Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1915-08-31
Break of 2 IL Cents in
Sterling Brings English
Pound to $4.58 IL.
FEAR CURTAILMENT
OF AMERICAN TRADE
Added Tax Upon British Buyers May
Cause Transfer Of Business to Other
Neutral countries-lmmediat Rem
edy Must Be Found or American
Manufacturers Must Suffer-British
Buyers Forced to Pay Premium.

! New York, Aug. 31.-FOrelgn eN'
change rates reached their most seri
| GUS stage today with an overnigh
break Of ~ cents in sterling, the Eng
lish pound selling in this market a
SASSY. close to the mark where cur
I; tailment of big foreign orders to the
United States would follow. in the
opinion Of bankers here.
Nothing like this violent break to-
day had ever been recorded in foreign
exchange here The low record today
was 11k cents below the mark set by
+; financiers as the so-called irreducible
minimum which, when reached, woulG
cause British buyers to seek Other
| markets in which to place their orders
Foodstuffs, manufactured goods and
many other products, In fact almost
everything except munitions Of war
! were embraced in this category.
Decentralization in the foreign ex-
change market was succeeded by al
most chaotic conditions as the result
of the break. Dealings in foreign ex-
change were virtually at q standstill
Rates varying as much as a cent were
quoted by different houses, but these
rates, in almost every case, were pure
ly nominal, and there was no business
worthy Of the name done in English
money.
May Cancel American Orders.
The big break means that English
buyers, in addition to top Of the mar
ket prices already paid by them in this
country for American products, are
called upon to pay a premium Of 28h
cents on every pounds worth Of pur-
chases, or more than 5 per cent.
With London carrying this oneroui
burden. something now to British
bankers. as English money has fol
generations been the worlds standard
Of international finance, the question
today was how long Great Britain
would continue to buy here such ar
ticles as she was not compelled to-
There is no other world market OF
importance open. it was pointed out
but more rigid economy at home in all
important articles and purchases by
Great Britain from such European
neutrals as had wares to sell, it was
thought S--c-!d undoubtedly follow II
exchange rates should go lower. This
would result in q decrease in the
amount Of goods American sellers are
now sending abroad, now the greatest
in volume in the history Of the coun-
try.
Loss to America lnestimabls.
Not contract had been cancelled
it was said, but cancellations are ex-
pected to follow unless rates are rec
titled very soon and that there will be
decided slump in new orders. What
, this would mean to American indus
tries could not be estimated
The new low record of SASSY was
the fifth low record established In five
consecutive business days. Since last
Thursday the pound sterling had
dropped from $4.64, or 51z cents. near
ly one-half OF which was registered
when the market opened today.
Last nights close Of 1851 was the
lowest value ever placed, at that time
on the pound in this country. The
situation today was regarded as al
most desperate. Within an hour after
the opening of the market the rate
went still lower, reaching $4.5s. 1t
then rebounded, touching $3.50.
Bankers here saw nothing more than
they did yesterday in the way of re-
lief-that British and French bankers
were preparing to remedy the situa-
ton.
Must Find Immediate Remedy.
The time to remedy the situation, in
the opinion Of bankers here, is near
ing the end. Why nothing has been
done. it was believed, was because
Great Britain had not fully awakened
to the seriousness Of the situation. It
was also thought possible that British
bankers permitted rates to reach their
present low level because they'would
afford q strong inducement to British
holders Of American securities to sell
their holdings and thus reap their
benefit Of 5 per cent increase in
values. These securities it Is UNDER
stood, are to be made the collateral
for the foreign credit loan here.
With sterling's break today francs
also were deprecated to within cent
Of their previous low record Of 65.
Lires wers quoted ct $50, yesterdays
close, cents better than the lowest
rates reached. and reichsmarks went
to 8A. X OF cent above their lowest
0ritons Sell American Bonds.
London, Aug. 31.-The American ex-
change problem is becoming more seri-
GUS, notwithstanding recent shipment