New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1916-05-01

nolIed here. Expansion OF currency
and bank credit on scale never ne
fore seen has been used by the war
ring nations TO enable them 60 finance
their needs. In ordinary times such
tremendous purchases rs have been
made here and unusual shipments OF
rold i'm payment would have been cor
rcctcd by slowing down Of buying as
our prices rose.
As II is. however. governments at
war must have supplies, and deprecl-
atcd currcucics abroad have made
prices i'm Europe rise more than mere.
Exchange rates, adjusting themselves
30 the reduced value Of the deprecated
currcncies abroad. would. # left 10
their natural course have done some
thing toward checking European pur-
chascs on this side Of the water In
stead. aids 10 credit Of the beliigerentS
have kept exchange at artificial levels
and full cmplovmc1t Of the civil popu-
iations Of tho bclligereut nations mas
given them n false buying power.
This inflow Of gold and continued
foreign purchasing for government and
private account have greatly raised the
level Of prices in this country. The re
suit is that, apart from more general
employment. without higher wages
labor is not only not benefting by the
increase Of prosperity here, but Is
worse OF. because u costs more TO live.
Movements toward better wages must
be expected. The trouble is that pres
cnt high prices Of goods will not con
tinuc. and II will be difficult 10 bring
wages down again. When the war IS
over our industries must meet world
competition in the universal adjust
mcnt OF trade that is 10 follow. and our
labor costs cannot be greatly out Of
line with those elsewhere II We are 10
find foreign markets for the goods for
whose production We have created new
facilities.
Money Still Closely Held.
Money for market purposes was still
closely held by lending institutions and
rates for call money on Monday got
up TO 3i2 per cent, which was the high
est since shortly after the Stock EX-
change was reopcned, in 1914. Time
accommodation was less freely offered,
and here, too. rates were frmcr, with
most loans made at 81 per cent early
in the week. Later there was some
slight relaxation. but call loans were
renewed most days 81 2ia per cent, for
the first time this year.
When the nature Of tho unusual
emergency confronting the country is
considered. money rates were little af-
fccted. This cannot be ascrbed 10 the
surplus position OF the banks, for ex-
cess Of reserve is much lower since we
stopped drawing gold from England in
volume. More and more bankers are
beginning TO Hscribe the relative stead
mess in the money market TO the in
fuence Of the new banking system.
While 1t is true that rediscount facili-
ties are not offered on loans made for
speculative purposes, funds are re
leased through discount OF commercial
paper and may be applied in any fash
ion desired. Even though little actual
rediscounting is done, the knowledge
that such resources are available is
ever present 70 prevent alarm over pos
sible scarcity.
As chances of settlement with Ger
many seemed TO brighten exchange on
Berlin lost a good part OF its rise Of
the week before. French exchange con-
tinued TO improve, Paris checks az
1929 francs FOR dollar selling at the
best rate since recovery set in. An
other reduction OF gold at the Bank Of
France-this time Of $4,000, 1000
showed that the precious metal was
still being exported 70 help protect
the French exchange position.