Salt Lake Telegram | 1921-05-29 | Page 29 | Recovery Process in Exchange is Slow

fir fir- r PROCESS t m EXCHANGE I IS SLOW Deterrent Influence Is Action Action Action Ac Ac- tion tion of Investors in Trying to Sell at Each Gain t NEW YORK May 28 There There are many obstacles to the upward movement of ot foreign exchanges Aside from the over- over influence ot of war of the allies to the United States there is s Europe's debt to te ite American creditors estimated between be- be tween kveen veen 4 and Events In Europe of ot economic or political nature are apt to arise which affect ex exchanges exchanges ex- ex changes adversely There are above all many Investors and speculators who be became became became be- be came committed in sterling francs etc at various levels 1 in the past downward movement mo and who seek to sell at each advance In other words word words a great load of foreign exchange is waiting to come out on every favorable opportunity and as exchange Roes ROCS higher it seems to encounter a still heavier load The The he exact nature of ot Europe's et commercial debt is uncertain To a cerT cerin T in ln extent it consists of ot balances on of ot foreign banks established for tor American firms which have not been withdrawn because of unfavorable foreign exchanges Every enhancement of ot foreign foreign for for- I eign currencies brings out a number of ot bills drawn against the tle balances I T To some extent e Europe's debt consists merchandise e 31 credits e I granted t ab by yC Amer American ican concerns to customers abroad commonly com com- referred to as open book bool credits On each fall in the premium of American I funds part of oC these accounts are paid gr other part of ot this credit consists of ot term term ort obligations maturing from day io to day On every improvement in ex exchanges x- x changes foreigners anticipate their maturities maturities ma ma- by purchasing exchange imme imme- v For about ten w weeks eks prior to a month ago sterling was almost stationary at I I about 3 90 It had the appearance of oC being pegged there but what was vas really happening wa was waS' that this level was being utilized as a selling position Since then I I London exchange has advanced to 4 U and andias has as been fairly steady around that fig fig- jure ure re This is likely to prove a resting I j lice for some time again or until mu much h I Jlong exchange has been gotten rid oft of t Bankers attribute this persistent rise in I sterling in spite of ot this selling movement move move- ment to seasonal movement of ot exchanges coupled with favorable developments in inthe inthe the reparations reparations' controversy As Europe's economic position continues to improve and as debtor countries Increase their exports exports ex ex- ports exchange should steadily improve But at best bankers say the process I will necessarily be slow by reason of that i overhanging supply In normal times there has usually been improvement in exchanges toward latter I part of April and throughout May while June and July have been quiet and stead steady I In August and the fall faU months exchanges have flave ave generally moved lower due to seasonal seasonal sea sea- I movement of ot crops Toward latter I part of oC August grain bills Dills come on the I market a month later the cotton bills I are te offered I Certain bankers maintain that because i of f thinness of the exchange market the thel thelast thelast l last st few months it has not been difficult for London speculators to cause an enhancement enhancement enhancement en en- In sterling They point out there has been scant offerings of oC bills recently i and these have easily been absorbed ab ab- ab- ab At the same time there has been speculation on settlement or of the reparations reparations reparations question While this is undoubtedly true to an I extent there is little doubt that condi condl- abroad are are assuming ss a more reassuring reassuring reassuring reas reas- suring appearance Settlement of ot reparations I bankers view as a definite step forward for for- ward Germany has declared she will pay a considerable part of ot Initial Instalment ol ot 1000 gold marks in tn exchange on London Paris and New York Reparations Reparations commission has already announced that these funds will be converted into American dollars as least subject to violent violent vio yb- lent fluctuations This transferring of ot funds to London and Paris and then to New York of ot course will affect foreign exchanges Bankers say the Immediate effect should be bo a rise in J French rench and English ex exchanges exchanges ex- ex changes as London and Paris bankers pursue their customary practice of ot first sweetening a market in which they plan any considerable considerable- selling Subsequently Subsequently Subsequently these currencies should ease off oft as reparation funds are transferred here Thus far there has been a a. marked marled ImProvement improvement improvement im im- Im- Im provement In London and Paris exchanges exchanges ex ex- changes but contrary to general expectations expectations the continentals have not shown any material declines