The Manning times. [volume] (Manning, Clarendon County, S.C.) 1884-current, 1915-09-01
u. S. DOLLAR RULES
WAR CAUSES NEW SHI.r' IN IN
TERNATIONAL CREDIT
english POUND SHR!NKS
Enormous War Orders Cause Rapid
Decrease in Balance in This Coun-
try for Belligerent Countries-
Loss Involved in Transferring Cur
rency is Very Great.


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 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 sit
uation exactly the opposite Of what
had heretofore been the popular be-
lief,
The maximum depreciation Aoa-
day. in pounds sterling was ga per
cent. below normal; in franc 10 per
cnet. below normal; in Italian Eres
25 per cent. In the money markets
Monday the pound sold for only
S464; 6.02 franc equalled a 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
presence in Wall street Of ]. P. 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 4.64h, one-half
point higher than it opened and
point and half under Saturdays
close, which had established new
low record. Francs gained three
points over the lower record, selling
at 5.99 at the close, and lires re-
bounded point, closing at SAT.
Bankers with international connec-
tions considered a remedy at an in:
formal conference late Monday. Il
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 se-.
curities held abroad and when this
contingency was studied the situa-
ton seemed to be pregnant with.
unique possibilities.
| A great many millions Of Ameri-
can securities, payable in dollars, are
held 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 1000 American bond sold
n 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 per
cent, the percentage Of depression
in francs in American exchange mar
kets. In London the profit would be
approximately ~ per cent, and in
Rome the profit would approximate
t25 per Get. Establishment here Of
Ia big foreign credit, estimated con-
servatiyely at S500,000,000, was
thought to be absolutely necessary il
exchange rates were to be restored to
anything like normal.
The assertion that dollars and not
pounds sterling had been the hnan-
cial standard On which all contracts
for war supplies had been accepted
in this country came as a distinct
lsurprise. Aside from marking the
temporary passing Of London's con-
troll of the worlds treasure chests, 1t
relieved anxiety on the part OF in
yestors in so-called war speclalt1es
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
" full payments would be due on or
before October l, next, approximates
| s4OO, 100000 to s5o0,000,00o. This
is in addition to the huge total Of
more than 81, 1,000,0O0,000 owed by
Europe to the United States at the
close Of the fiscal year June 80. It
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
cases, and that in some instances
these might be no profit at all.
/