New-York tribune., 1920-02-04
Lowest Mark
Is Reached
By Exchange
Continued from page

they can cut down the loans which
carry them.
In one Of the large money reservoirs
tho opinion was expressed that the
Reserve Board Was handling the situa-
ton scientifically. and was anxious to
have the readjustment away from over
expansion gradual and not preciptate
Liberty bonds sank to new low prices
Yesterday. This decline is in response
to heavy selling caused partly by the
rise in rediscount rates at the Federal
Reserve Bank which make it unprofit-
able to carry the bonds by means of
bank loans, ana partly by the general
Tightening of credit which induced
business mon unable to get all the
accommodation desired at the banks
to realize cash through the sale Of
their Liberty bonds, which have a ready
and quick market. The second as and
second 4hs sold lower than 500 per
500 bond for the first time. and the
second ia at the close were quoted at
S99409O. The yield on the Victory
Ans, which mature within two to three
years, exceeded $40 Der cent.
In the field Of domestic commerce
the feeling Of caution is beginning to
grow Although many buyers from the
interior arc now in New York, they
are not clamoring for merchandise in
the same way they did last season. but
are shopping more. p. A. O'Connell, of
the National Garment Retailers Asso-
citation, told 500 apparel men at the
annual convention of thaht body, in
his opinion, the peak of commodity
prices had been reached and that the
purchasing public had absorbed all the
high prices they could.
The signs that Americas trade with
Europe is progressively becoming
Offering of European bills arising from
new transactions is falling off in vol
ume and that the demand for European
bottoms was smaller tended to con-
firm the prediction Of bankers that for
eign exchange at the present levels
would be destructive to commerce.
Although the closing rate for demand
sterling was So 1926, compared with q
normal parity of $4.866. the exchange
expert Of one of the largest banks said
that, If one tried 10 sell 100000
pounds sterling small sum compared
with the size of the trade balances
i'C SOhlu llOl Etl .pD JOI cdCn DOunQ
On the other hand, he said, the market
was so thin that Il Great Britain
shipped S50,O00,O00 in gold to this
country the psychological effect would
be 50 great that you could not see
the market because of the dust" caused
by the scramble of buyers
1t was reported that several banks
would no longer discount dollar bills
Of exchange but would merely hold
them for collection. BY discountine
the bills the banks tic up capital until
the paper natures, but by refusing tc
they throw the burden on the exporter o,
manufacturer and make it impossible lie
ultimately for him 20 continue opera.
I tions. Officers of the leading banks
denied that they had definitely adopted
this policy, but said that they were
discouraging their customers from ac-
cepting dollar bills from countries
where the dollars were at an excessive
premium. Bankers fear that the point
will soon be reached where dollars will
not be available in certain countries
and that foreign buyers will thus be
unable to meet their commitments
This would throw the merchandise
shlppcd into warehouses, and the Amer
ican seller would be without payment.
ror THIS reason, one authority sug-
gested that it would be better fo,
American sellers to accept Swedish
french, Belgian and other foreign bills
from their customers instead of dollar