The sun. [volume] (New York [N.Y.]) 1833-1916, 1915-06-21

or not the decline In the pound sterling
is partly a gauge OF currency deprecia-
ton In Great Britain and an anticipa-
ton Of more, It's essential cause Is the
fact that there Is less and less need
Of the pound sterling all over the world
as Tire medium OF international finan-
cial settlements.
Meanwhile Great Britain and other
countries have moro and more need of
finding a market for the pound ster-
ling or obtaining an acceptable substi-
tute for II. In the upshot Great Brit
ain must use the pound sterling less
and can only do IL by recourse to the
American dollar. Access to the new
medium OF International finance can be
effected through the negotiation of cred
its at the new world financial centre
witch has been created at New York
In order to settle the heavy balances
accumulating against British finance In
the new commercial clearing house Of
the world,
When there 10 something which must
be don the financial community feels
well assured that II will be done. Un-
der the circumstances which the war
'as brought about a better market
can hardly be established for the pound
sterling. Therefore British finance must
CUntriNe some means By which IL can
Use Tile pOuTu Sterling Tess uTu Hlhho
more use OF the dollar. which is becom-
,ng the DIN current of the world mar
Net. The way out of the difficulty Is
lear and easy and only the stuoborness
u British finance. with its new aduI-
tcration of Government control, Is re-
.pUnsible for preventing the way out
from being taken before this.
True to The tradition Of free markets
Great Britain has been sending gold to
New York to keep British credit good.
II will go on sending as much gold as
possible. but there IL not gold enough IN
the world to settle the balances which
accrue In all the different kinds Of clear
.ng houses. no matter by what name they
are called. Commerce is not financed
that way. It is financed by credit. and
credit must be awaited OF to adjust tao
vast balances which will go on p!linS
up against Great Britain and tributary
countries.
our curtailment OF trade imports and
customary expenditure abroad Ia work
ing to augment these balance all the
time. Something must take the place or
tho debts which usually more than
offset our trade credits. Nor is there
much TO be done with such makeshifts
as have been relied upon. the shipment
OF gold. the liquidation OF American
! securities owned abroad. or the ~plcdgine
of such securities as collateral for loans.
The only way In which the situation
can be handled at all on a comprehen
sive scale Is to make a market here for
| the Government securities or GREAT
| Britain, France and other nations which
| will place our debtors in funds to NEE;
| the commercial bills which are being
| Drawn upon them. For the opening or
| such a market the vendors OF securities
| nave primary responsibility. and II mas
| ,ong been manifest that wheneve
| British finance decided TO swallow Its
| pf.de and take the necessary steps TO
| deal with the difficulty OF the foreign
Exchanges the situation would be ad-
iusted.
Because Il !s Inherent In the ve:y
nature OF such international financial
| lower as We are acquiring that IL Will
I've used to promote international COM
merce through the acceptance OF securi-
| les In payment for goods-the OId World
| has been doing II for generations-we
Oil certainly lake securities in eS-
! ,hange for our goods II securities, other
wise satisfactory. are offered on the
| right terms. a market is waiting here
| .or British Treasury short time notes.
| runnlng for example. for two or three
years. in which "A portion OF the colossal
| lending power at the command OF our
| bankers EAR be employed II the secur-
| ties are proffered on "A proper basis.
1t may be a moderate market a;
the start. but II will not he altogether
a novelty. More than $500. 10000 Of
foreign loans have been placed IN ;his
country this year. and We have fairy
passed the experimental stage OF world
banking. 1t is of more Importance
that the market will surely grow as
II is seen how satisfactory are the re-
suits in the expansion OF Industrial &C
tivit!es which contribute to foreign com
merce, for with resort 10 the American
market for foreign securities the cred
Is Will be furnished which are needed
to pay FOR the products OF American
enterprise which Great Britain and her
allies must have. What is more, Amer
lean finance will firmly establish itsel!
IN the world banking business. wherein,
( Il does its part and Is equal to thu
opportunity presented. 1t will consol!-
date it's leadership in the next few
years.