Richmond daily palladium. [volume] (Richmond, Ind.) 1876-1904, 1901-06-12

Come In-hans Securities sold Back
to Is.
Important banking interests 10 New
York city admitted the other day that
the belief that has generally obtained
that the United States has at the pres
ent moment a great international credit
balance-that is, great mass OF debt
owed to the United States by Europe
is not well founded. says the New York
sun. As a matter of fact, the United
States is al this time in reality. through
the operations OF the foreign exchange
market. borrowing from Europe. al
though this debt represented by long
sterling viii be settled later in the sea
son as our grain and cotton crops
which are still 10 be harvested are
shipped abroad. one banker who was
interviewed said that there had for
long time been Il great deal of mjsin-
formation circulated regarding the ex-
istence 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 houses
here having dealings with Europe have
drawn very large amounts of 90 AND
90 day bills of exchange. and they are
still 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 10 be
drawn earlier than usual. about April
/, although usually they do not begin
to appear until along in May. If 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 Aston and |
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 q
great many more Americans of less
wealth who also live abroad and who
spend a very large sum in the aggre-
gate. For example, there are living in
the city of Dresden alone 10000 Ameri
cans. Besides all this there is the
which has been calculated AT
500 100000 yearly, which is spent by
American travellers IN Europe. In adj
dition there is the amount of the |
freights and insurance on our ship
A..
The net balance is very much smaller
than the amount which the Stats
ticians have been figuring ii at.
"A great many of our dividend and
yielding securities have
been selling on only about a 3 per cent
income basis. and this fact has in
luced foreign holders of such securi-
lies TO part with them. They have also
disposed OF many nondividend paying
American securities. such as Reading
md Erie shares, which have advanced
in price largely in the American mar
Set. If actual figures could be obtain
ed. IL would be found that net bal
lnce at the present moment does not
exist as a bankers balance-that is. an
actual cash balance. 1t might be worth
noting that if 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 interfered 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 |
Iric cable aud steam have brought the
of the world so close together
that their financial prosperity aud ad
versity are intertwiued. and poverty in
Europe could not help but react on us.
while il is true that European hold
,rs of our securities have been parting
With them, ii must not be forgotten
hat they have been buying them for
he last 40 years, and while a great
icaI of what they have bought has
since found its way back to this coun
ny Europe still undoubtedly holds a
great many of our securities as well
Is interests In various American in
-estments which yield an income to
heir holders. This is an additional
tenn that has helped to offset the so
allied international trade balance. II
Europe owed US money. il is certain we
.ould not have been exporting gold and
II the same time have been ORA wing
oug bills of exchange. The balances
ire custom house b;Alnces merely, not
lctual cash balances"