The Daily Ardmoreite. [volume] (Ardmore, Okla.) 1893-current, 1901-06-17
OUR FOREIGN BUSINESS
No Credit Trade Balance Abroad
In Our Favor.
A POPULAR ERROR CORRECTED.

I Fact borrowers From Europe and
VIII Meet LonnS when the Crops
Come In-Nany securities sold Back
I to u.
I important banking interests In New
York city admitted the other dag that
| the belief that has generally obtained
I that the United States has az the pres
ent moment a great international credit
balancc-that Is. n great mass % debt
owed 20 the United states by Europe
| is not well founded. says the New York
sun. As "A matter of fact. the United
States is az this time ia reality. through
/ the operations Of the foreign exchange
market. borrowing from Europe al
though this debt. represented by long
sterling. will De settled later .n thc sea-
sou as our grain aud cotton crops
which are still 90 be harvested are
shipped abroad. one banker who was
interviewed sail that there had for a
long time been great deal of misin-
formation circulated regarding the eX-
. lstcnce Of the big So called information
al trade balance in favor OF the United
States.
"Since about April l." said this bank
/ er. some Of the largest banking hoe s,s
here having dealings with Europe have
drawn very large amounts Of CD and
90 day bills Of exchange. and they are
stin drawing them. These bills are not
drawn against balances abroad. but
are In the nature Of loan bills. Such
bills are regularly drawn every sum-
mer. but this year they began TO be
drawn earlier than usual. about April
/, although usually they do not begin
10 appear until along in May. II any
balances existed abroad the bills
drawn would be demand bills Of ex-
change. not long bills.
In figuring the balance in favor Of
/ this country on the basis Of the net ex-
. ports Of merchandise over the net i'm
ports Of merchandise there has been
no taking into account Of the very
large amount OF money that rich Amer
leans residing abroad spend there the
money Of course being drawn from
this country. In this category are such
men as William Waldorf Astor ani
Bradley Martin and such women as
the Countess de Castellane and the
Duchess Of Marlborough. There Is a
great number Of such rich foreign
Americans living In London. Paris and
. Italy. and to them can be added
great many more Americans Of less
wealth who also live abroad aud who
spend a very large sum in the aggre-
gate. For example there are living In
. 81. all .f A
cans. Besides all this there is the
amount. which has been calculated at
/ SlOO,OOO.O 600 yearly. which Is spent by
| American travellers in Europe. In ad-
/ dition there Is the amount Of the
/ freights and insurance on our ship
ments abroad which we pay to Europe.
/ The net balance is very much smaller
| than the amount which the statls-
| ticians have been tiguring II at.
~ great many of our dividend and
| Interesting yielding securities have
been selling on only about a per cent
| income basis, and this fact has in
duced foreign holders OF such securl-
| ties 10 part with them. They have also
/ disposed of many nondiyidend paying
American securities, such as Reading
and Erie shares, which have advanced
( ia price largely In the American mar
ket II actual figures could be obtain.
ed. il would be found that a net bal
ance at the present moment does not
| exist as a bankers balance-that is, an
actual cash balance. Ii might be worth
noting that II the amount owed by Eu-
rope on the export balance OF merchan-
| disc had to be paid TO the United
! States In cash Europe would be drain
! ed Of cash, and the very market for
our goods would be nterfered with, as
| the people who are our best customers
could not buy. The whole matter OF
settlement is worked out through the
foreign exchange market. The cleo
trio cable and steam have brought the
countries Of the world so close together
that their financial prosperity aud ad.
versity are lntertwned. aud poverty In
Europe could not help but react on us.
while IL is true that European hold
ers of our securities have been parting
with them, II must not be forgotten
that they have been buying them for
the last 40 years. and while a great
deal OF what they have bought has
since found its way back to this coun-
try Europe stlll undoubtedly holds a
great many OF our securities as well
as interests In various American in-
vestments which yield an income TO
their holders. This is an additional
item that has helped 10 Offset the so
called International trade balance. II
Europe owed us money. Il is certain we
could not have been exporting gold aud
at the same time have been drawing
long bills OF exchange. The balances
are custom house balances merely. not
actual cash balances"