The sun., 1914-08-21
DIRECTTRADE
CREDITS WITH
S0UTHAMERICA
National City Bank Elm
mates Europe as Fiscal
Agent.
BRAZIL AND ARGENTINA
OPENED TO EXPORTS
Banks in Both Countries
Join in Mutual Exchange
of Facilities.

WI L UNliitiNCs
For tne nrst time IN the financial his
tory OF this country a direct exchange of
commercial credits was established yes
.erdsy between the United States and
South America The step. which was
taken by the National City Bank. 10
believed to mark the beginning of a great
Increase in trade between this country
and Latin America
The National City Bank effected an
cSchango Of credits with several banks
IN Argentina and Brazil and thus facili-
ties are offered TO importers and exporters
In this country and the South American
countries IN their commercial dealings
for the transfer OF money by cable.
The most important arrangement was
made between the National City Bank
and the Banco dc la Naclon. the National
Bank OF Argentina, in Buenos iAyrss.
Tho Argentine bank has agreed TO ex-
tend 81. 600. 900 OF credit to the National
City Bank and the institution here has
agreed to reciprocate. BY this arrange
n,ent II will be easy now for importers
hsre TO pay cash for the products they
wish 70 buy In Argentina. The same
facilities are afforded to importers in
Argentina. with the result that many
transa actions will Offset one another and
the rate Of exchange will become normal.
This exchange OF mutual credits, for
which Frank \. Vanderlip. president OF
the bank, has been working with the
aid OF w S. Kies. in charge OF the
banks South American trade department.
has the sanction OF the Government OF
Argentina. The cost OF the exchange Will
equal the cost of transporting gold and
the rate will be cheap because of the
interest which the Argentine Government
has In the arrangement.
In addition the National City Bank has
arranged for exchange OF credits and the
c,.h'ng OF cable drafts with the follow
Ing banks In Argentina: Banco Aleman
Transatlant!co. Banco Suisse Sud-Ameri-
cano and the Banco Espanol del Rio de la
Plata.
Brazil to Honor Cable Drafts.
In Brazil the National CITY Bank has
made arrangements with the Banco Ale-
man Trsnsatlantico and the brazilian
such drafts, however. will sell at the mar
krt rate and the rate Of exchange Is
likely to be higher. because the Govern
ment Of Brazil has taken no part In ar
ranging the facilities for exchange of
credit
Tho interesting part of this whole ar
rtngement Is that this Is the first time
there has been direct exchange OF credits
between the United States and those two
III M h.
basis OF exchange In South America.
Hitherto practically all exchange with
South America was bought and sold
through London and negotiations all were
On the basis Of the pound sterling
All this has been effected through the
efforts OF the National city Bank and In
dcates that New York is. for the present
az least, usurping the place formerly held
by London as the great exchange money
market Of the world. II means further
that with arrangements for the cashing
Of cable drafts perfected the commerce
between this country and the Latin Amer
ican countries can so on smoothly pro-
N!ded enough ships can be obtained to
transport all the goods
Helps TO Move CofRee Crop.
Tho National City Bank took still an
OF the commerce between the two coun-
tr.ss. II began yesterday TO aid exten-
svsly m financing the movement OF the
coffee crop OF Brazil, or AT least that part
OF II which will be needed IN this coun-
Gy. IN 1917 the United States bought
SIS. 900, 900 worth of coffee from Brazil.
The facilities for commerce set In
motion by the National City Bank now
make Il easy for importers to buy goods
IN Argentina and Brazil. carrying on their
banking accommodations through their
own banks Hitherto. Of course. the
greater part OF such financing has been
done through English and German banks
with branches in this city.
The next step. OF course. Is the point
Of extending credit TO exporters. Hith-
erto importers IN South America have
been accustomed 10 pay cash for goods
from the United States the moment the
goods were put in the ships here. They
got their loans from English and German
banks, and the time Of the loan usually
was ninety days after the landing OF the
goods az the South American destination.
which usually was extended for three
more months
May Change Balance of Trnde.
Il va. said yesterday that with the
hg movement OF coffee and crude rubber
from South Amerca to thiS port II was
likely that the balance OF trade would
be against us. This, II Is believed. will
- only temporary. for almost immcdi-
ately the South Americans will begin 10
huy from this country great quaint t!ea
of goods which hitherto they bought In
Europe. The balance shortly. therefore,
should he In our favor.
The facilities provided yesterday had
an immediate effect. Much business was
transacted by cable between this country
and Argentina and also with Brazil.
Money was transferred by cable and
sFders Also were sent in the same manner,
Dr. II, s. Naon. Argentine Minister &c
th's country, who came here from Wash
ington 10 act as financial correspondent
were being effected, was delighted yester'
day with the progress OF affairs. lie
seemed to think that everything would
De normal In q few DAYS and he could
return 10 his post in Washington.
The consular bureau in Washington
mas received cable messages from it'
esnnts In South America telling of th'
demand there for products, Among tn,
pAeces heard from yesterday are:
san Joso. Costa RicN--Corn. blaci
beans, rice
Guayaquil Ecuador. Supplies for al,
weeks OF lard. flour and rice. There ha!
peen prohibition OF an increase o.
local prices, Drafts on New York arr
oe'ns Issued by the Bank of Ecuado