New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1915-08-30
STERLING CHECKS AT
GREATER DISCOUNT
Making Cotton Contraband May
Lessen London'S Burden OF
Foreign Debts.


had lost most went furthest in the
rally and 'the whole market rose far
above the low prices reached Monday.
Such rapid appreciation brought
heavy profit taking from speculative nc
counts and considerable pool distribu-
ton. After the middle Of the week the
upward movement was slower, but n
good part of the gains were held ut
Saturdays close. Railroads, steadier
on the break, made good recovery on
small trading. War stocks quoted
somewhat. and the copper shares were
favored as better markets for the metal
were reported. Dealings broadened and
the active list was a long one.
On the first news of amicable settle
ment with Germany the public bought
eagerly, but later lack Of definite de-
tail and higher levels reached in the
market meant some lessening of outside
interest The speculative public, how
ever, is now a large one. From all over
the country orders are coming to Wall
Street and so far nothing has effectu-
ally checked the appetite for dealing in
securities since the spring started the
markets moving. Such speculation is
dangerous without knowledge of con-
dition of the corporations dealt in, and
in most of the issues favored such
knowledge is withheld. 1t appeared for
a while that the attack on the Arabic
had furnished the shock to break down
the market, but the public has come
back again.
Sterling Rates Drop Lower.
Possibility Of borrowing Of millions
for our national defence threatened TO
delay further the projected British
credit arrangement As it is, this awaits
arrival of commissioners of the Allies
here 10 arrange details. In the mean
time purchasing of sterling bills was
light and q new low record in the price
of London checks in times Of normal
markets here was reached at 4.621s in
the pound. Exports that have to be
financed through London, while very
heavy for the season, are not yet run
ming at the tremendous rate expected
later. A trade balance for the month of
not over S100,000000 is expected. The
present low rates for sterling mean
conviction that there are balances due
US yet unpaid and expectation of
heavier balances soon TO come from
movement of foodstuffs, cotton and
munitions.
With the gold in a British sovereign
worth in our money s4S6tt, price of
under 463 for paper calling for pay
ment of q sovereign in London means
that unless some change comes soon
London cannot much longer boast that
she remains on gold basis. Just what
should be the additional cost in inter-
est, freight and insurance for mailing
sight drafts on to London and bringing
back the gold is difficult TO figure. In
surance rates may be, and doubtless
are. governed by the wishes of British
officials. Yet difference of some %
cents between the gold value Of SOW
ereign and the price here of London
check for the same amount cannot cas-
ilv be accounted for. With Great Brit
ain issuing an increasing amount OF
paper currency, it will be more and
more difficult for her to meet in gold
notes presented for redemption.
Britain's Sources for Gold.
Gold the British government must
have 10 pay for her many needs abroad,
and more gold than the spectacular
shipments already made and under way.
Suggestions of British tariff reform
are interpreted in some quarters as pre-
liminary to arranging for supply OF
gold from import duties, such as IN our
Civil War we found Of great assist
ance. British authorities seem 10 have
been slow to stimulate the production
of South African mines. With an al
most inexhaustible supply underground
an extra price for the gold mined would
greatly increase the supply. The Brit
ish government would find 1t cheaper
TO pay a considerable addition to the
miners above the regular mint price
for the amount Of gold necessary TO
coin a sovereign than TO have promise
to-pav sovereigns in London more than
20 cents below par here.
Even the censored news dispatches
that come to US from London indicate
how seriously the problem of paying
for British imports is regarded there.
Purchasing here is being conducted
much more carefully than in the early
DAYS of the war No longer are the
Allies agents violently biddin~ up
wheat and -four, and the grain market
: wondering when the heavy buying is
10 begin TO provide for next seasons
needs of the belligerents. If grain
prices can be depressed through fears
that the Allied purchases are to be
light, there is so much less to be paid
by London when the great export
movement starts.
Should the declaration Of cotton as a
contraband break the cotton market
millions may be cut out OF our favor
able trade balance, to London's ad-
vantage. With a crop of around H.
10000 bales of 500 pounds each, about
two-thirds of which may be figured as
for export, every cent off the price Of
cotton may mean some SA0,OOO,OOO less
to be paid TO us, and most payments
are made through London. That the
Allies had this in mnd when making
cotton contraband it is impossible TO
say. It is. howeve-, an incidental result
Of the decision, and military need for
such action seems hard 10 find.
Guncotton No New Thing.
Use of guncotton for high explosives
is no new thing. According TO the en-
cyclopedias, il was made known before
1850 and prior TO that time there had
been experiments in nitratng other
vegetable fibres. /, Is particularly de-
sirable for explosive shells. as, unlike
nitro glycerine, it does not detonate on
shock, but when gnited. In the Boer
war, as lyyite, il was employed by the
British. The French army has long
had it's melinite. SO the discovery that
cotton might aid Germany in making
munitions Of war did not come sud
denly TO the British authorities.
As q matter Of fact, credible reports
from those competent 10 know what IS
going on in Germany say that already
wood fibre is being used to make high
explosives Cotton, the use Of which