New-York tribune., 1919-07-18
Heavy Buying by Importers
Causes Sharp Recovery
After Early Demoraliza-
ton in British Exchange
Bankers Name Committee
Leading Authorities to Ex-
change Ideas ON Means of
Meeting Threatening Sit
uation

Sterling exchange dove to a new low
level yesterday, and international
bankers here characterized the down.
ward movement Of European bills in
this market as the dominant influence
in finance.
Financiers are frankly puzzled at
the situation, which is o practical ex-
preston of Americas new position as
creditor Of the Old World. The ap-
aren't British policy of letting mat
ters drift is regarded as an obstacle
to corrective measures, as it is felt
that the initiative ought to come from
overseas.
Importers Buy Futures
Sterling cables were quoted as low
as $4.26& during the day, but toward
the close of trading there was sharp
s4.37. The Improvement was attrib, rib
uted largely to buying on the part of
importers against future needs to take
advantage of the cheapness of present
rates. Moreover, the short interest in
the market contributed to the upturn,
which most bankers regarded as tenn
porary feeling that the decline had not
yet run its full course.
In order to combine systematically
the opinions of all groups interested
in the exchange situation, the Associa-
ton OF Foreign Exchange Bankers, it
was announced yesterday, has ap-
pointed a special committee, consist
ing of b. A. Duis, Of the National CITY
Bank, chairman; W. H. Suydam, Of the
Hanover National Bank; North Nc
Lean, of the Mechanics and Metals
Bank; G. W. Higley, of the Equitable
Trust Company; F. l.. Appleby, of the
Union Bank of Canada, and r. o.
Saunders, Of the National Bank Of
South Africa
Spokesman for the newly chosen
committee said that they could do lit
tie more than clarifying their own ideas
ana get into communication with grain
ana cotton men, who have an immediate
interest in the situation
No Artificial Support
Bankers denied thar any artificial
support was given to sterling to cause
its recovery In some quarters it was
suggested that it was unlikely tia.
treat Britain would undertake off
clal!y to peg the market again, rs it
cid u2 to March. 1t would take a tie-
mendons sum, bankers say, to continue
the peg" One large dealer in ex-
change expressed his view that the
british had probably decided to keen
their hands off until sterling reached a
stlll lower point, and then would act
to retard precipitate declines and make
the market more orderly. 1t would
take relatively small amount Of sup
port, 1t is believed. to do this. When
Great Britain set the market in ster-
nag free in March it was predicted in
Parliament that the pound would drop
to 81.
On the other hand, a leading inter-
national banker here declared that the
problems involved were so enormous
that the aid Of governments was
Eecded. His proposal was that ar
rangement should be made to take Ger
tam bills out of the market at r. fixed
price, instead of supporting the mar
ket by lndlscriminate buying. To par
tlclpate IN such a scheme the United
states government would need a spe
cal appropriation from Congress- and
would have to work out plans in co.
operation with the governments of FIJI
rope.
Bankers interested in the formation
o. huge corporation of financiers and
business to finance the purchases Of
europe in this country took the view
'nat the generalization of the e1
change market would tend to pinch the
large export interests and make them
realize that they must aid in the VOL.
ing out of broad financing plans.