Fall in Foreign Exchange

The past fortnight has witnessed a revival of violent fluctuations in the leading European exchanges: Sterling fell sharply, French francs struck a new low level for all time, and Belgian francs and Italian lire shrank perceptibly. German marks are so low as to be practically unquotable.

In part the decline may be explained as due to the usual exporting of American crops, especially high priced cotton. But it is obvious that the recent political ferment in Germany, the uncertainty as to the Kaiser and the Crown Prince, and the threatened breach between England and Italy on the one hand, and France on the other, have provided the basis for heavy speculative liquidation of European currencies in many of the world's exchange markets. In addition, there has probably been some shifting of European funds to New York for safekeeping, as well as speculative purchases of dollars abroad.