New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1890-04-11
AN INTERNATIONAL BANK.
prpoRT OF TIE COMMITTEE ON BANKING
TO THE PANAMERICAN CONFERENCE.

n
BRANCHES IN THE COUNTRIES khfhH'
SCENTED AT THE CONFERENCE
THE 1,NY ARGUMENTS FOR
SIGH Az INSTITUTION.
WASHINGTON. Noril 1O.-Pursuant 10 resolution
oasscd at the meeting Of the Internauonal Amer
'can Conference IN December :, 1881 comhl''cc
..eie,ino % 7 NJ. IIurtado, representing the
United States Colombia; CharieS N. ril"., lor
,ho I-ri,cd Stats: Manuel Aragon. for Costa Rica,
, ca1,.ador .. Nendonca for Brazil. APP
roin+od n consider and report upon the methods
s:.-,-o,;n, opl extending the banking and credit
s-.aa,e hot,vec, the several countries represented
e., tho corfcrcne. II has submitted as the result
% -. al;tora+ ons the following report:
Wv Committee believes that there is no field of inquiry
falling within tie province Of tbs Conference ior 'e eN-
tension o, IntorAmcIican commerce more fundamentally
,,po,,,nt :an that OF international American banking
and that in IA, future o; the commercial relations
- With South and Central America will depend as
largely upon complete and prompt development OF IN
,crnatona banning facilities as upon any oer siSie con-
dion whatever
obonisu OF cchanre secondary, II at all. only to the
question q mechanism Of transportation Even after
hotter means Of transportation than those which exist shall
have been established. will be impossible for the COM
merce between american Nations to be greatly enlarged
unless there be supplied their merchants means for
Quoting the banking business which shall in some measure
lbc.o them the practical monopoly of credit which
i now hold by he bankers Of London and the European
Continent. II be enlargement OF the means OF
Transportation uaccompanid with equal extension OF
financial facilitie only partial benefits will be derived
from the former compared with the benefits which might
be derived tie two Improvements 70 progress together
Your committee IS OF the opinion the be-
tween American countries might be greatly extended
proper could be found for facilitating direct eN-
changes among e money the several countries
fhpre Wtra
movements in transportation The first ecct would be
% afford a direct clcarance-inaccount OF goods
exported AGAINST goods imported. The large amount OF
commissions paid the European bankers could not
only be decreased such commissions would be paid TO
American bankers or merchants themselves. and in this
way share profits which co almost solidy to
the European msney could be kept in the financial
eentEls Of this Continent
TIE QUESTION OF LONG CREDITS.
There does not exist to-day the countries repre-
sn,d in this Conference any bankers
exchanges credits for instance, drafts upon the United
States obainabe at all in many OF the markets OF
South America and in most OF them are only sa!sbe at
discount below the sterling equivalent. In like manner
drafts upon South and Central America practically I'M
known in the money markets Of NewYork Philadelphia.
Baltimore New Orleans, Chicago and Boston
The point has been made that to extend business BE-
tween our States long credits must be given HOW Is IL
no.s. for manufacturers merchants distant points
to form relations OF such character as to justify the
granting Of long cIcdsl At present such relations are
chi
and bankers which not interested IN the extension oil
trade between the countries represented in THIS
Conference except in SecOndar- and subordinate sense
Tho 1enson Of trade Europe and the Americas,
not between the Americas Themselves is their first care
NV the estab Of wcorsanizcd system OF inter
national American banking merchants and Manufact-
urcrs would be able to establish improved credit relations
and those administering the s'stem in the several money
markets OF the Americas would Immediately become inter
ested in fostering such reationS ana iacha'hg such
he
The merchants Of the United States now importing
goods from the counties Of South and Central America
make importatons, as the Investigations OF your
committee show, almost Without exception through 'he
use of English bankers credits. The total foreign CON-
merce OF the 1ndts, Mexico South and Central
America amounted last year to SlOo5 DO OOc United
states gold The have not been able to ascer-
tain the amount Of commerce among the Latin Amer
tran States The exchange Of commodities between
the United countries 70 the south during 'he
year ending June 80 1883, aggregated S2o-9O-4oo Oh
which the imports the United States amounted 70
s,s1 o5s o66 Of me.handise SCI 23G79l OF specie
and bullion expIts from the United States 9So Isl
of merchandise and sSGOSi70 Of specie and Duioh' VI
the slSl 900 OF merchandise brought into the markets
Of the United States the greater part was PAID Tor by
remttances London the Continent to cover drafts
drawn in the exporting against European letters
Of credit.
GREAT PROFITS LEAPED BY EUROPEAN BANhS'
For the use Of these credits Europe commission
OF threeQuarers per cent IS custoMaIy piu anu
rap this great ptOnt al H.hini" VI
risk inasmueh as he draft, drawn against these circuits
are secured not ly by the goods represented by the
shipping doclmcrts against which the bills OF exchange
are drawn but also by the responsibility OF inc party
generally tie cnssnee for whose account the letters OF
credit are sue and without any outlay OF cash as the
American uernant places the cash with the European
banker, to net such drafts at Or before maturity.
This system results the loss to America Of interest
and diGerence exchange well Of commissions.
all ~ which could be saved countries II inter-
national American banking were so developed and sys-
tenatzed as afford market for drafts drawn against
letters Of credit issued in America such
a. now exists for drafts drawn against
1utonoan letters Of credit. at present therefore. the
situation IS such that the merchants q this continent
are viItual- dependent European bankers 50 lar
as financial facilities are concerned notwithstanding ths
fact that there ample capital and responsibility ID thc
counties represented and it Is the opinion OF com,
petent persons capital would be ready 10 avail
Itself Of opportunity OF transactng TINS business u-
,cctlv between financial centres Of our respective
countries without the Intervention Of London the law
were such a. permit the conduct Of the business OF
international baking under a. favorable provisions a.
now are enjoyed by the European bankers Inc prime
difference would that these transactions would be carried
Oh bv American instead Of European capital ana that
the profit would remain here instead q going abroad
This however. impossible OF realization at present
In view Of the that the banking houses OF the Jheu
stsias doing f,rtgn bushes. usually controlled by
london principal. and that it Is impossible without some
chaDec IN the casaon Of the United States 10 secure
sufficient aggregation Of capital in corporate FORM ana 80
Tree from the buGensome restraints the taxes no" In
pose upon moncyd corporations 70 permit competition
on equal terms With the European bankers.
PLANS FOL DIRECT BANKING BUSINESS
Many diIercn plans have been discussed concerning
the best means facilitating direct banking business De-
tween our countries. Your committee has considered ana
dismissed NUMBER Of propositions relative to the c'tao
lshnent Of banr by means Of which the National GOV
themselves should afford financial facilities lf
inteI-Amccan banking Such action in your committees
judgment within sphere OF gov
eminent Thclcis reason, however, why the HON"h-
mens icpicont4 conference should not seVe"S
charter banking corporations 70 carry Oh business inc
class which is generally done by the great b"hs
corporations London that i. not IA the issuing ol
circulating bank notes for the purchase ana are OF
bills o. exchange coin, bullion, advancing on cOmnouts
generally fer issuing bankers letters circuit
10 aid transaction OF their business
In the Untd States. where capital exists II Daitic-
ulaIy large Noume and would lend Itself mot readily
ll.u I'll faclI.