New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1915-07-26

Of exchange cannot be expected when
the coming crop movement across the
Atlantic will have added shipments OF
munitions expected to run heavy a
few months from now. II is feared
that funds in London viii then be at
further abnormal discount here, and
so, in spite Of higher interest rates IN
the British capital, there Is little dis
position 20 refrain from drawing bills
and to allow balances to accumulate
abroad.
As Great Britain puts more men un-
der arms and engages more of those re-
naming in manufacturing munitions Of
war her production Of goods that this
country might desire seems likely TO de-
crease. Her citizens did not sell our
securities in any great volume in the
ten days preceding the first regular
payment on the new war loan. Meeting
future instruments may not send back
any great quantity OF our stocks and
bonds Credits here for use against
purchases on this side in the next few
months must be in the hundreds OF
millions to be effective, and shipment of
gold in sufficient quantity to strengthen
exchange rates might seriously threaten
the gold holdings of Great Britain and
her Allies.
Opposing Gold Theories.
British authorities regard the ques-
tlon OF how TO meet her bills here as a
serious one, since that country is max
ing every effort to continue on a gold
basis. Across the water we see being
tested two opposing systems of finance.
Germany, unable 10 make large pur-
chaScs outside her borders, is hoard
ing her gold and paying her inhabi-
tants with paper based on paper. Great
Britain, fnancier for herself and her
Allies, is adhcrng TO the orthdoX sys-
tenn of credit based on gold that re-
qulres gold to be paid OIL demand.
Needing so much from abroad, demand
for gold is great.
Ordinarily movement Of goods be-
tween nations together with payment
for services tends toward an equilib-
rum and little gold is shifted to and
fro. As gold flows out of a country
prices there are lowered and in the
country to which it goes they are
raised. This tends TO check the move
ment of goods. Now the desire for
means Of warfare is the weightest in
fuence felt in London. II may keep
enough, before the Allies can produce
tAOli ONu SupplltSf 10 DIllS dupuL sumo
new means Of forcing owners of our Sc
curities to sell them. II may send gold
TO this side until Great Brtain's whole
financial system is in disorder. Pur-
chaSes here may even put funds in
London to a discount approaching the
premium we paid in the excited days
OF last August.
Germany. in the meantime, shut off
through no wish of her own from for
eign markets, has no occasion to meet
any important amount of purchases
outside her borders She is hanging on
to her gold regardless Of the move
ment of exchange rates. So long as she
can, within her own territory, produce
what she requires she can refuse to
give gold to any one. At the end of
the war Germany may be able to start
10 unravel the monetary tangle in
which she IS becoming involved with her
supply of gold practically intact. From
such advices as received here II appears
that her strong central government is
able to control prices of food and so on
and thus avert the hardship that came
20 us during our Civil War when prices
rose over 100 per cent and wages less
than So