here before. The low level reached
today was one and one-half cents be-
low the mark set week ago by the
financiers. the so-called irreducible
minimum. which, when reached.
would cause British buyers to seek
other markets in which to place their
orders for such imports rs could be
obtained elsewhere than in America.
Foodstuffs, manufactured goods, and
many other products in fact, almost
everything except actual munitions Of
war; are embraced within this cate
CORY.
Decentralization in the foreign ex-
change markets was succeeded by al
most chaotic conditions as a result of
the break.
Dealing in foreign exchange vir-
tually Is at standstill. Rates vary
ing as much as cent, are quoted by
different houses, but these rates arc
in almost every case purely nominal.
There was no business worthy Of the
name done in English money here.
The big break means that English
buyers. in addition to the top market
prices already paid by them In this
country. for American products, are
called upon to pay a premium Of
2s.h cents on every. pound worth Of
purchases, or more than Ave per cent.
With London carrying this enor-s
nous. burden, something new to the
British bankers, as English money for
generations has been the worlds
standard of international finance.
the question is discussed in banking
circles here as to how long Great
Britain would continue to buy here
such articles.
There are no other world markets
open, it is pointed out, but more rigid
economy at home in all imported arti-
cles purchased by Great Britain from
such European neutrals as had wares
to sell. would undoubtedly result II
the exchange rates should 20 lower.
This would result in leseening to an
extent which cannot be estimated the
amount of goods which American
sellers are sending abroad, now the
greatest in volume in the history Of
the United States.
10y Luigi ld1zatCl, formerly lCduan
Minister Of finance.)
Paris. Aug. 31.-A financial alliance
between the allies Is urgently needed
for the mutual protection of their
markets. The pulse beats Of France.
Great Britain, Italy and Russia-that
is, the exchange rates-give no true
indication of the health of these ma
tions. Extraordinary measures must
be taken Immediately if Europe is to
avoid monetary absorption by Ameri-
ca
England and France must remain
the leaders Of the worlds money mar
kets. 1t 10 illogical and false that
Germany's rate for exchange should
SO closely approximate that Of France.
The difference ought to be enormous.
Financial and business alliances are
always more difficult to make than
alliances of hearts and armies. but
the allies must build up this neces-
sary rampant. The great banks must
get together and provide monetary
peace.
The treasures Of France. England,
Russia and Italy ought to organize .
great central institution to take care
of their national debts and remove the
wide difference between their rates Of
exchange due to the huge note cir
-