Evening star. [volume] (Washington, D.C.) 1854-1972, 1914-09-06

world countries. Now these nations have
nothing more to give They are rather
seeking to get together all which they
have In order to feed 1t to the Unsuitable
flames Of their own kindling. Therefore.
the United States must find a surplus of
capital for investment in these countries
that improvements may continue despite
Europe's troubles, that factories and
railroads may continue to be built, that
South Americas progress may not be
halted, and, finally. that we may sell In
creasing quantities to her Of our ma
chinery, steel, iron and other manu-
facturies.
Again. there is another general phase ito
these export credits. Our South Ameri-
can customers, in order to buy from US
and pay us, must be able to dispose of
their own rich produce. These lands have
been regularly selling hundreds of mil
lions OF dollars worth Of their wares
each year to the countries of Europe. 1t
markets have already been greatly weak
ened by the general war. if not almost
destroyed. With such a wealth-burning,
titanic struggle on her hands. Europe will
want to purchase only the vital necessi-
ties of life. and she will not estimate
necessities by the high living Of peace
full times.
Moreover as the war goes on, this ques-
ton will become more and more peril
nent: 'Is Europe
Europe's Solvency solvent?" If the
to Be Considered. t na, 81 S'0 sven , one
year. would European debts continue to
be good debts? Naturally, this does not
mean to imply that any nation Of Europe
will fail to meet her obligations, even II
the war should run a five-year course.
But it does mean that the debt con-
tracted abroad today may turn out to be
impossible of collection on tomorrow. or.
for that matter, on many tomorrows
South America and We, however, will
need ready payments-that Is, compare
lively ready payments-to keep our bust
ness on a stubborn forward march.
The United States, then, must replace
the lost European markets for South
America, even as the Latin Americans
must replace our lost markets in Europe
The payment of our customers for our
manufactures depends upon the purchas-
ing power of their country's population.
and that in turn hinges upon the yield of
harvests, mines and forests, and the
prices realized abroad for these yields
For example. the purchasing power Of
Guatemala, Venezuela and Brazil bears
very real relation to their ability to
dispose of their coffee crops at proper
prices. So 1t is up to this country either
to take these crops for home consumption
or to facilitate their distribution among
other peoples.
The needs of the great war will proba-
bly, call for right-about-face in view
point on the export credit question from
many of the American manufacturers.
There has been considerable hesitancy in
this country to export upon credit ba-
sis. The American manufacturer has
sought foreign business upon the basis
of ''cash against documents in New
York" The above ANALYSIS of the situa-
ton seems to show conclusively that even
the greater part of that cash business
which was possible before the war must
now give way to credit.
Furthermore in normal times the Lat
in American importer has preferred to do
his business upon credit basis. and. in
the case of solvent firms and individuals,
there is no reason why he should not do
1t SO. The Argentine ambassador to this
country has stated that payments in
from ninety to one hundred and twenty
days are regarded as cash payments.
Drafts in normal times for export goods
to South American countries have been
allowed to run three, four, six, nine and
twelve months, most commonly three and
six months. Under the strain of the
European war it is likely that still longer
credits will be necessary.
The European exporter has built up Il
great deal of his South American bust
ness by al
Liberal Credit lowing his
Built Up Business. oven e, credit
IT,,