The sun. [volume] (New York [N.Y.]) 1833-1916, 1915-01-11
FINANCIAL REVIEW
OF THE PAST WEEK
Big Swing Of the Foreign Ex-
changes in Our Favor Pre-
sents a New Problem.
HOW WILL EUROPE PAY US?

DEVELOPMENTS was contained in the
announcement made simultaneously last
Friday by the Treasury Department and
by the British Excheauer that the neEo-
tistions which we're az one time chsrac-
terlzed as the Paish -McAdoo conference.
had been discontinued. As the statement
put Il foreign exchange between the two
countrie, having become fpractic~lly
normal It is no longer necessary for the
two Governments to exercise their good
Offices in connection Herewith and any
further consideration Of the question
should be left to the banks and bankers.
II never appeared during these u, gotta
lions lust exactly what was aimed Al
nor how governmental interior nee was
projected into the situation. When Sir
George Paish ended his mission here there
was a feeling OF relief IN the banking
community because no EFFORT had beer
made to put into operation any OF the
curious schemes which were mooted from
Washington while the conferences were
on. II was also felt then THAI the nego-
tiatiuns had reached the point or dis
covering that there was nothing COVER n
mentally 20 be done because the inter
national financial situation was rightlng
itself Nevertheless II Va satisfactory 20
been made that affairs are IN shape to be
best handled by those most competent to
deal with them and to have Official recoE
milton given TO a fact which was the
signal financial phenomenon OF the frst
business week OF 1915.
Less than ave months ago sterling ex
change was quoted at heights which
showed that international finance was In
a condition % bed!am. Four months ago
Il was quoted around So to the pound
or from 10 TO IS cents above the Level
which would ordinarily force huge eN-
ports OF American gold. Nothing better
testifies to tho restoration OF order OUT
Of the financial chaos Of August and
September than the fall OF sterling re
mittance las, week 20 the lowest prices
since the 1907 panic with every iud!ca-
ton that before long an extraordinary
gold import point would he reached and
passed and sterling bills would be selling
below $50 Also IL might be added that
every form OF exchange remittance be
tween this country and others Is In the
same condition and exhibiting the same
tendencies.
Not only. therefore. does the course OF
foreign exchange testify to the highly
encourag ng progress made IN adjusting
our finances TO the circumstances OF the
European war, but Il ~ evident that the
United States has acquired a dominant
IL not altogether controlling position In
the markets " the world. Cotton IL be-
ing exported In quantities exceeding the
shipments OF the CORRESPONDING period a
year aso and exports Of wheat AZ record
prices from huge crop the greatest the
country ever raised. are a reminder OF
, previous occasions when a similar aEri-
cultural factor has realized for US a
prospect of prosperity which those who
foresaw II hardly dared to believe in
The nations OF the earth are turning &c
us for supplies OF commodities both for
the purposes OF war and f-r the pur'
poses OF peace. and what Is more are
turning TO us for supplies OF capital.
We are in large part reapng the re-
wards Of accidental fortune but we have
earned something as well. The brighter
outlook OF the current year ~ rot owin2
wholly to our neutrality in international
politics TO the favor Of nature which gave
us splendid crops in 1914 and TO the vast
material resources and equipment which
enable our energetic population to pro-
duce more goods than IL can consume
Very much is owing to the intelligence
and courage with which American hnanct
| and business proceeded last autumn q
| preserve the country's credit ard 10 pu
I trade and industry in shape TO take sd
vantage OF the opportunities which M
war was bound to ofer, an undertaking
! assisted by the energy and saEacity viii
/ which the transformation OF the coun
| try's banking and currency system wal
| begun.
| Possibly the foregoing consideration
were what was chiefly reflected in th'
greater activity ard increased strength
/ which the Wall Street securities marke
| displayed In the week past Nevertheless
while every reckoning OF events in recen
years and every prudent estimate which
can be made respecting the outlook sus
| gest that the underlying trend OF Amer
can values Is toward recovery and ex
! panson, anticipations OF improvement car
| easily become premature and there cal
| readily be an exaggerated expression o
/ the tendency OF values. The war has IN
way already become stale news to IN
| stock market, which would like TO sug
gest that the thing To be discounted nov
| is peace but men OF affairs will not 81
promptly dismiss tho war from their cal
| culatons They will keep II N mind a
| a most uncertain factor, not only an un
known but an unknowable quantity. an
L they will not forget that the strait
II abroad on account OF Il persists and In
creases and that Il can evoke unfavorabl
responses here unless our forward step
are taken carefully.