South Bend news-times. (South Bend, Ind.) 1913-1938, 1915-09-01
ENGLISH MONEY
TAKES BIC BREAK
Country Must Spend S106 to
Purchase 500 Worth of
Goods in This Country.
BY b. c. Forbes.

NEW YORK. Sept. 1.-The value
of English money broke sensationally
here Tuesday TO 1851 1-2 for a pound
sterling, a depreciation Of fully six
percent
Unless England can get hundreds
OF millions Of funds here to meet her
enormous bills, she may have TO re-
strict purchases Of all but war mater
ials to such an extent as 10 affect
employment and business in this
country, bankers declare.
Tuesdays Generalization in foreign
exchange has not been equalled in the
last century-nOt since the European
catalysm that preceded the downfall
Of Napoleon exactly 100 years ago.
Refuse TO Buy.
For every 500 worth of goods
bought here. England must pay $1O6
OF her money. The English pound
normally is worth $4.86 IL. Tonight
Il was worth 81 cents less. and inter
national bankers refused to buy ster-
ling even at that level because they
see no immediate end to the down
ward movement.
The American workman does not
see any connection between foreign
exchange" TO him a Greek phrase,
and his pay envelope, but unless the
collapse in the medium for settling
England's bills can be checked, many
pay envelopes here are threatened, as
the British government viii peTIorce
have 20 limit it's own buying of
American materials and will doubtless
take steps TO restrict purchases Of
merchandise here by British rner-
chants and importers largest
oversee customers.
French Coin Falls.
French money, measured by the
American dollar, has fallen 16 per-
cent. German currency fully as
much, Austrian 20 percent. Italian &c
percent, and Russian % percent.
commission OF eminent English
and French bankers Is coming to New
York to devise a plan to enable the
allies TO pay for the billion or more
of war materials contracted for here
and the other billion or so Of cotton
and foOdstuffs which are beginning to
be marketed from the 1915 harvests
our balance Of exports over imports
since January has exceeded a billion
dollars and approach two billions by
the end of the year
England and France have sent
$200,0OO,00e gold this year, but all the
gold in the banks of these countries
would not square the full account.
Arrange Finances.
What the commission is expected to
dc Is to arrange for huge loans here,
in all probability with American bonds
and stocks cOrralled by the two Eu-
rcpean governments from their citi
zens as collateral to secure the ad-
Vances.
1 am informed by the strongest
financial interests in this country that
England can obtain practically un
limited loans here on sound American
securities as Americas new currency
system permits of almost infinite ex
pansion CT credits-Pro~' Vanderlip
of the National City bank some time
ago put the possible expansion based
on the surplus bank reserves at be-
tween two and three billion dollars
and bank reserves have increased
since then.
American financiers severely crit
cize the British for having muddled
the foreign exchange situation by neg
lecting TO provide means for squaring
accounts.
Americans Nervous.
So acute has the position become
that manufacturers of war materials
are nervous lest bills be not promptly
paid. Wall street also was alarmed
over today's blow to Britains fnan-
cial prestige.
stocks declined when sterling broke
i've cents in as many hours.
The English pound was worth S4.76
at the opening of August, or 20 cents
more than today
torelgn exchange brokers' sold
snort with great daring in the after
noon, aggravating the weakness.
BY selling American securities own
ed by them, English investors can
reap a proht Of six percent on the
American money they receive in paw
ment. Yet little of The $4,000 600. O0O
estimated to be held I'm Britain is
coming on the market
Urgent cables were sent to London
eXhorting the British authorities to
check the financial debacle.