New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1915-09-01
Demand Sterling Now
Costs London 81 Cents
to the Pound.
BANKERS SAY EUROPE
WILL KEEP ON BUYING
Britain Can Stop Decline When
She Wishes by a Big
Loan Here.

became more firmly established thar
ever before Yesterday. when exchange
on London suffered its severest decline
of any day since this country's balance
Of trade began 70 swing in it's favor.
Foreign exchange dealers flooded tho
market with bills against shipments
abroad Of war munitions and food sup
plies. and there seemed to be no limit
to the level TO which the value of pound
sterling might fall. so far as its pur-
chasing power in the United States is
concerned.
Demand sterling. or what is more
commonly known as drafts PAYABLE at
sight in London, closed at the generally
quoted figure of 4.55l9. FIVE cents In
the pound below Mondays last quota
tion ard far below any previous price
in the memory of bankers. One impor-
tant international banking house was
said TO have offered demand at 4.54A.
The market throughout the dav was in
demoralized state. and bids we're at
times from one-half TO n GER. away
from the previously reported sale.
Tense excitement was apparent every
where in foreign exchange circles. and
this fact probably accounted foI some
of tho widely divergent quotations.
Sterling Per Cent Below :ormal.
At the generally accepted closing
rate for London exchange those using
this method of renting for goods
{ bought here would be forced TO pay b
/ per cent more than If sterling rates
were normal.
The depreciation amounted 10 more
than 81 cents TO the pound. franc eN
change is now selling at discount OF
about ~ per cent. while the percent
age for reichsmarks is even higher
With tvery prospect that f0r aign eN-
change rates will 20 lower while shlp-
ments Of goods are gong out IN thelf
uresent volume. the question Is Delng
asked. "Will Europe keep on buying IN
the face Of these conditions ~ BANK
ers say "ves" without hesitation Ifey
take the position that the new low rec
ords which are now almost daily oc-
currence possess no element over which !
TO be alarmed. They point out that II 1
is entirely a matter for Great britain {
10 decide how far she will permit rates I,
TO decline before taking up Tor seri-
Gus consideration the creation Of
large credit or loan in the united
States
In London and Paris. where the two
great war chests Of the Allies are To- ,
Gated. there is still held an enorgous
amount Of gold which could be sent
here if American bankers demanded - /
Europe also holds millions in American I
securities which could be liquidated II |
the necessity became acute. l.. +.
Loree, president Of the Delaware q (
Hudson Company, who was asked DIV /
bankers last fall TO mae an estimate /
of American railroad securities held oy /
foreign holders found that the grand |
total was SZ,576,401,3 ,342. This sum-
however, did not take into account the
securities returned TO this market since 1
the beginning Of the war. The amount |
of industrial securities held abroad mas
been estimated at $4,000 900.
Fven allowing for the heavy liquida I
zion that has undoubtedly taken place /
since the war started bankers are OF /
the opinion that there will be no great /
curtailment of Europe's buying power /
despite the tendency of exchange rates /
TO lower levels. 1t is pointed out that !
this country is the only market place |
in the world where Europe can obtain !
what she wants quickly, and that she .
will keep on ordering what she must
have. Should there be long deiay /
in the establishment of credit FOR me
Allies here of large size recourse could /
be had to renewed selling OF American ,
securities for considerable iength OF
time. in addition to further shipments /
Of gold. ., I
As for talk that there may be cancel F.
lations Of war orders on a large scale /
bankers thought that if curtailmtnt /
nolicy was adopted at all II would De /
In the things that might be termed lux
uries. The campaign for economy IN
consumption throughout England Is
making good progress, and u Is hoped
10 remedy the exchange evil IN some
degree by an increase IN exports ~
has been estimated that Great britain
reeds 10 reduce its imports by about
sTs mo 600 to about s300.OOO000 a
month. and TO increase its exports Dy
s75 600 900 a month TO s25OOOO,OOO a
month ;.1
II should. Of course, be borne IN NINA
2 that were the British to become more
/ economical and TO reduce their con-
/ sumption for a time, their efforts 10
/ sdiust the trade balance by keeping
\ down their expenditures would prob
( sbIv he assisted by fall in the price
+ n commodities. especially OF those .
things of which consumption IS re-
duced.
Trade Balance $4,000, 900 in August.
For the week ended August q e1-
norts from the Port Of New 1ork 10
taIIed S37 900. 900, Of which S9.OCO.OOO
vent to England. ss,000,OOO TO France
s5 600 600 TO Russia and Sl,OOOOOO %
ftaIv The favorable trade balance OF
Tho entire country was S83,2o9,O59.
From August to August y the pal
arce was S104.000,000; for the month
/ Of July. s124, $40. making total oi
YearIv 5000 600. 900 for the two months
/ Of the current fiscal year.
The new low record established yes
,erdav for sterling cables was 4.oo'4
! Other new lows were 6.54 Tor Itaiian
/ oVcbanqe and sos for reichSmarkS.
/ Roubles were frmer on the belief that
/ !, will not be many weeks before the
/ nerdanelles are opened, which would
/ ,eIease the great store of Russian gram
Wbat New York bankers want 10 do
/ J.. ,oroedv the situation is TO lend Great
px;,ain an enormous sum of money, 20
he snent il. paying hills here, on ap-
nroved collateral of high class Amer,
can railway and industrial ftocks and
! honds This, il is believed. Will restore
conditions TO nearly normal Apparent
l.. Great Britain intends 10 adopt THIS
Continued on pnte 2. column