The sun. [volume] (New York [N.Y.]) 1833-1916, 1915-09-06

awaits expectations OF that sort, IL they
are entertained, but the political phases
OF the international financial situation
will bear watching.
So little a surprise was the collapse
OF sterling exchange that the real won
der is that International finance has
been so slow in moving to deal with
the conditions that were bound to oc-
cur and now exist. Yet explanation for
delay is not hard to find. British finance,
with its present ad~ulteration OF Gov
m control. could not fail to be
tardy in the matter. The British mind
has appreciated the necessity OF mo-
bilizing its foreign exchange
just as slowly as 1t has appreciated
other phases OF the raj Presumably
John Bull in general could not imagine
such a thing as a quotation OF $3.50
for the pound sterling, although pre-
sumably the fac Of 1t will be enough to
stir him to adequate action, as has been
the case In respect TO other startling
revelations incidental to the gigantic
European conflict.
Measures 20 Adjust Exchange.
Again, British finance has been slow
to move, possibly because of apprehen-
sion that the steps which would ave
to be taken would lead to a long. II not
n permanent displacement OF London as
the worlds central money market after
the war. The Chancellor OF the Ex-
cheauer in a speech in the House OF
Commons last June. moving lie reso-
luton to authorize the issuance of the
huge war loan then proposed, announced
that the Governments policy was not
only to carry on the war but maintain
British financial prominence. Proba-
bly, by his time Great Britain under
stands that IL tho war costs London its
financial prestige this is something
which cannot be helped. but the British
and French bankers who are soon to
hold conference here with our bankers
in regard TO measures for the financing
OF our export trade with the Allies will
encounter no deliberate purpose in
American finance to set up New York as
the worlds permanent money market.
Nothing could testify better to this
than the failure OF our finance to avail
itself OF the opportunities of our new
banking system to create n large dis
count market through bank acceptances
and establish dollar exchange In the
form OF n bill on New York as inter-
national currency for the settlement of
| commercial Indebtedness. Had this been
done the fall in sterling exchange would
only leave the way clear for the circu-
lation Of a satisfactory substitute which
would almost automatically remedy tho
malady from which the international
money market now suffers.
II must be said also that delay in
dealing with the difficulties of the for
eign exchanges merely illustrates anew
the fashion in which one crisis after an
other has been met in the "a Bridges
have not been crossed before they had
to be crossed. So far as our own bank
ing community is concerned, the sltua-
ton had TO become urgent before or
ganized. concerted effort could be pro.
cured to cope with 1t. Such a situation
obtains in the foreign exchanges and is
one of the surest guarantees hat the
American banker will do his part.
In advance of the international con.
ferences which are shortly TO be held
much might be written OF the various
possible lines of action which will b.
suggested at the conferences for discus.
sion. but a little more knowledge OF i'm
tention would be desirable. 1t is totally
unknown what the British and French
banking commission has in mind. In q
general way our banker favor sometime
in the nature Of a vast loan secured 10y
the collateral OF investments which Grea'
Britain and France have in the United
States and other countries outside ths
actual wal area. 1t Is essentially W
TO the visiting bankers TO make pro
posals and for our bankers to consider
them and make suggestions or counter
proposals. Nor Is the bargain all or
one side. Necessary as our markets
are to Great Britain and Its fnancia
dependencies. ~belllgerent or otherwise
the export trade In which we have en-
gagged is necessary to us.
Undoubtedly the conference will III
able to reach an agreement, but tn
task which will confront Il Ia i'm
mense. An operation OF great magni
tude. estimated in terms of many u
dreds OF millions OF dollars, will hav'
to be considered simply as a beginning
OF the undertakings to which the bank
ers must commit themselves. and public
support throughout the hole unit
will be required to make the under
takings of the bankers effective. Ameri
can business everywhere Is vitality inter
ested in the continuation Of an expor
trade expansion which has already be
gun to distribute profits in every state
In order that the projects OF the bank
ers hall be supported, American labol
and capital. employers and employed
farmers. manufacturers and merchants
should try 10 understand the bearing %
the foreign exchange breakdown or theiI
own business affairs. large or small, anc
the necessity Of providing correctives 70
1t II our export trade Is to he main
tanned In the proportions possible 70
1t during the war and retained in tn,
dimensions possible after the war.
Despite the formidable nature OF tn
obstacles to be overcome In ~engagin,
American resources in new departures
Of foreign credit extension. necessity 4
the best assurance that a way will b,
found for trade TO be carried on. Tn,
probabilities are hat Wall Street an
general business alike will, even II the!
do not discount the outcome of negotis
lions on the subject. reflect confden
underlying expectations Of n compre
hensive settlement OF international fnan
clal difficulties.