The sun. [volume] (New York [N.Y.]) 1833-1916, 1915-02-16
SENSATIONAL BREAK
IN EXCHANGE PRICE.
Goes to Lowest Lcvel-Eng-
land Must Send Gold or
Take Credit.
GET 800. 900. 900

Sterling exchange suffered another
sensational break yesterday and dropped
to the owest price il had sver touched
in the memory of the Oldest experts in
exchange in Wall Street. Demand stcr-
ling closed last night at 4.S0L and
on London was the sensation of the
financial district Yesterday. Its decline
carried with IL p recession In the price
OF exchange on every other leading
financial centre OF Europe with the ex-
ception n Berlin. Marks. however. had
already had an abnormal break and
were selling AZ the lowest prices ever
recorded. Francs sold down to 5.2ii.
for checks and 523i2 for cables. while
Italian lire dropped to the lowest price
for all time, at $50
On last Saturday denand sterling sold
az 4s2, while cables closed al 4 s? s-ts.
Francs were then quoted at sal for
checks and 5.2ot for cables.
The low level for sterling excha nge
reached yesterday has firmly convinced
conservative bankers that England will
have to do either one Of two things. II
rates do not soon get back to- normal.
England, they say. will have 20 shin
gold or avail herself OF . credit OF 500
900 1000 or more In this country which
local bankers have signihed themselves
as willing TO advance 10 her The belief
prevails that England will accep, the
credit. as II IL believed that she does not
wish TO part with gold at this time be
cause she did not permit gold In an,
considerable quantity TO crine from
Ottawa during the period IN. : exchange
has been so much against her
~ To- now England has been paving
for all the vast amount OF food and
military supplies she mas been huving
~ this country through drafts against
deposits which sh" has had I'm this
country or through exchange transac.
tons The tntimatl ~ vas received ves.
tcrda; In important banking circles that
the deposits were about exhausted II
Is Thought certain that England will not
continue 70 pay for her purchases IN de-
preciated exchange. should she con
tinue 10 do ~ the price OF the goods
which she purchases IN this country
would he rapidly advanced
Il Will BE- remembered that no, long
ago there was given out IN this city
and IN London the tent ~ an agree
meut which had been reached between
New York and London bankers. The
docunrrt related to exchange rates and
the shipment OF gold between the United
states and London and provided that
II AZ any time during she war or within
one year afterward the rates Of ex-
change between the two countries
should become such that excessive
shipments OF gold we're necessary ar
tiicial means 20 prevent such an oc-
currerce should he ~resorted 70. When
his agreement; was made exchange was
against This country and there was
talk OF I.oudor's extending a 500.
GOO 90" credit - fha' tnis country
would not have to export more gold
That difficulty has been overcome and
the positions OF The two countries are
now reversed n was learned ycster-
day tina the New York and London
bankers AZ the time of their confer
ences also considered the establish
msnt o. a credit here for z England and
they now fee that tho time is ripe
TO put this plan into operation. Should
II he set I'm operation 4 would be. II IS
believed the first arrangement OF the
kind between England and the United
States
Tire main causes For tNe abnormal
decline in the price for sterling ex-
change YESTERDAY were that every one
wanted to sell and no one wanted TO
buy AZ a result there was almost
10 market. The marker WAS generally
described as cray" owing TO the vto-
lent fluctuations IN price