The Plymouth tribune., 1902-05-08
Americas Financial Supremacy.

New York as the worlds financial
center is the subject of an article in
the current number Of Worlds Work
Many years ago England notified
the nations of the world that pound
sterling, no matter where received,
would be worth SO many grams in
London, and thus London became the
banker of the world. Being banker,
it wa easy to spread trade. And
thus she became the creditor of the
world. Realizing that her position as
creditor would not be secure unless
she developed the sources of the
world, she invested her surplus capital
in foreign countries and became the
worlds great lending nation. Now
we are on the same path, and New
York is overtaking London.
Throughout nearly the whole of the
nineteenth century until 1890 Eng
land was so fortified by exchange re-
mittance that she led the world. But
now English manufactures are having
trouble with the tyranny of the trades
unions. False economics and stub
born conservatism hamper the use of
labor-saving devices. Exchange on
London is made to carry all that the
traffic will bear, and the merchants of
all nations are crying for relief.
Meanwhile, England's commerce
has stood comparatively still. In
1900 she bought $500, 900. 600 more
than IN 1890, while she sold but $780,
600, 600 more. The United States. on
the contrary, bought only $50. 900. 900
while she sold an excess of 1925, ,000,-
900. The overwhelming balance of
our trade has been neutralized by the
fact that we are debtor nation. In
1890 Great Britain bought from the
world 81, 900. .OOo,0OO more than she
sold, and although it is estimated that
her investments in foreign countries
are so. 900, 600, 900 it IS not possible
that the dividends on these added to
the revenues of her carrying trade and
commissions will yield 81, 900, 900, 600.
Hence the conclusion is irresistible
that she Is paving out her principal.
On the other hand for five years we
have annually sold $500, 600, 900 more
than we have bought. 1t is estimated
that IN 1898 we had 50, 900, 900, 900 of
foreign money invested IN this coun-
try. The dividends on this could not
begin TO amount to $500, 900. 900
annually. Hence we have unquestion-
ably been liquidating our obligations
abroad. 1t will not take an annual
outgo of $500, 900, 900 many years to
equal $4,000, ,OOO,O 600 with interest
added and the world will soon owe
money to New York as it has hereto
fore owed it to London. The nations
will settle their balances through New
York banks.
The deposits in the clearing house
banks last year in New York 81, ,OOO,-
600. 900 IN non-clearing house banks
about 1000. 900. In 1890 they
were s4OO, 900, 900. The savings
banks of the city had 81, ,131. 900, 900
which was more than double the
amount in 1890. The trust companies
had 1869. 900. 900 which was three
times the amount they had ten years
ago. Granting Implications. it is
estimated that there is $4,000, ,O0O,-
900 available for inveStment-th
greatest amount of money accumu-
lated in so short a time i'm the history
of the world. In 1890 both London
and New York cleared about S37 .0OO,-
600, 900. In 1901 London exchanges
amounted to $40, 900, ,O0O,O but
New York IS to s79, 900, 900, 900 The
building of the isthmian canal will
make New York geographically the
most important financial point in the
world. The probable future of trade
with the far east and our advantages
by location with reference to it will
be an additional help. Meanwhile
and statesmen are tending
toward an accommodation to our bank
ing methods to be equal to our oppor-
tunity.