New Britain herald., 1915-09-04
BANKERS EXPECT GOOD FALL TRADE
Confidence in Home Affairs Is I Everywhere Gaining
Special to the Herald.)


 circles when it became known that
 Germany was ready to conduct it's . submarine warfare upon the lines re- quested by the United States govern nnent. This welcome concession on
 the part of Germany was naturally < gratifying to American sentiment; end has, it is hoped, permanently re-
 moved all serious friction between < the two countries. Details may re- duire time for adjustment, but if the present spirit of conciliation is pre- served on both sides, all fear of serious rupture, or becoming involved in the war, will disappear. As a danger point, therefore, the, ''Lusi- tania" and the Arabic incidents may be considered as safely passed
 Confidence in home business affairs is everywhere gaining, and in the best banking circles there is universal ex- pectation of a good fall trade. Things in general appear to be on the mend. Trade and traffic are still below nor- g mal, but the tide is rising. The < banking situation in the United States was probably never sounder or more satisfactory than at the present moment. The new banking system is working smoothly and the danger in this part of our economic machinery is more in the direction of over
 expansion than in contraction Ac- cording to a recent statement by the comptroller of the currency, the banks of the United States have it in their power to expand loans fully S3,000, 100000. The present harvest equals and is even exceeding all ex- tectations as to quantity Wheat, corn and oats promise to surpass the or1i ay,f acf foc ba cnly drawback in the grain outlook is the reported injury to wheat from ex- cessive moisture, also the certainty of a rush of wheat into European mar kets when the Dardanelles are opened Wheat and oats will be record crops, and corn nearly so. The cotton outlook is, of course, un- satisfactory. While the situation has been changed by the placing of cot ton on the contraband list, it will not 1 materially affect exports since ship l ments to Germany had previously | been almost suspended. The yield | this year will undoubtedly fall con- siderably below last years's crop, | which will offset the loss of exports of about 3,00O,O00 bales to Germany | and Austria. Fortunately, there will | be no difficulty in financing the crop. 7 (guf own lHdHCldl ciul1lllSS, Jdoe | shown are unusual and the offer of | the Secretary of the Treasury to loan | S3O, ,000, ,000 gold to the Reserve banks for advance, -en=scottnn assures the South ample financial accommodation. l ], Stock Market Reacts.
 During the latter half of the week the stock market showed decided | reactionary symptoms. This war
 AI Ir .- -.. ~I-- .4~. on the recent liberal rise, partly to the uneasiness caused by the exchange situation and partly by renewed for eign selling. As repeatedly intimated | in these advices, the crisis in exchange has become more and more acute, and | Is now perhaps the chief element of | distrust. At one time, sterling fell l as low as 4.5G, followed by a partial | recovery; although some experts were l predicting even lower rates This l amounted to a discount of about ] per cent for exchange on London | compared with IT per cent on Paris, | : 19 per cent on Berlin and 26 per cent 1 ] on Rome. The cause of these abnor- | nal rates do not need explanation. l That even greater uneasiness does not | exist, Is due to the fact that num- | Der of eminent British bankers are | on the way here for the purpose of | making an early adjustment. Tha l rush of enormous war contracts | continues. and provision for their | ], financing is a very urgent necessity | The excess of exports over imports, l which amounted to $1,000, ,000 for l the year ending June 30th may run l as high as $2,00O,0 100000 when the ] calendar year ending December 31st 1 Is reached. The only methods of set l tlement are either a return of Amer ican securities, imports of gold, or the | placing of regular Government loan s by. the British Government. The 1 best method to adopt is to issue a l short term loan, say for two, five, l seven and ten-year periods, which would be most likely to succeed. The shorter term issues could be- I think, placed on a 1-2 per cent basis, while the longer dates would require a higher rate, say, 5 per cent; all re- deemab1e in gold and to be free from taxation How the average Ameri- can investor would take such se- curity is somewhat problematica1, but many of our financial institutions and our big capitalists would undoubted- ly subscribe freely now that the dan- ger of war with Germany is passed. British credit has not yet been seri- ously strained and seems abundantly ' able to finance the war through the end. Yet the danger of overcrowding
 this market with excessive foreign
 obligations is not to be overlooked.
 The coming of a contingent of Lon
 dor's ab1est bankers to adjust the
 exchange situation adds immensely to the prestige of New York as a f1nan-
 cial center. It is an epoch making
 event; and, while London's pre-emin- 4ence cannot be questioned, it has been 4oraa anra rilu xMaa lxened and nlr own