New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1915-01-02
Emergency Measures Unprecedented as Crisis
That Prompted Them, Overcome
First Shock to Credit.
CAUTION IS STILL NEEDED HERE
Sobered Attitude of American People Should Aid Us
to Do Our Part in Repairing EurOpes Waste
of Men and Materials

( fsc tea, was for q while all but
/ thrown into chaos. London, the
money centre OF the world, was at
first at a loss 20 know what could be
done with the great amount OF bills
+ OF exchange payable there. These
we're estimated az between Sl,5OO,OOO,-
600 and $500. 100000 outstanding at
the beginning OF the war. on govern
ment guarantee the Bank Of England
agreed 10 rediscount these bills freely.
The bank discounted around 5000
100000. Of which perhaps S260,000.OOO
cannot be collected until the end Of the
war. Emergency currency, Of first fat
money but later backed by reserve
Of gold. was issued in Great Britain.
In spite Of al this assistance TO the
market, tho Bank Of England added
/ immense amounts 90 its gold In Ger
many, too, the Imperial Bank reports
| It's gold greatly increased through the
/ patriotic aid Of the German people.
In this country IL had been custom
airy IN the summer, when exports were
light for the great financial houses TO
I sell exchange on Europe, principally,
Of course, on London, against credits
abroad, covering their commitments
when shipment Of grain and cotton IN
| the fall made bills of exchange plenu-
/ ful. When the course OF trade was
overturned and the customary outflow
of commodities was interrupted, the
price OF exchange rose TO heights pre-
viousIv unheard OF. Sight drafts on
London from ASS in the pound at the
end Of July became practically unob-
taiuable az e 90 early In August. Europe,
IN addition to some sS0,000,0OO already
taken from this country earlier in the
year drew heavily on our gold, calling
in balances and selling our securities
here without regard for the price OBJ
tanned. Huge as was our stock OF the
precious metal, IL was realized that u
could not continue 20 meet so great 3
drain.
Payment Of Debts to Europe.
After the closing OF the Stock Ex-
change here, our securities could no
longer be sent back to pay for gold.
Then Il remained for rs to meet re
ouirements Of commercial payments
due abroad and Of maturing oblgs
t}ons held on the other side. Under
leadership Of the Federal Reserve
Board banks Of our large cities sub
soribed TO q gold pool Of Sl00,000.oOO.
The Bank Of England having opened
branch a. Ottawa, the pool managers
shipped gold there and sold exchange
on London against IL. This steadled
exchange rates.
The City Of New York had borrowed
on revenue warrants shout SsO,0OO,OOO
payable I'm France and Great Britain
in the last four months Of tho year.
Ordinarily lower exchange rates IN the
autumn would have justified such Dor
rowing. With exchange almost unob-
tainable 10 became necessary 70 pre-
oh hT ~ n o. q
for payment I'm gold. Practically oil
the banks % the city subscribed 20 q
500 100000 issue Of 6 per cent notes
Of the City Of New York, and pledged
themselves 70 pay so per cent Of their
subscriptions in gold or exchange II
required. Other corporate issues ma
turing in Europe we're met without any
great difficulty. This evidence of our
willingness and ability 20 meet our
debts aided greatly in restoring inter-
national arrangements.
Commodity shipments Increased. Our
record wheat harvest. coming a. time
Of shortage elsewhere, was purchased
for export at high prices. Later war
supplies added TO our payment in goods
% Europe. An import excess in August
was changed in September TO pre-
ponderance Of shipments amounting 20
nearly s17,000,000. This favorable bal
ance was increased 20 more than SOL
600 900 in October, over S79,OOO,0OO in
November, and last month an even bet
ter record was made In the mean time
we shipped 70 Canada for British &C
count some S85 900 900 after the first
Of August. In 1914 we sent Europe
nearly 5000. 100000, feat unprecedent-
ed in the history Of nations.
Cot@o, p.li.F DiRrrU
A record crop Of cotton in & year
when the European market for a time
failed absolutely presented a serious
problem. Suggestions for holding the
surplus through the use Of government
funds and credit caused much uneasi-
ness. Bankers finally subscribed 10 a
pool 20 lend on cotton on the basis Of
six cents pound. Northern and
Western banks agreed 10 furnish
three-quarters Of the funds, and banks
IN the cotton belt TO supply the rest
and assume the risk. This plan aided
in preventing passage of absurd bills
for the relief proposed in Congress
and served 70 steady the price Of the
staple.
As yet this bankers cotton pool has
hardly begun operations, and the vol
ume Of actual loans appears doubtful
Reopening OF cotton exchanges, accom-
plished through the help OF a banking
syndicate here, was Of more Immediate
assistance. Open trading established q
market price and allowed spinners and
other buyers 10 sell against the cotton
they purchased, and so insure them
selves against fuctuation IN the price
of raw material This country WAS
slow In demanding that cotton be rec
ognized as non-contrsband. Eventual
ly this was accomplished, and in De-
cember export was al normal volume,
though the seasons total shipments so
far is lamentsbly low.
After the Stock Exchange closed
need of some sort OF market for Sc
curities was recognized. Permission
wa5 given to send buying and selling
/ orders at not lower than the closing
prices OF the last day OF trading 70 the
Stock Exchange Clearing House. Idle
/ funds accumulated and demanded in
vestment. The success Of New York
+ City's note issue was followed by buy
ing Of short-term corporate notes and
municipal bonds. High grade corporate
bonds then were IN demand and were
allowed 10 be dealt in at concessions
from the final figures Of July 80.
AZ a test restrictions were removed
on all unlisted securities, and trading
in such issues was resumed without
difficulty. Bonds were dealt in on the
floor OF the stock Exchange AZ mini
mum prices before the end Of Novem-
Der. and early last month similar
trading was begun in listed stocks. As
A partial check against sudden Euro
pesn liquidation dealings for delayed
delivery were not allowed, and no
transactions we're permitted below
minimum prices established
Security Prices Recover.
In general. official security prices