New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1915-09-02
STERLING RATES
DECLINE TO $50
Confidence Develops on
Discussion of Britain's
Remedial Plans.
FRENCH AND ITALIAN
QUOTATIONS STEADY
Interference with Americas For
eign Trade Predicted Unless
Situation Is Kept in Hand.

Tho prediction Of foreign exchange
experts that rates would 60 still lower
were borne out yesterday b. a decline
10 $50 for sight drafts on London. n
drop Of moro than cents in the pound
from Tuesdays last quoted price
There was every indication at the open
ing Of a thoroughly demoralized ma
ket. bur later short covering and sell
ing Of American securities held abroad
caused recovery 10 4.55 at the close,
with cables quoted a cent higher
There was less talk yesterday that
rates would fall so low AS to result in
any curtailment q American exports.
Discussion centred on Great Britain's
remedial plans. none Of which. New
York bank rs say, is yet known here.
It was assumed however. that the CON
templated credit loan 20 he established
would be of such proportions that it
would be a national rather than ANEW
York affair, in respect TO participation.
Bankers from all the reserve centres
Of the country, il vas thought, would
loan. The collateral, it was said,
would probably consist not only of ap-
proved American securities. but of
high grade Canadian and South Ameri-
can bonds as we'll In addition to this
collateral bankers here plan TO have
the British borrowers cover their loan
with an issue Of notes a. additional
margin
Optimism after p. VI.
For reasons not seen on the surface
more optimism prevailed last night
over the situation than was fore
Swallowed by the excited action Of the
market during the day. A persistent
report prevailed that relief was in
sight. L was said that the delegation
of British Treasury officials and
bankers sent here to mend Englands
battered credits were almost within
sight Of land. The blue pencil Of the
censor has crossed out all news of
their departure from the other side,
how
While sterling suffered most yester-
day other foreign money showed little
fuctuation in value. Francs were
quoted at sol, a decline of only half a
cent; Tires were off two cents at 6.53,
while reichsmarks were stronger at
805s
The rally in the afternoon session
sent prices upward almost as fast as
they had tumbled From the extreme
of $50 sterling made its
way by well marked leaps to 4.55i2,
and finally closed at half cent under
this figure. Francs dropped at
single stroke from SOB to 500, reach
ing their lowest value. Lires lowered
around 6.53, approximately 20 per
cent below their normal worth.
Reichsmarks zig-zagged between SOS .
and sos The widely divergent quota
tions at the opening and at the close
were ascribed by one banker largely TO
spectators. This view. however, was 4
not generally accepted and there were .
that there had been large
dealings IN small amounts after sterl-
ing had strengthened TO 4.52.
Unusual Efforts Needed.
The National City Bank in its Au-
gust circular devotes much space 10
the exchange problem, and says that It
will have to be met with unusual eff
forts if the situation is to be kept IN
hand. The prediction is made that If
il is not kept under control there is
likely to be a serious interference with
our foreign trade.
There is no doubt" says the letter,
that rates have been sustained in /
material degree by the common eXpec-
tation that arrangements would be al
fected for stablizing exchange on some
thing approximating the normal basis.
The situation. however, has been stead
ily becoming more critical, and some
plan for dealing with 1t
is required. The season IS now at
hand when agricultural products should
20 out in large quantities, and the ag-
gregate movement Of exports IN the
next four months should be heavier
than ever before known. But they
cannot go on, Of course, unless they
car be paid for.
at is true that there are some things
which the Allies must have from US,
hut there are other things that they
would like to have but can get along
without. if they must curtail some
where. We have the largest crop of
wheat ever raised in this country. and
can spare from 3O0,00O,000 to AGO.
600 900 bushels for EXPORT, but foreign
BUYERS are holding back. They expect
that the Dardanelles will be opened
before winter and that wheat can be
obtained in Russia, Canada, Australia,
India and Argentina by credit ar
that will not involve such
a discount upon the pound sterling.
At this season active preparations Tor
exporting large portion OF the cotton
crop are usually under ay. hut little
is doing at present in that line. There
is not alone the low price OF sterling
10 contend with, but the great uncer-
tainty as to its price in the future
which affects trading in commodity
futures. 49,,
AT the session of Parliament. which
will open next month, a bill will be
presented by the government revising
the customs duties. not alone with the
purposo of increasing the revenues. but
of reducing the purchases OF the Brit-
ish peopl abroad and perhaps Of d.
verting them TO the colonies. While II
is not probable that duties Will be I'M
posed upon raw materials which the
colonies do not produce, the new Inst
* likely to increase the disarrange-
ment of world trade, with both direct
and indirect effects upon this country.
Evidently the United States IS IN
along with all countries de-
string to buy here, in afording
stable basis upon which trade may go