The evening herald. [volume] (Albuquerque, New Mexico) 1914-1922, 1915-08-31
English Pound Sterling
Reaches Further Low Lev
ell; British Buyers Forced
to Pay Heavy Premium.
BANKERS PREDICT
SERIOUS DIFFICULTIES
Great Britain Will Refuse to
Purchase in American Mar
/ kets Unless Rates Are Ad-
justed Soon, Belief.

New York, Aue. H. Foreign ex-
change rates reached their most serl-
Gus STAGE today Ash an overnight
break pf y Genus In sterling. the
English pound sterling selling In this
H'irhet at yf.aS q. close 10 the mark
where curtailment Of big foreign or
ders 10 the United States would fol-
low. in the opinion Of bankers here.
Nothing like the violent break In
quotations had ever been recorded In
forelgn exchange markets here be-
fore. The low level reached to-day
was p cent below the mark aet
weeks ago by financicrs as the So
called irreducible minimum which.
when reached. would cause british
buyers TO seek other markets In which
10 place their orders for such Imports
as could be obtained elsewhere than
In America
Foodstuefs. manufactured goods
and many other products. in fact al
most everything except actual munl.
tions of war. were embraced within
this category
Decentralization in the foreign ex-
change markets was succeeded by al
most chaotic conditions as the result
OF the break. Dealings In foreign ex-
change we're virtually al standstlli
Rates varying aA much AZ a cent were
quoted by different houses, but these
rates. In almost every case. were
purely nominal and there was no
business worthy oi the name done In
/ English money here today.
The big break means that English
buyers. In addition 20 the top of tho
market prices already paid by them
in this country for American products
are called upon 20 pay premium Of
i2Sh cents on every pou6a's worth
OF purchases or more than per cent.
with London carrying this oncfoua
burden. something new 10 British
bankers. as English money has for
generations been the world standard
Of international finance. the question
discussed IN banking circles here to-
dny was how long Great Britain
would continue TO buy here such arsi-
cles as she WIS not compelled "a.
There is no other world market of
Importance open. u was pointed out
but more rigid economy at home In
Ian imported ARTICLES and purchases
by Great Britain from such Euro
pean neutrals as had wares to sell
II was thought. would undOubtedls
follow II exchange rates should ~
lower. This would result in lesseninf
10 an extent which cannot now b'
estimated the amount OF goods which
American sellers are sending abroad
now the greatest In volume Ia I'M
history Of the country.
Not an American contract has ye
y been cancelled. ID w8s said. but tn
HEAVY premium which british buyer
must pay gives every Indication. Il
the opinion OF local bankers. tha
y lc,pcelintlnns .yill follow unless rate
. Iare rectiried very soon and that theF
y win bc decided slump In new er
e ders. what this would mean 1
% American industries can not be est
\ mated
IS The new low record OF st.sSis wa
= the nah low record established
y ave consecutive business days. Sine
Hast Thursday the pound sterling hi
dropped from st.63 or 5A cent
nearly one half of which was regi
Il tered when the market opened tada
Last nights close ot sf.6i was n
Il lowest value ever placed. at that tim
2 ON the pound In this country. N
e situation today was regardcd as a
most desperate. Within an n"ur att
= the opening Of the mcTket the ra
went lhWtf rNiii ttu'hlAh Ftsrha
then reboundod and touched S1.59. u
ternational bankers here, looking AN
iously across the Atlantic for reli'
r saw nothing more than they did y,
terday--that British and Fren
bankers were preparing TO remedy I
situation,
The time for preparing 10 RENE
1.-THE situation. In ,he opinion of bar
ers here. il nearing ts end and
Itime TOR doinR something 10 stfeng
en- the marker has arrived. W
nothing hns been done, l. was
lievcd, WAS because oreat Britain
not fully awakened to the seriouan
OF the situation.
= Il was also Thought possible |
= british bankers permitted rates
. reach their present low level heca
= they would afford a strong ind,
. lnent TO British holders OF Ameri
. SECURITIES 20 sell their holdings
. thus reap the benefit OF a five
. lccnt increase Ia values These se'
. tiles. il il understood, are TO be ~
. the collateral for the estaoiishmen
. "a foreign credit loan here.
with steriine'a break today ~