The Birmingham age-herald., 1915-08-17
DOLLAR RULES IN THE
 FINANCIAL WORLD
 AS EXCHANGE RATES SINK TO NEW DEPTHS
(Coutinued From Page one)

CTS. They were the sufferers and theirs it was the consensus of opinion should be the task of setting the money mar ket to rights.
 How this would be done was the ob-
 iect of keen consideration and some speculation. It was believed that the present abnormal situation would not
 be permitted to continue long. The ob ylous remedy seemed to be to sell American securities held abroad. and when this contingency was studied the situation seemed to be pregnant with unique possibilities.
 great many millions of American securities, payable in dollars, are held abroad chiefly high class railroad
 bonds and preferred stock of selected list of American industries. Should these securities be sold at the present exchange rates in foreign markets they would fetch far more than the pur-
 chasers paid for them, due entirely to the depression of exchange.
 Thus, a 5000 American bond sold in Paris at par would, on account of the prevailing exchange rate, bring approx imately 5000 francs When purchased at a par a year ago 1t cost the purch- aser approximately 5050 francs. The net profit would be about 590 francs or I about 19 per cent, the percentage Of depression in francs in American ex
 change markets. In London the profit would be approximately "A per cent and in Rome the profit would be ap. proyimately per cent.
 Foreign Credit Necessary Establishment here of a big foreign credit, estimated conservatively at | $500, 900, was thought to be abso- 1 lutely necessary If exchange rates were l to be restored to anything like nor nal.
 The assertion that dollars and not l pounds sterling had been the financial standard on which all contracts for war supplies had been accepted in this | country came as a distinct surprise. l Aside from marking the temporary pass I irg of Londons control of the world S | treasure chests, it relieved anxiety on
 behalf of investors in so-called war specalties in the stock market who
 were confronted with the prospect of 8
 large shrinkage in prospective profits due to prevailing low rates of ex. | change
 l Another optimistic feature of the for | eign exchange situation was the gem | era1 belief that second large ship ! ment of gold was on it's way to New York. Approximately S20,000,000 in god coin reached here last week from Lon | don. Wall street heard today the sec l ond shipment of gold was coming from | ! shipments too, 1t was believed, would | follow, all of which were expected to | have a corrective effect upon the ex. | change markets. Bankers were reticept ! in discussing these reports and no of l fcial confirmation of them could be l obtained.
 1 The last of the factors which entered 1 into the creation of today's unparal- leled exchange situation was the delay | in obtaining and executing cable or ders. Thus, at about the same time 1 American securities were selling 3 widely divergent figures here and | abroad. notable case was that of l Union Pacific, which was down points I in the London markets and made a net gain of ss of one point here This situation was ascribed largely to the British censors control of the cables Leading bankers were almost unani- | nous in the belief that England had
 failed to awaken to the fact that she had lost control of the worlds finances, | temporarily at least, and that by falling | to establish speedily an adequate credit | here still clung to the delusion that the pound sterling was the standard of in | ternational finance today, as 1t has been for generations past. As soon as Lon . | don bankers realize fully that New York is in control and establish the | credit needed to protect their money, | it was thought exchange rates would
 return to figures nearly approaching | normal