New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1915-03-01
WEEK in FINANCE
HERE and ABROAD
Foreign Exchange Rates
Move in Our Favor-Pre-
MUM on N. Y. Drafts.
ALL EUROPE FORCED
TO BUY GOODS HERE
Conditions Favor Our Becoming
for a Time the Worlds
Financial Centre.

Possibility OF serious interruption OF
The stream of our exports continued 10
disturb security markets last week and
caused spprehensive fluctuations on
grain and cotton exchanges. In these
speculative circles attempt is made TO
discount possibilities Of future trouble.
Foreign exchange rates. however, that
measure PAYMENTS for our shipments
against the need Of remittance abroad,
moved IN our favor. Exchange on Lon
don went TO the low record OF the
week before and tho Continental eN-
changes fell lower. New York funds
were everywhere at a premium. inns
IS being recognized by large proper
tion Of those receiving war orders mere
who are demanding payment IN TINS
city instead Of through drafts on the
foreign purchasers.
Great Britain's -eminencc ms
world financial centre was IN great
measure duo TO her investment each
wear OF millions Of dollars in every
quarter or the world This made drafts
on London d standard means OF pay,
ment, because they we're in demand
everywhere by debtors who needed 10
remit TO the British capital. Now
with the nations buying heavily here
and our purchases and expenditures
abroad reduced, drafts on New YORK
are needed 20 pay US. Our advantage
IS, Of course, temporary, but snould
the war be long continued under pres
ent conditions we should retain much
Of the ground gained.
The last few months have added
greatly 70 our financial prestige. We
have given uU gold when, through in
terruption OF commodity shipments, we
could not command gold elsewhere.
We needed no moratorium 70 postpone
payment Of our debts. Our currency
and our banking system have been es-
tablished on frmer basis than ever
before. and VIC have not been com
pelled to the perlous eXpedient OF is
sues of irredeemable paper money,
which already are beginning TO show
their inevitable effects across the
water. And we arc the one great ma
fion not wasting its wealth IN war
fare.
Discount Facilities Lacking.
An this favors our assuming the
rlace Of a great discount market for
world trade. but as yet facilities are
lacking. The local Federal Reserve
Bank during the week made begin
ninc of the purchase Of bankers &C
tcptances arising from foreign com
mcrce. but such obligations as yet
form only an insignificant proportion
OF our banking resources. II IS not
enough for our financial institutions
20 have obtained legal power to accept
customers drafts and insure payment
by indorsinC thCm. There must be
widespread demand for these most de
sirable short-term investments, and
broad discount market capable OF an
torbing acceptances covering the
worlds trade is not created IN re"
months.
In London our progress along these
lines is being watched with some Jeal-
ousy. Drafts against letters or credit
on New York banks have been discrim-
mated against in the British money
market in spite of the premium that
American funds command there. Such
attempts, however Will be iutlIe IN
less the war is suddenly brought TO an
end or some unforeseen and stu I'M
probable event checks the favorable
course Of our commerce.
For January VIC shipped abroad
Goods 70 the value Of S145, 900 more
than we received. Imports were s32,-
600 600 less than in January Of the
wear preceding, and exports So3,OOV-
600 greater. Food products were sun
principally responsible for this IN
crease in shipments, breadstuffs sent
abroad alone being five times as great
as in the opening month of 1914. Yet
cotton is making a better showing
month by month, and as the workers OF
the warning powers arc drafted TO the
battlefelds our manufactures must be
drawn on more heavily. The first
three weeks Of the current month have
nroduced an export excess OF around
500. 900, 900 in the principal custom
@istricts.
Possible Relief for London.
Before long some measures must be
taken 10 make payment here easier for
our largest customers, Great Britain
and her allies. Ii IS not TO our ad-
vantage TO allow exchange rates TO i'm
node purchases here. Credits privately
Granted by bankers here to bankers IN
london appear the easiest temporary
remedy. They have the advantage that
terms Of settlement must be salts
factory TO our fnanciers, as, for eX-
ample, in payment in New York funds.
Such expedients. Of course, only post
none definite adjustment. Further
sales Of our securities by foreign own
crs at our own prices furnish prac-
tical and final payment. German Sc
curity owners have apparently been
following this course, rather large