The sun. [volume] (New York [N.Y.]) 1833-1916, 1915-02-16
FINANCIAL NEWS
AND COMMENT
Sterling Exchange Falls to
Lowest Price II Has Ever
Reached.
STOCK MARKET HEAVY

Altogether the most important imam
clal event yesterday was the downward
plunge OF the foreign exchanges. This
carried sterling bills to tho lowest price
ever reached so far a. n recon
showed. Other forms OF European re-
mittance fell to new low levels except
exchange on Holland. which was pre-
sumably sustained by the persistent Ger
man liquidation OF American securities.
Whether or not tho weakness OF the IN
ternatlonal money market is immedi-
ately favorable to American business
ana American values depends on a
variety Of conside atoms.
II may he said. though, that in its
way an a~bnormally low level for ex-
chang might cause a degree OF unsettle-
mtnt corresponding to the disturbance
r. sulting from the abnormally high level
last August and September. Automatic
rather han arbitrary processes are
bound to effect a REIMBURSEMENT OF inter-
national positions on an abnormal de-
cline in foreign exchange. Just as they
effected readjustinent last autumn. More
over. We will be looking at the situation
from a different angle han that of a
few months ago and the problem will
not be ours so much as Europe's.
u hspp ned hat the stock market did
not obviously reflect tho movement OF
the foreign exchanges. Quite apparently
from the beginning Of the Stock t.x-
change session Wall Street. In the stock
market sense, had u%pperTnost in mind
the diplomatic controversies In which
Washington was engaging with respect
10 the treatment of neutral shipping
during the war. II was an apprehenslva
stock market rather han one OF any
pronounced tendency or disposition 10
discount or anticipate developments che
way or the other.
Interest was chiefly II no, ro,elr an.
gagged IN the particular controversy with
Germany, and Il could not be said tina;
the day brought forth anything conclr-
Sive in this direction Reasons for ap-
prehension were certainly not removed
by the remarkable suggestion by Ger
MANY that the United States seek to
compel Great Britain to suspend the
use Of British sea power az an economic
weapon with which to hght the war.
The aspects OF Mexican affairs did not
promote a confident feeling about our
international relations. but the dominant
factor OF the Wall Street day was the
coEnIzanco taken by tho financial com
Inunity OF the necessity Of regarding
European contingencies.
Opinion was overwhelminKiy TO the
effect that the likelihood Of this country
being draw n into the European war was
slight in the extrtm". hut Il be Can TO
20 manifest that coming events IN the
war Were casting some shadow here
Dealings IN stocks were not active and
the list WAS heavy rather than weak.
Prices closed of somewhat from Satur-
days final figures. but the loss was
only fractional IN most cases and clos
ing quotations were AZ some rally from
the bottom.
Whether or not the movement OF the
foreign exchanges would have Influenced
quoted values in tho direction of
strength q conjectural The market
was in no mood TO respond TO any
thing but the uncertainty OF the inter
national political situation. However.
the drop In sterling and other forms ~
remittance unquestionahly posed a Va
ricty of important problems.
Demand sterling was dealt in as low
as 4S0'g. The market FOR sterling bill.
I'm the afternoon was almost a. n stand
s'ill. with exchange practically unsal-
able. Concern about occurrences after
next THURSDAY. the day hVei by Ger
many In is warning to the neutral word
- keep ont of the Theoretical war zone
drawn around the United kingdom. may
nave EfItNfI INTO llAF - hfaNI'Nk W AI'
foreign exchange bankers. II seemed 10
be- clear, though. that he international
money market had started downward in
earnest toward the level predicted FOR
u many weeks ago by astute observers
who refused 70 believe that Europe could
engage in such a conHict as e Is wag.rg
except AT the cost of an unprecedented
financial strain.
Satisfactory AZ II is 10 contemplate
49,
dence Of our increasing strength. the
movement also ev.n,s~ Europe's l~ncreas-
ing weakness. II does not follow that
,he principal belllgcreut countries are
headed toward bankruptcy, but there IL
demonstrated the truth OF wha the
Chancellor OF the British F~S"hequer said
in the House OF Commons yesterday
when he asserted that the war was tho
most expensive ever fought The violent
recovery in he wheat market was a
token that our eNportahle goods and
commodities would probably he raised
in price 20 offse: The depreciation IN ster-
ling and other ~eXcNangc. hut this is an
ind cation Of only one u the numerous
questions for which events must find an
answer.
American exporters must have q mar
ket for Their bills and our foreign Gus
toners. public or private, must md
some means Of paying the debts which
they are mourning. II they cannot ar
ford 10 release gold or viii insist
on keeping gold in their bank reserves
by putting IT at q steadily rising pre-
MUM the only method Of payment open
90 them would seem to he IN the llqut-
jttiou OF American securities. In ONT
form or another Il is the most probable
~ al things that manifold %rressures
VIII converge abroad 10 produce just