The Richmond Virginian. (Richmond, Va.) 1910-1920, 1915-01-11
..PA|SH 'A0OO
conferences END
FOREIGN EXCHANGE BETWEEN
TWO COUNTRIES ARE AGAIN
At NORMAL.
IN DOMINANT POSITION
UNITED STATES PRACTICALLY CON-
Trolls MARKETS OF THE
NORLD-wILL SOLVE NEW
PHASE OF PROBLEM.

New York. Jan. l0.-The Sun in
| its review of the financial situation
tomorrow viii say:
A fair commentary on the recent
developments was contained In the
announcement made simultaneously
last Friday by the Treasury Depart
ment and by the British Exchequer
that the negotiations which we're at
one time chara cterized as the Paish-
McAdoo conferences had been dis
continued
As the statement put Ii, foreign
exchange between the two countries
having become practically normal. it
Is no longer necessary for the two
Governments to exercise their good
offices in connection Herewith ana
any fursher consideration of the
question should he left to the banks
and bankers.
1t never appeared during these ne
gotiations just exactly what was aim
ed at nor how Governmental inter-
ference was projected into the situa
ton.
Not only does the course of foreign
exchange testify to the highly encour-
againg progress made in adjusting
our finances to the circumstances OF
the European war, but 1t is evident
that the United States has acquired
dominant IL not altogether con-
trolling position in the markets of
the world
New Problem For Finance.
Indeed the fall which Is taking
pace In foreign exchange possess a
new war problem for finance. Or Il
might he said that 1t presents the re-
verse OF the problem that was faced
from last August to last November
decline in the international ex-
changes 10 abuormally low levels may
seem less troublesome for us than the
ahnoramly. high level which ruled a
few months ago. but ii would sug-
gcst great deal of trouble abroad
and might consequently have unset
Ting effects here.
An altogether reasonable conjec-
ture Is that just as a solution Of one
phase ~ the problem was contrived
last autumn. SO tt1e new phase of the
problem will be solved, In both cases
automatically working 70 the restora
ton Of financial equilibrium and the
par OF finance being 10 give them as
much free play as is possible.
gain. the menace OF foreign liaui-
dation which disturbed us most last
autumn was the potential threat of a
drain Of gold which would exhaust
the bank reserves Of the country az
well as depress values undu,y. Fear
of q gold drain has been removed
and the foreign exchange situation
Is such that any probable liquidation
Of securities from abroad can be
comforta bly, financed
Demand Exceeds Supply.
II has been demonstrated that do.
rnestic demand is in excess of the
supply OF securities. Ii has been de-
monstrated tina. foreign investors are
disposed 10 abide favorable opportu
mites and favora BILE prices for realiz
ing. The stock market Is unmistak-
ably involved In the answer to be
given To the question as to the way
In which our credit balance accru-
ing in International financial opera
lions is to be adjusted 10 the necessi-
ties of European and other countries.
Few, II any bankers. think that we
Will get much gold In payment of our
bills Resort to various expedlents
can be had abroad to keep us from
getting Ut. AT the momenu il is
doubtful II effective protection could
be given to foreign gold supplies by
raising official discount rates in tho
money market, but our bankers will
not be anxious to force foreign re-
sort to devices to keep gold from
coming here, assuming that the metal
can with safety be moved from one
country to another. The consequence
of compelling @ foreign clutch on
gold holdings would be disturbing. To
say the least and might be des,ruc-
tive.