The Alaska daily empire., 1915-09-02
FOREIGN EXCHANGE AND BUSINESS

The low price of European exchange in the United States is the direct result of the great trade balance in favor of this country. We selling to foreign countries from sl25OOO0Oo to sl5OOOOOOO month more than we are buying Those who buy from Americans having credit at London banks paying for this great amount of exports in London exchange The London banks give the American banks credit for the exchange American banks draw upon the credit thus established to pay for American purchases. However stated we are selling SO much more than we are pur chasing that we have accumulated S50O0O0000 in cred 1t that we do not need at London It would have been much larger if Englishmen and Frenchmen had not sold in the United States S5OOoo0ooO worth of American securities and accepted payment in London exchange; n 1t had not been Canada and Canadian Provinces and municipalities and other foreign tries and many citizens of foreign countries had not sold bonds or other evidences of indebtedness in the United States and accepted London exchange in payment and if 1t had been for the shipment of s2oOOoOOOO to S250OOOOOO gold to the United States
 further depressing influence on the price Of Eur opean exchange is the circumstance that foreign tries have contracted in the United States for than S15OOO0OOOO worth of munitions and the fur ther circumstance that another great agricultural is being harvested and 1t is certain that large quantities of that will be wanted in Europe. These things ndi cato balance of trade in favor for this year Of more than s2OOOOOOOOO, and that the London banks win owe us that amount in addition to the S5OOOooOOO that they already owe us American bankers have said that they will not carry the exchange that is necessary to pay the bills for all of the things that Europe is buying This will make it necessary for Europeans to pay their debts in gold arrange credits among oth CT classes than those dealing in commercial paper by selling bonds for instance. or American securities t,, ,roooolc fho hanks in payment for commercial paper-or quit buying
 The disinciinaton of American bankers to pay money to American manufacturers other producers for London exchange has resulted in compelling the latter to sell London exchange at lower rates-hence we find London pounds sterling. which represent s4S65s in gold selling in New York low S4.5S, and the exchange of other Nations selling lower
 The interest of the European countries in this sit nation IS as great or greater than counrys for the reason that all of the war contracts. which aggregate S15O000OOO0 or more. provide for payment in American dollars This that the foreign tries have to bear the Of exchange and their pur chases cost them that much It is predicted for instance that English pounds sterling will fall to S45o That would mean that for every Sl England con tracts to pay in the United she must pay SLOT the seven cents being for exchange
 To offset this situation Great Britain and France have been urging those of their country who hold American securities to sell them. either directly to Americans or to the governments which in turn sell them to Americans In either event the proceeds are turned over to American bankers, which issue London exchange and reduce the indebtedness to them of the London banks.
 But the inability to get the British and French holders of American securities to sell their American holdings at present prices has made this process of paying debts slow The result has been according to our dispatches decision the part of France and Great Britain to sell bonds American investors It is proposed to make them the American investor five per cent It Is likely that Canada win be asked join Great Britain and France in signing these bonds for
 the reason that Canadian credit s higher in the United