Burlington weekly free press. [volume] (Burlington, Vt.) 1866-1928, 1915-09-02
English Pound Sterling Headed
Downward with a Velocity
That Promises to Take II to
Unthought OF Levels.
EXPORTERS DUE TO FEEL PINCH
Remedy Is for London to Estab-
lish a Mammoth Credit Loan
in This Market--America Does
Not Want British Gold to Pay
for Supplies.

New York, Aug. 31.-The Tremendous
export trade of the United States, in
which the country leads the world for
the first time. was inlperled to-day
by an alarming drop in foreign en-
change rates, notably sterling.
At the close of business tonight,
the English pound fetched but s4.55i,
in American money. This is a drop
from its normal value of 31a. cents;
from its value August l of aOal cents
and from its quotation last night of
5ai cents. a 24-hour break in values
without precedent. It marked the
lowest value yet recorded in an cxcit-
ed market where every day recently
has set a new record OF depreciation;
and it indicated that sterling was
| headed downward with a momentum
and velocity that promised to take it
! to levels unthought of 10 days ago.
In the face of this rapid depreciae
| ton. bankers here were wondering to-
/ night how much longer Great Britain
would pay the premium and buy goods
! in this market which she can get else
/ where where the value of her money
/ is greater They were Of the opinion
that American factories and producers
would feel the pinch if rates went
much lower; that cancellation of war
! orders for everything except what
Great Britain cannot afford to do with
out-powder and shot. rifles and
| shrapnel. aeroplanes and automob lies
would follow: and that there would
he few new orders placed by London
in America except for positive neces-
stiles.
REASON AND REMEDY CLEAR.
The reason and the remedy seemed
clear in the minds of international
bankers here. The English pound has
become deprecated, they said because
London has failed to provide a method
here of paying the big bills now com
ing due to American shippers; the
remedy would be- they thought to
establish quckly-very quickly, unless
sterling should become still further de-
based-a mammoth credit loan in this
market. America does not want Brit =
ish gold to pay for supplies: on this
point opinion was unanimous. The
vaults Of Wall Street and the banks in
the interior are already choking with
gold More gold would tend to create
n period OF enormous initiation.
What New York bankers want to
do is to lend Great Britain an enormous
sum of money, to be spent in paying
bills here, on approval collateral OF
high class American railway and indus p
trial stocks and bonds. This. it is be-
lieved will restore conditions to nearly
normal. Apparently, Great Britain in
tends to adopt this course. Officially,
neither Great Britain nor her finanCiers
have given an inkling to bankers here
of what they intend to do to remedy
the situation
When the deputation of British bank
ers reaches New York on it's mission to
straighten the market, they will come
with plan, il was authortatively said
tonight, Of which their associates in
New York are wholly in ignorance.
CABLE SUGGESTIONS IGNORED.
In this connection it was learned to-
night that some of the biggest inter-
national banking houses in New York
had pointed out, in their cable confer
ences with London hnanciers three weeks
ago, the danger that lurked ahead and
had suggested course which, ii pursued,
would have steadied the markets for a
month or until permanent methods of
correction could be applied, The cable
message, 1t was said. had been wholly
ignored. To this day. there has been
. no reply to ii.
London has not awakened to the fun
measure of the situation, in the opinion
of most international bankers here. The
hardness OF English bankers, 1t was said
is being paid for in British gold at rates
extremely dear
The depreciation of the pound sterling
it was emphatically asserted, is not cost
ing American manufacturers one penny
for all bills payable by Great Britain
here payable in dollars London
bankers and buyers are paying the toll-a
premium OF more than six per cent
The only bright spot in the outlook
was the probability that the prevailing
rates would persuade British holders OF
American securities to part with them
now and reap the six per cent. profit
which would thus accrue. II Is estimated
that there are American securities now
in Great Britain TO the value of 5000.
cto,O00
Where foreign money values were
headed, to what new low levels they
would plunge If allowed to follow thoil
present tendency, no man in Wall street
was prepared/to say tonight.
MENTAL PICTURE OF RESULT,
The high tide of foreign bills is on it,
way to New York now, by the end OF
next month n flood Of bills for cottor
and wheat will deluge the markets. Its
sweep will be tremendous and bankers
here conjured up mental picture o
England pounds selling at or around s
unless the rate were bulwarked soon by
a mammoth credit loan.
Never within the memory of man have
the foreign exchange markets been So
thoroughly dcmoralized before as to-day
Rates tumbled, not by the usual eighths
but cent or more at n time.
The tendency OF the market was sc
evident that spectators caught the
spirit of excitement and participated
adding to the Decentralization. In som,
; Instances. even messengers attendants
; and clerks pooled their interests anC
sold sterling, figuring that they
: couldn't lose. And they didn't
comparison OF rates quoted to-day
+ the last of August, with those that pre-
walled August ?, the first business da!