The Caldwell tribune. [volume] (Caldwell, Idaho Territory [Idaho]) 1883-1928, 1919-08-01
Business and Finances
BY w, S. Cousins, Editor American Benker

New York, July 26.-It is only
logical that the violent fluctuations
in foreign exchange, which have ex-
ticed wide comment in recent weeks,
should find reflection in an unsteady
development in other departments of
the financial markets. It has drawn
attention to the acuteness of the for
eign trade problem, and to the ne
cessity of quick and decisive action
on both sides OF the Atlantic in for
mulating plans for the financing OF
foreign trade.
It was coincident with the resump-
ton of trading in exchange on Ber-
lin and other German cities that the
spectacular break in sterling and
francs occurred. There has been
a tremendous increase in the offer
ings of sterling bills in our mar
kets. many of them representing
hold-over cotton and grain bills
which former holders had been keep
ing in expectation of a better mar
ket following the actual signing of
the peace treaty. Seeing their hopes
fast disappearing, they concluded.
rather reluctantly to get from under
ON the best terms available.
Suspension of business in Berlin
exchange was ordered in March, IT,
lust prior to our entrance into the
war. From a normal of 1882 cents
to the German mark, the final quot
atoms about that time were 1871
cents. The rate at which the mark
sold last week, 8 IA cents each, was
therefore about one-third the normal
price, or a discount Of 81 per cent.
Considerable confusion has been
caused by reason Of the fact that
bankers in this country are unable
to determine whether or not the bal
ances which they had in Germany
on the outbreak Of the war are
still available. The latest informa-
ton Is that American balances in
Germany have been attached by that
government, but not confiscated, and
there Is reason to hope that these
balances may be drawn upon at the
resumption Of trade movements. In
the meantime, American bankers and
exporters can avail themselves Of the
balances and facilitis of neutral Eu-
ropean nations, which are able to
offer reischmark exchange in any
quantity.
There Is a peculiar reason why the
stock market should fall and break
during critical periods In the foreign
situation, and this Is related directly
to the financing Of the two lines Of
enterprises referred to. While there
has been no oficial announcement Of
the methods to be pursued in financ-
ing our export trade, II Is evident
that something Is to be done, and
that that something will draw OF a
large sum from the domestic market.
Bankers have estimated that to keep
up our present foreign trade for the
balance Of the year win require from
three to four billion dollars, and it
Is most unlikely that this vast sum
can be obtained thru private chan
nels; add to this the five billion
needed by the treasury and an idea
may be had Of the drain to which
the money market will be subjected
With the necessity Of furnishing this
amount Of money for special pur-
poses, Wall Street has begun to re-
alize that funds for speculative pur-
poses will be somewhat circumscribed
during the balance Of this year at
least.
Two phases Of the subject have
been considered in passing, first, the
strong position Of the average in
weston, who has made big profits
since January LIST, and is therefore
able to finance himself to a larger
extent than during any previous bull
market; second, the possibility Of
arranging for government and pri-
vate credits on this side Of the wa
ter thru powerful syndicates Of in
ternatioDal bankers, the proceeds to
be employed in the purchase OF our
commodities. 1t Is obvious that II
we wish to extend out trade to for
eign markets we must make eve-y
reasonable eort to assist in the ma
ancing of the export movements.
At the present time there are de-