New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1914-09-16
TO PUT S. A. TRADE
ON DOLLAR BASIS
Pounds Sterling To Be
Abolished as Far as
Possible in Exchange.
PLAN ADOPTED TO
BOOM COMMERCE
PAYMENTS Made Through Lon
don Handicap to American
Manufacturer.

Efforts are now being made to pro-
vide for exchange in dollars and cents
with South America and thus remove
QUO Of tho hsndicaps tho American
manufacturer cndeavoring 10 extend his
trade there has had to bear.
Under the present system payments
arc made in pounds and slllillngS
through London, and 1t ~ cstiihalcd
that tho American manufactures 10
perali1eI from ~ TO 9 per cent each
way OH account Of the expenses lhcl-
dent thereto.
In discussing the possibility Of pro-
viding direct exchange John f.. HardlI
vice president Of the National Clty
Bank, said yesterday: 80
There are two factors which Will
enter into the establishment OF sys-
tenn of direct exchange IN dollars DC
tween the United States and South
America, namely, the establishment OF
branches Of national banks such AS are
permitted by the Federal Reserve act,
also the increase OF trade with south
America. These two factors VIII tehd
to bring about the removal OF the hah-
dicap which the merchant OF the Unlted
States has lobored under IN his en-
dcavor to secure trade With south
America II has been estimated That
this handicap amounts TO lls " per
cent each way Gu account of the cy-
pcusc incident to making payment
through London.
London Works Handicap.
"That handicap has worked out spe-
citlcally in this way: There has been so
little direct exchange OH New York IN
the South American countries that
there has been practically no organized
market. That is TO say, there has not
been enough Of a supply to establish
anything like fairly uniform price.
The result has been that merchant
desiring 10 make settlement for goods
bought from the United States would
find, OF going to his banker, that the
latter would be unable TO accommo-
date him. After considerable shopping
around the merchant would perhaps
find Ii banker with "A sufficient balance
in New York 10 meet his requirements.
direct exchange on New York and
quotations in dollars will tend [, re-
muyo those specific haudicaps on our
trade. Our merchants eau then figure
that quotations in dollars will be read
| ily translated into the currency of the
particular South American country with
which they purpose doing business, and
! therefore direct stim illus will be
given 70 their business with South
America.
I'VE must, % course, always bear IN
mind the service that has been per-
formed by London in furnishing a
I means whereby payments due anywhere
/ from anywhere might be made. The tax
I on commerce inherent in the commits
/ sion paid to London for this service has
| been d perfectly proper charge. Tho
! United States should not 90 into this
| business of providing direct dollar OK
chungc with any idea Of rivslling Lon
don, but rather with the idea of sup
plcmcnting the service performed BY
! London by giving the merchants of the
! United States All opportunity TO broaden
! their trade relations With their sister
/ continent. The sterling exchange will
I undoubtedly continue for a great many
: years TO hold its prestige in the world
; trade. In our own trade VIC shall un-
/ doubtedly be obliged TO continue TO use
/ sterling exchange, az triangular trans
actions will undoubtedly prove desir-
/ able and profitable at times"