Evening star. [volume] (Washington, D.C.) 1854-1972, 1915-09-05

And this is only half the problem.
Only a small portion of the war
| orders thus far placed in this country
have as yet been filled by actual ship
ment and the details of the financing
| of this tremendous trade have yet to
he worked out. Until this is done we
may logically expect more or less
nervous tension in the international
money markets.
Bottom Not in Sight.
The decentralization of the market
Tuesday, when demand sterling broke
from $50 to 4.57. was the most severe
and dramatic market decline whichNex-
change dealers in this country have
ever experienced. A drop of 5ls cents
in the value of the pound sterling In
single day is so far beyond the COM
prehension of dealers that no one is
willing to predict at what point the
market will find the bottom The Eng
lish pound is now selling at 30 cents
below it's normal quotation. The ex-
change situation has thus become an
important factor in the stock market.
and it is held to be expert opinion that
no new commitments should be taken
on until permanent Improvement Is
definitely assured.
The shipments of gold may therefore
be regarded merely as temporary
makeshifts. pending the arrival of the
and French governments, who will
confer with our own bankers on the
subject. On one point, however, there
is a perfect unanimity of opinion: that
is that the restoration of the pound
sterling, the franc and mark to normal
value is an absolute and positive neces-
sity. large credit may or may not
be the solution of the problem, but
business men of the United States may
rest assured that satisfactory arrange
ments will be made in time to prevent
any unnecessary interruption In our
trade with the European countries. A
the following accurate comment: The
bringing in of gold from Europe will
not clear up the foreign exchange
situation. In my judgment this can
only be done through extending credit
to Great Britain and perhaps to France
and Russia on a large scale. This is
bound to be done in due time. There
are a good many difficulties to over
am not in favor of loaning large
sums to.those countries with American
| securities as collateral. / would not be
opposed to buying those securities
back from Europe, but l think that
the loan or loans should be arranged
on some other basis"
Banks Are Full of Money.
There is perhaps no more contemp-
tible speciment of humanity than the
miser. The man who boards his saw
ings and hides his surplus in tin can
| or the chimney hole not only robs his
money of it's earning power. but de-
| prives society of the capital that is so
| necessary for the turning of the wheels
| of progress. When, however, a man
finds that his funds are accommodating
to such an extent that he is unable to
| direct them into profitable lines OF in
vestment he can hardly be cen:slred
| for existing conditions. In fact 1T
would be quite unfair to label him a
| miser.
The banks of the United States are
confronted with such a condition at
this time. The controller of the cur
| rency has already called attention to
the fact that the national banks of the
United States on the date of their last
reports held $4,000. 900 cash in their
vaults in excess of the amount required
by law. The New York clearing house
last week reported the excess reserve"
/ of its members to be $204,799,580 COM
pared with an adverse balance at, a
corresponding date last year. These
excess cash holdings are not from
choice. but from necessity; from our
inability to find proper avenues of prof
| liable Investment Cor our rapidly. in
creasing wealth. BY Investment" we
do not refer specifically to stocks and
bonds, but may include the many COM
| mercial and industrial opportunities
| l.
| tional progress. There is therefore no
| cause for criticising the banks for their
excessive surplus. but rather to CO.
operate with them in directing these
| funds in safe and productive channels.
| 1t is believed that our people have
| been saving their money to an extent
| that means great deal in the way of
| reserve buying powers. We are again
harvesting bumper crops that are to
| be sold abroad at war prices. We have
.Ixx,~ IL
volume of American securities. and it
| will require severe pressure on the par
of the governments of Great Britain
and France to force their own investors
to sell additional Quantities We have
| more gold than we need, and the allied
governments apparently are deter
mined to send us much more. All these
| conditions are such as under ANYTHING
| like normal times would make for
strength and activity in our markets.
New York City Redeems Bonds.
New York city. Wednesday of this
week, called in and redeemed $4,000
900 worth of one-year per cent cor
porate stock. issued September /, 1914
| This is the largest redemption of city
securities held by the public ever un-
dertaken by any municipal administra-
ton in America. The $57,OOO,OOO is
part OF the SlUo,oOV,UUo One-year loan
raised by the city to meet maturing in
debtedness. much of which was held
abroad and payable in gold. The Euro
pean war had disrupted the interna-
tional financial machinery. Exchange
on London and Paris had scared, and
European investors were calling for
American gold in exchange for Ameri-
can securities. among the latter being
the New York city's maturing obliga
tons The bankers had the gold, the
4 I'll
the city had to pay the price. The
city had been paying to ~. per cent
interest, but to raise s100.000.00 with
all Europe at war. it had to pay per
cent to a bankers syndicate.
| While more or less criticism was leveled
at the city authorities for this apparently
excessive interest rate, banking experts
were unanimous in their opinion that the
| city had made fair bargain, since the
terms Of the contract obligated the under
writing bankers to provide exchange or