The Manning times. [volume] (Manning, Clarendon County, S.C.) 1884-current, 1915-08-25
j. 5. DOLLAR RULES
WAR CAUSES NEW SHIFT IN IN
TERNATIONAL CREDIT
english POUND SHRINKS
Enormous War Orders Cause Rapid
Decrease in Balance in This Coun-
try for Belligerent Countries
Loss Involved in Transferring Cur
rency is Very Great.

Loss Involved in Transferring Cur
rency is Very Great.
The American dollar ruled the fin
ancial world Monday with an iron
grip. Foreign exchange have gone
down to new depths in a torrent of
bills that poured in the exchange
markets seeking pay for big war con-
tracts.
Coincidently with the startling de-
cline in exchange rates came the as
sertion from an unimpeachable
source that every contract for sup
plies sent abroad called for payment
in American dollars and not pounds
sterling, which heretofore have been
the standard Of finance the world
over. The immense losse, therefore,
due to the decline in foreign ex-
change rates, will be borne, to the
last penny, by foreign buyers-a Sit
uation exactly the opposite of what
had heretofore been the popular be-
lief.
The maximum depreciation Mon
day in pounds sterling was 3-4 per
cent. below normal; in franc 19 per
cnet. below normal; in Italian lires
25 per cent. In the money markets
Monday the pound sold for only
s4.64; 6.O2 franc equalled dollar,
and a dollar purchased 6.4S lres.
These were the quotations while
rates were at the lowest.
In the last hour of business the
CT nf Nor
gan for the first time since the at
tack on his life six weeks ago and an
| informal conference of bankers to
| confer on the exchange situation sent
rates upward.
Sterling closed at 4.64k one-half
point higher than it opened and a
point and a half under Saturday s
close, which had established a new
low record. Francs gained three
points over the lower record, selling
at 5.99 at the close, and lires re-
! bounded a point, closing at SAT.
Bankers with international connec-
: tions considered a remedy at an in
! formal conference late Monday. 1t
was decided to do nothing, chiefly
because the remedy lay with the for
eign buyers. They were the suffer
ers and theirs, it was the consensus
of opinion, should be the task Of set
ting the money markets to rights.
How this would be done was the
object Of keen consideration and
some speculation. It generally was
believed that the present abnormal
situation would not be permitted to
continue long. The obvious remedy
seemed to be to sell American Sc
curities held abroad and when this
contingency was studied the situa.
ton seemed to be pregnant with
unique possibilities. y
A great many millions OF Ameri-
can securities, payable in dollars, are
fheld abroad, chiefly high class rail-
road bonds and preferred stock of a
selected list of American industrials
Should these securities 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 depression OF ex'
change.
Thus a 81, 900 American bond sold
in Paris at par would, on account OF
prevailing exchange rate, bring ap-
proximately 5000 francs. When
purchased at par year ago it cost
the purchaser approximately $3.50
francs. The net profit would be
about $50 francs, or about 19 pei
cent, the percentage of depression
in francs in American exchange mar
kets. In London the profit would be
approximately AZ per cent, and in
Rome the profit would approximate
25 per Get. Establishment here OF
a big foreign credit, estimated con-
servatively at $500, 100000 was
thought to be absolutely necessary II
exchange rates were to be restored to
anything like normal.
The assertion that dollars and not
pounds sterling had been the finan-
cial standard on which all contracts
for war supplies had been accepted
in this country came as distinct
surprise. Aside from marking the
temporary passing Of London's con-
troll of the worlds treasure chests, il
relieved anxiety on the part OF in
vestors in so-called war specialties
in the stock market who were con-
fronted with the prospect Of large
shrinkage in prospective profits due
to prevailing low rates of exchange
Measured in dollars and cents, it
was learned that the amount Of these
war contracts, on which full or near
ly full payments would be due on OF
before October /, next, approximates
s4OO, 100000 to s500,000,00O. This
is in addition to the huge total OF
more than 1,O00,OOO,O00 owed by
Europe to the United States at the
close of the fiscal year June 80. 1t
was also learned from an authorita-
tive source that the prospective prof
it's on some of these contracts had
been greatly exaggerated; that only
normal profits would accrue in most
leases, and that in some instances
these might be no profit at all.