New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-09-16
The Dollar in Foreign Exchange

All other DEVELOPMENTS in the local
foreign exchange market during the
last week were eclipsed by the de-
moralization Of Russian exchange. Fol
lowing receipt Of advices from Petro-
grad telling of the rebellion of korni-
loft against the Provisional Govern
ment headed by Premier Kerensky,
Russian rubes broke prccipitately, and
on Wednesday sold at the abnormally
low level of ia cents. This compared
with a close the week before of II cents
and normal par Of 81 cents. On the
later news of the failure Of the rebels
rubles recovered to 1914 cents.
The rest of the exchange market was
dull throughout the week. SO far as
could be observed from day 20 day
fluctuations the embargo on gold ex-
ports has had no appreciate effect on
rates. The machinery of the embargo
is now in full operation, and toward
the end of the week "a small shipment
Of gold out of the country 10 an undis
closed destination was announced.
As the war goes on and the position
assumed by the United States as banker
TO the Allies becomes more and more
important, more and more interest is
being shown in the dollar exchange
idea. An article in the current issue
Of "Thc Journal Of the American
Bankers Association" discusses dollar
exchange at considerable length.
1t is pointed out that if the war
should last till the end OF 1917 the Al
lies will owe us, in all probability,
about $4,000. 0OO,O 600. Not only have we
no more interest payments to make to
Europe. but we will no longer pay The
large sums we used to pay the Euro
pean shipping companies. The exports
Of the Allies are almost negligible as
compared with imports; on the other
hand. our exports 10 Europe are indis-
pcnsable for the prosecution of the
war. II must also be remembered that
our loans are being made in dollars,
and the Allies must return them in dol
lars. Therefore, England, France, Rus
STA and Italy must accumulate dollar
exchange for such repayment. The dol
lar is bound to be at a premium for
considerable while after the declaration
Of peace. Money i'm the United States
will be comparatively cheaper than in
the European centres, and New York
will be favorable discount market.
Even now the only obstacle in the path
Of the adoption Of dollar exchange is
the want of a proper machinery and the
insufficient experience Of banks. There
is no reason why our trade settlement
should not be altogether in dollars;
and it rests with our bankers and man
ufacturers to utilize the present op-
portunity to the utmost. Whether they
will take advantage Of it is a matter OF
conjecture.
The neutral countries, especially the
Latin-American republics, viii consti-
tute the best fields for the initial ex-
rerimcnts. II is only a matter of time
when all settlements i'm South Ameri-
can trade will be made in dollars and
dollars alone Hitherto efforts made to
introduce dollar exchange in othcr
parts of the world have been fragmen-
tary, and to a large extent uusatis-
factory. Chile is the only country
where il has been introduced with a
considerable measure of success; but
the future is more promising.
II you calculate the cost of the dollar
in terms of foreign money-that is, as
if you were buying dollars with pounds,
marks or francs-its value at the close
of last week, as compared with year
ago, would be about as follows: