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Show Conference with foreign ! bankers may end trouble Decline in Foreign Exchange Simultaneous With Corrective Measures; New Era oi Thrift in Evidence; trade Satisfactory. By W. S. COUSINS, Editor Tho American Bankor. NEW YORK. Ppt. 5. It is significant signifi-cant that on both days on which a special consignment of gold ami securities arrived In New York trom the British financial center, sterling rxclunge registered Ita lowest acceptable, quotation, thus demonstrating the utter inadequacy of gold Imports to stem the tide of falling exchange rates. This is very easily explained. The latest lat-est statement Issued by the federal der tnrtment of commerce .hmva that while the excess of import h over exports for the month of July amounted to 186,OO0, "00. the excess for NYM months ending July ol was $.( 1. 000. 000. The most conservative con-servative estimate of the gold import into this country from London during t Ids MViTi - month period Is a bout $1 50. -000.000. leaving more than JS00.000.O00 to be provided for cither through the return re-turn of securities or through special credits. cred-its. Orders Not All Filled. And this Is only half the problem. Only a small portion of the "war orders" thus far placed in this count ry have as yet been filled by actual shipment, and the fetalis of the financing of this tremen-! tremen-! dous trade have yet to be worked out. i I'ntil this Is done we may logically ex-; ex-; pect more or less nervous tension in the '. international money markets. The demora llaat ion of t he ma rket on Tuesday, when demand sterling broke from ?4 M to 54.57. was the most se-( se-( vere and dramatic market decline which ! exchange dealers in this country liave ever experienced. A drop of 5J cents In 1 the value of the pound sterling In a single day is so far faftyond the compre-. compre-. hension of dealers that no one is willing ! to predict at what point the market will ! find the bottom. The English pound Is now aelllng at cents below its nor-I nor-I mal quotation. The exchange situation j has thus become an important factor in i the stock market, and it Is held to be . expert opinion that no new commitments should be taken on until permanent im-I im-I provement is definitely assured. Temporary Makeshifts. The shipments of gold may therefore be regarded merely as temporary makeshifts, make-shifts, pending the arrival of the special representatives of the British and French governments, who will confer with our own bankers on the subject. On one point. however, there is a perfect unanimity of opinion; that is that tho restoration of the pound sterling, the franc and mark to normal value I an absolute and positive posi-tive necessity. , largo credit may or may not be Uie solution uf the problem, i but business men of t h r til ted States may rail assured t ha i satisfactory arrangements ar-rangements will be made in time to prevent pre-vent any unecowsary Interruption In. our trade with the European countries. A prominent International banker makes the following accurate comment: "The bringing In of gold from Europe will not clear up the foreign exchange situation .In my Judgment this can onlv h done . through extending credit to Great Britain Brit-ain and perhaps to Franco and Ru1u on a large scale. Thia Is bound to b done in due time. There are a good manv difficulties to be overcome, but they are not insurmountable, 1 am not In favor of loaning large sums in those countries with American securities as col-lateral. col-lateral. I would not be opposed to buying those seen ri ties back from Europe, but I think that the loan or loans should be arranged on some other basis." Domestic Money Supply. There fs pet haps no more contemptible specimen of humanity than the miser The man who hoards his savings and hides his surplus in a tin can or th chimney hole not only rubs his money of its earning power, but deprives society of the capital that Is so necessary for " the turning of Hie wheels of progress. When, however, a man finds that his funds are accumulating to such an extent that he Is unable to direct them Into profitable I lines of Investment he can hardly be censured for existing conditions. In fact, ! It would be quite unfair to label him a I miser. The banks of the United States are confronted with such a condition at this time. The comptroller of the currency has already called attention to the fact that the national banks of the United ! States, on the date of their last ieports. I held $780,000,000 cash In their vaults in ! excess of the amount required by law. Cash Reserve Growing, i The New York clearing house last wees' reported the "exens reserve" of Ita I members to be SC04.799.SbO, compared j with an advenes balance ni s correspond-I correspond-I lng da te last year. Thene ITOfSH I ash holdings are not from choice, but from I necessity; from om Inability to find prop- er avenues of profitable Investment for our rapid iy Increasing wealth. By "Investment" "In-vestment" we do not refer specifically to stocks anl bonds, but may Include the many commercial and industrial oppnr-I oppnr-I tunlties which are vital concomitants of j our national progress- There Is therefore there-fore no cause for criti.-izinc the banks for their excessive surplus, but rather to cooperate co-operate with them In directing these funds In safe and productive channels- It Is I believed that our people have been saving i their money to an extent that means a sreat deal In the way or reserve buy-I buy-I ing powers. i We are again harvesting bumper crops that are to be sold abroad at war prices. We have taken hack from Europe an enormous volume of American securities, and It will require severe pressure on the part of the governments gov-ernments of Great Brifaln and France to force their own investors to sell additional ad-ditional quantities. We have more gold than we need, and the allied governments apparent !y are determined to send us much more. All these conditions are such a uirier nnything like normal tlmrs WOQld raa.ko for sirenff;h and activity in otir markets. Bond Issue Redeemed. New York City on Wrrincrviay of thir week called In and redeemed $S7,t06L.00l worth of one-year 6 per -ent corporate tock. iFSued on September 1. 1914. Thin is the largeFt redemprton hy any municipal mu-nicipal administration in America. The $57,000,000 is part of the N00,000.00n one-year one-year loan raised by the cit to meet maturing ma-turing indebtedness, much of which was hMd abroad and pfl yn hie i n gold . The Furopean war had disrupted the International Inter-national financial machinery- Bxchane on London and Taria had soared, and European investors were calling for American pold in exchanee for American securities, among the latter being the New York City's maturing obligations. Tti bankers had the cold, the city had to buv it to pay Its debt:;, and the city had to pav the price. The city had been paying 4 to 41 Der cent interest, but to raise $100,000,000, with all Europe Eu-rope at war. it had to pay 6 'per cent to a Bankers" syndicate. City Makes Fair Bargain. While more or less criticism was levelled lev-elled at the city authorities for this apparently ap-parently excessi ve interest rate, bank Ins experts were unanimous in their opinion that the city had mad a fair bargain, since the terms of the contract obligated obli-gated the underwriting bankers to provide pro-vide exchange or cold for meeting the London maturities, whereas sterling exchange ex-change was then ruling around $5. and the apprehension still existed that sales of our securities by Europe would drain the American market of all its gold. New capital issues, consisting of bonds, short-term notes and stocks, announced last month bv railroad and Industrial corporations cor-porations in the United States. InoJcat-I InoJcat-I ed a total of $68,480,000. according to the j Journal of Commerce compilation. This compares with $30,117,500 in August. 1914. which was one of the smallest monthlv totals on record growlnc out of the unsettlement in the general situation situa-tion Incident to outbreak of the war. Since January 1 the output has reached $901,783,600. This Is more than $300,000.-000 $300,000.-000 below the amount issued during the first eight mont-hs of 1914. These totals, as customary, embrace large sums em-ploved em-ploved to pay off maturing obligations and to refund different issues. To illustrate illus-trate this point, maturities next month will amount to $51,973,330. During the past month the railroads announced $.17.HK1 ,000 In new capital Issues Is-sues as against $15,9C'!,000 a year ago. The industrial total was $30,529,000. as against $14,196,500. The following table classifies the months financing (actual issues) and gives comparisons with a year ago: Bonds . ...$25,016,000 $13,031,000 H11.995 RAILROADS. U'K,. ; 1914. I Change. ! Bonds . .:$25.016,000 $13.021.00Ol'$l,rt95.0OO I Notes . . 12,935,000' 2.90O,0OO! 10,035,000 ' Stocks J j : Total ..i$3T, 951,000;$ Iff. 92 1.000 "$22, 030, 000 INDUSTRIAL CORPORATION'S. ; I9ir. 1 1914. j Change. Bonds . .'$23,987,0001$ 3.606. 0O0i$20.38l.O00 Notes . . f 2.750.O00! 490.500' 3.259,000 Stocks . 2,792,000! 10,100.000;z 7.308,000 "Total . . j$30.522,000i$14.196,500i$16.332,500 Or. Total ' 80S.JS0.0001 $30. 11 7, 500:?3S. 362.500 Plus. sMinus, The annual crop report compiled by the Continental & National hank of Chicago 1 gives the estimate yield of wheat for 1915 at 1.003,000,000 bushels; of corn, 2.983.000,-000 2.983.000,-000 bushels: of oats. 1,352,000.000 bushels, and of barley, 224,000.000 bushels. The estimated production of the five leading grain crops surpasses last year's by more than 600.000.000 bushels, and in the aggregate ag-gregate is the largest in the country's history, possibly not in the average yield per acir?. but In gross amount the increase in-crease in acreage accounting for the un-usual un-usual record In production. This is the I firBt time that the T'nited States has had j a wheat rrmt exceed in T rt billion bushels i |
