by
foreign selling of our securities occurred just after the beginning of
the panic period in October of 1907. Under continuous withdrawals of
New York capital from the foreign markets, exchange had sold down to a
very low point. Suddenly came the memorable selling movement of
"Americans" by English and German investors. Within two or three days
perhaps a million shares of American stocks were jettisoned in this
market by the foreigners, while exchange rose by leaps and bounds
nearly 10 cents to the pound, to the unheard-of price of 4.91. Nobody
had exchange to sell and almost overnight there had been created a
demand for tens of millions of dollars' worth.

3. The coming to maturity of American bonds held abroad is another
influencing factor closely kept track of by dealers in exchange. So
extensive is the total foreign investment in American bonds that issues
are coming due all the time. Where some especially large issue runs off
without being funded with new bonds, demand for exchange often becomes
very strong. Especially is this the case with the short-term issues of
the railroads and most especially with New York City revenue warrants
which have become so exceedingly popular a form of investment among the
foreign bankers. In spite of its mammoth debt, New York City is
continually putting out revenue warrants, the operation amounting, in
fact, to the issue of its notes. Of late years Paris bankers,
especially, have found the discounting of these "notes" a profitable
operation and have at times taken them in big blocks.

Whenever one of these blocks of revenue warrants matures and has to be
paid off, the exchange market is likely to be strongly affected.
Accumulation of exchange in preparation is likely to be carried on for
some weeks ahead, but even at that the resulting steady demand for
bills often exerts a decidedly stimulating influence. Experienced
exchange managers know at all times just what short-term issues are
coming due, about what proportion of the bonds or notes have found
their way to the other side, just how far ahead the exchange is likely
to be accumulated. Repayment operations of this kind are often almost a
dominant, though usually temporary, influence on the price of exchange.

4. Low money rates are the fourth great factor influencing foreign
exchange upward. Whenever money is cheap at any given center, and
borrowers are bidding only low rates for its use, lenders seek a more
profitable fiel