The watchman and southron. [volume] (Sumter, S.C.) 1881-1930, 1915-08-21
Big FINANCIAL CHANGES.
PRESENCE OF MORGAN ON Ex-
CHANGE SENDS EXCHANGE
L RATES DOWN.
American Dollar Rules I'm Financial
world and Foreign Countries Must
Pay ON Bills for Largo War Or
ders.


lean dollar ruled the financial world
today with an iron grip. Foreign ex-
change went down TO new depths in
n torrent OF bills that poured in the
exchange markets from American
manufacturers seeking pay for big war
contracts.
ooincidently with the startling de-
cline I'm exchange rates came tho as
sertion from an untmpeachable source
that every contract for supplies sent
abroad called for payment in Amer
lean dollars and not pounds sterling,
which heretofore have been the stand
ard OF finance the world over. The
immense losses. therefore. due to the
decline In foreign exchange rates, will
be borne. to the last penny. by for
eign buyers--a situation exactly the
opposite OF what had heretofore been
the popular belief.
The maximum depreciation today
I'm pounds sterling was ga per cent.
below normal: In francs 10 per cent.
below normal; In Italian lires 20 per
cent. In the money markets today
the pound sold for only s4.64; 6.02
francs eQualed n dollar. and dollar
purchased 6.4s lires. These were the
quotations while rates were at the
lowest.
In the last hour Of business the
presence In Wall street OF J. p. Nor
San for the first time since the at
tack on his life six weeks ago and
an Informal conference OF bankers to
confer On the exchange situation sent
rates upward.
Sterling closed at 4.s7 1-2. one-half
poinr higher than II opened and a
point and n half under Saturdays
close. which had established a new
low record. Francs gained three
points over the low record. selling
at 5.9s ut the close. and lires re-
bounded point. closing at 6.47.
Bankers with international connec-
tions considered a remedy at an in
formal conference late today. 1t wns
decided TO do nothing. chiefly because
the remedy lay with the foreign buy
ers. They were the sufferers a,id
theirs. II was the consensus OF opin-
Ton. should be the task OF setting the
money markets to rights.
How this would be done was the
object OF keen consideration and some
speculation. IL generally was be-
heved that the present abnormal sit
uation would not be permitted to con-
tinue long. The obvious remedy
seemed To be to sell American secur-
tiles held abroad and when this con-
tingency was studied the situation
seemed to be pregnant with unique
possibilities
A great many millions Of American
securities. payable In dollars. are held
abroad. chiefly high class railroad
bonds and preferred stock OF q select
ed list OF American industrials. Should
these securities be sold, at the pres
ent exchange rates I'm foreign mar
kets. they would fetch far more than
the purchasers paid for them, due en-
tireiy To the depression of exchange.
~ Thus n $1,000 American bond sold
In Paris at par would. on account OF
prevailing exchange rate. bring ap-
proximately 5000 francs. When pur-
chased at par a year ago II cost the
purchaser approximately $3.50 francs.
The net profit would be about $50
francs. or about 10 per cent. the per-
centage OF depression In francs in
American exchange markets. In Lon
don the profit would be approximate
b "a per cent. and in Rome the
pront would approximate 25 per cent.
Establishment here OF big foreign
credit. estimated conservatlvely Mt
s6OO.OOO.OO0. was thought TO be abso-
lutely necessary IL exchange rates
were to be restored to anything like
normal.
The assertion that dollars and not
pounds sterling had been the financial
standard on which all contracts for
war supplies had been accepted IN
this country came as n distinct sur
prise. Aside from marking tho tenn
porary passing OF London's control OF
the worlds treasure chests. 1t re-
hoved anxiety on the part OF invest
ors In socalled war specialties in the
stock market who were confronted
with the prospect OF large shrink
age In prospective profits due to pre-
Vailing low rates OF exchange.
Measured In dollars and cents. 1t
was learned that the amount of