New-York tribune., 1920-02-04
Lowest Mark
Reached by
Exchangeas
Stocks Fall
Dollar Value of Foreign
Moneys at New Level
as Securities and Lib
ertv Bond Prices Drop
Ocean Shipping
Rates Declining
-

Odi ~ ~ Il oAAO"S
Slump With Trad e
Abroad Has Begun
These important developments
took place yesterday in America s
economic readiustment to a peace
basis:
The dollar rose to the greatest
premium in history over the cur
rencies of the former belligerent
nations of Europe.
Prices on the New York Stock
Exchange, in response to unset
tlement in the foreign exchanges
and in the domestic money mar
ket, declined sharply.
Bankers have unofficially agreed
on fixed supply of credit for the
stock market.
Liberty bonds sold at the lowest
prices on record
AS result of the falling of the
European exchanges, exports to
Europe are shrinking, the demand
for cargo space on the transat-
lantic liners is smaller and
freight rates are topping.
Exchange Break Unchecked
The break in exchange rates was
drastic and unchecked. The discount
Of sterling in New York increased ten
cents over that prevailing the day be-
fore, and foreign exchange bankers
nere described the market as "panicky.'
Despite It's enhanced value in the
terms of European currencies, the dol
ar is below par in Argentina, and for
his reason group of American banks
headed by the National City Bank, yes
iarday shipped S17.11O.O0O in United
States gold coin to the South American
republic to settle international trade
balances. The Argentine credit was
built up largely through the sale of
wheat, and yesterdays geld shipment
9erlod of days.
Bankers. who had looked with some
concern on the outflow Of gold to South
America and to the Orient, yesterday
called attehtion to the fact that Japa-
nese yen, which had been at premium
in this market for several years. had
fallen TO a discount. Normally. accord
ing to an expert on Oriental financial
conditions. this drop of the yen would
mark the end OF the shipment of Amer
abnormal situation, it was indicated
that Japan, in her scramble for gold,
might further depreciate the exchange
value of her currency in order to get
the yellow metal. The depreciation Of
the yen, it is said. is due to the shift
ing OF the balance of trade between
Japan and the United States in favor
OF TINS country, as d result of Japan's
recent heavy purchases in this country.
IN the war years Japan built up large
balances IN this country, which are now
estimated to be as high as $4OO, ,00O,OOO
Falling OF or Exports
AS result of the collapse of ex-
change rates on European countries
exports to Europe have been falling off
ana the demand for cargo space in
transatlantic steamers is fast shrink
ing according to shipping men. Rates
are gong lower and, in the case of
some commodities, have dropped as
much as 90 per cent in the last two
months furthermore, shipping author
iues, explaining that actual shipping
usually iass some weeks behind the
making OF transact tions, predict still
,urtner contracting of cargoes in the
.u.u'e DIS the result OF present exchange
shortage of cargo space was marked
but to-day the situation has CHANGED
oo lhat some steamers have been taken
on on transatlantic routes and diverted to
oouth American trade.
Rejecting the smash in the excbanco
market, but more particularly the tight
aomestlc credit situation, which is con-
nected IN part with the foreign tangle.
1Hairoad and industrial stocks on the
I'VE" York Stock Exchange fell to the
.o"est level reached in 1920, according
70 Inc Irihune's daily averages OBJ
oerSers OF the market said there was a
GOOD deal of actual liquidation. Simi-
iai aecllnes took place on the curb and
Al The cotton and grain markets.
Stocks in Downward Trend
Z. al the close of trading in the Stock
"t'6Ns american tobacco was
quoted at 25o1s, off 147s points: Bald
WIN locomotive, HIS, off 5g points:
I;ruclble s;r Steel, PIP, off IN; Union Pa
enc, enc, l20A, off "A, and United States
otee, 1929, off IS Liberty bonds sold
AZ new low level.
AS a reflex of the policy of the Fed
erai Reserve Board to curtail credit
ssApahslon and gradually to cause de-
rras,on' the rate on call loans for Stock
n~ehahge purposes remained at Ia per
vent VEN all through the day The rate
was within per cent of the highest
aeme"ai e rate IN recent years. Ten per
s.". y. was bld Tor time loans, but even
as mat figure, which is new high
secord, no loans were actually made,
90 ma, lar as could be leacned.
mat the leading money lending in
s1tutions of the financial district had
{ e6ncerted policy in regard to Stock
NNAenange loans was admitted in au-
ssaoIitativc quarters. One leading
TANKER said that this understanding
assured the segregation of fixed sum
~. sor needs of the board, and that if no
engagements ai had been made the spec
ua'ators IN stocks might be more mer-
ssnessiy starved. Moreover, it became
ssaown that responsible bankers in at
.smpting to cooperate with the Fed
M ssai Reserve Board are advising their
commercial customers to reduce their
s.asentories, that is, their holdings of