New-York tribune., 1920-01-31
[zchanse Rates
DropAggain; No
Halt in Sight
,,,orts From London, Paris
= and Rome Continue to
Increase Premiums Of
iered OIL American Dollar
'',nmp Seen i'll Exports
,,nLers Worried Over Gold
Output: Credit Structure
Of &. S. Strained Already

UItpNts y
of &. S. Strained Already
,,,,ien exchange rates on London,
:. and Rome, which are measure
y. financial plight of the Old
,,n sank still lower yesterday.
.lsrs in the Wall Street district
we're interviewed saw no indica-
{. ot halt in the collapse.
r. falling OF the currencies of the
:rsrsut nations in tAe interna-
|,.sI exchange market to unprec-
E,,,ed depths began early in 1919,
|a.r the policy OF price fixing in The
[..,na,ional exchange market was
|s.doned Sterling exchange, for ex-
|,pe. during the late years of the
Erld Var was "pegged" artiticially
| s7s. J. ?. Morgan & Co.
|.,l agents Of the British Treasury
this country, We're instructed TO
,r,hase all sterling bills offered in
E; market ar that price, and hence
E.r were quoted no lower. That was
var measure only, and early last
ling when Great Britain started 10
4iast her financial policy to postwar
Editions she decided to let sterling
ri its own level in terms of the
'-srican dollar. Sir George Paish.
Ir.jsh financial writer. startled -ha
sncial world last fall by predicting
3, the pound sterling. normally
nth s4.S66 would drop to 81. Yes
y:ay it was quoted at $3.505O, and
ac been quoted as low as $40.
Rapid Drop in Exchange
Likewise francs, Of Belgium and
,suce, and lire. the currency Of Italy,
ne kept at fixed level during the
b. but since artificial support has
Ken removed, rates on those countries
The New York market have declined
amstically and are now lower than
lsy have ever been before. According
! International bankers the bottom
IS not yet been reached. In normal
nes. when the channels Of trade are
s:logged and the currencies of the
.ropean countries are safely backed
gold the dollar Will buy 5.1s francs
7 lire. At the close of trading yes
''dav the dollar would buy 1880
rsnch francs; 1S.29 Belgian francs
ID 1854 lire. The Belgian rate wa S
trie more favorable TO Antwerp
ts.erday than the day before. because
reports that Belgium is to get a
'an in Canada, but the rates on Italy
nd France are the lowest on record.
The German mark, normally worth
y cents, was yesterday quoted at
u cents, and earlier in the week had
cen as low as 100. It has improved d
shtly IN value during the last few
lys, as the result purely OF con-
Mons IN The machinery OF specula-
On. The depreciation of sterling now
7ounts 70 about 2S per cent; that on
hnch exchange, 60 per cent; on Ital-
p 0S per cent, and on German. about
per cent. The Austrian crown is
''th about one-third of cent. and
e Russian ruble has no active market
ue.
The decline in the exchange value Of
e European moneys signifies the elc-
''lon OF the United States dollar to
ef increasing premiums. Europeans
quest Of dollars have to pay far
ore than the normal parity to get
en- en- This mounting of the dollar,
A0ush perhaps revealing Americas
~ AhaAcial supremacy, is not, in the
'i1lon OF many bankers, a wholly de-
aole thing. for it is gradually max
5 X impossible for the nations huge
lomers IN Europe to buy more goods
big European Purchases
pesp9te the panic in the exchange
nse', European purchases continued
we IN 1919. because the United
A'es reasury advanced 81 $50. .S91. 600
. . o. uneXhausted funds created dur
,ne war. because Of credits granted
.sfge industrial organizations and
'-@ ..s IN TINS country, and to a much
''sr WI extent because Of relatively
Al European loans foatcd in the
-silrah investment market. All these
isa'ents w created dollar credits on
,''n =. European customers could draw
me payment Of goods, but these
'.sS - are no longer being employed
"s scale considered necessary if
= : "sde IS to continue.
.ae December export figures. an
.aeed BY the Department of Com
" :. showed Il slump in the trade
:, Europe, and foreign exchange
-.s's ~ now assert that the conditions
.ae market Indicate that trade is
'~phs sui further. The president
VIZ OF the larre banks of Wall
~ predicted yesterday that the de-
.sg exchanges would soon reach
Ky '',a, "nere 1t would no longer be
.-.'ie is Tor Europeans 70 buv con
...eoly IN this country because the
.slom on the dollar would be pro
~. "s. II Tor example makes it cost
-. =. 70 IN Italian money TO place
'- VI american coal in Italy.
Europe in Need of Money
s'' while shipments from furonc 70
~ 20 nave been relatively small
- gong eastward from America to
>, ,.pS nave been unprcccdentedly ~
~ A. result. Europe need ID
,'ss more q dollars than Americans
!. ~. .ne'r curreacies. And The opera
: VA =, me familiar law of supply and
~.nc' winch economists say fixes
m'ce of bread and shoes and sky
IT determined the market Value
~ European currcncies. Normally
,.1enanges do not fuctuatc much
ls.ss nations vii settle adverse
,.S.ss sasss n gold, the international
.''e os Yalue. A. present, however,
~. result Of abnormal conditions
~. =, so9pt by the war, Great Britain
ne Continental countries have
;, '.s'es Ia existence against the cx-
~ go!d, and thug the disparitics
-. eHchange are not corrected in
Nv. ~ ne wartime embargo on gold
tsiS - ron the United Sta.es war
Il. esfsat Quantities of the metal
~ '..'wef INTO the Orient and 70
g. 81 hm.rica, while practically none
.s,. ~ ron Ancrica's debtors in
s,.s rrs' conscqaently, whereas in
s al bankers want ,h;4 cotn.ry