The Washington herald., 1914-11-21
A NEW WAY OF PAYING
FOREIGN DEBTS
Copyright, 1914, by c. N. Key,


One OF the big bugbears of this war
| has been the amount of money owed
by the people OF the United States to
the people OF Europe. When the war
| broke out and all shipping was inter-
| rupted. various experts figured this debt
at 500 10000 to 800. 900 900. Theoretically
1t had to be paid In gold. and a great
many men spent lot of time deplorlng
this grim necessity. which seemed likely
to bring about an exhaustion of Amer
ican credit by Withdrawing the basis of
that credit from circulation and deposit
The thing that actually happened was
something quite different. II the German
French and British fleets had been scat
tered all over the world in large units
and IL every ship that sailed from New
York or New Orleans for Europe had been
in any serious danger OF being captured
during the months OF October and No
vember. the thing that the experts feared
might have happened. for II is not likely
that the debtors of this side OF the ocean
would have been able to hold the cred
itors OF the other side at arms length
for long period by refusing to pay their
debts. Because the great German feet
retired behind the defenses at Wilhelms-
haven and Kiel. and because the scat
tered cruisers OF that nation found II
expedient tO-aHoid the main unes between
RiASllSd anu LuIopt, quite q OlIeEenl
thing came to pass. The main highway
Of commerce being almost wide open
between England and America. the Euro
pean creditors OF this country found their
debts paid in quite a different way.
In October merchants and commission
men in this country shipped to Europe
something like 100000 worth OF wheat
and a smaller amount Of corn. In ad-
dition, concerns that were able to furnish
arNHlra IT,
and a dozen other products needed by
armies in the field. found an immediate
market in Europe and shipped their goods
on rush orders through the open lanes
OF the Atlantic. Imports from Europe
on the other hand. fell of very great
ly. the decline in the imports from Ger
many alone being something over So
OO00OO
Thus in a single month the tables were
turned very quickly and our debt TO
Europe, which had looked so threatening
and enormous, began to dwindle very
rapidly. This process OF shrnkage in the
foreign debt is proceeding even more
rapidly at the time this is written and
seems likely to keep on proceeding for
quite long time to come. Some OF the
orders reported are tremendously big
orders. There are rumors, for instance,
of an order for ordnance which would
run into many millions of dollars A sim
liar condition exists with respect to pow
der and other high explosives. An aero
plane company, which in July was en-
ploying 40 hands. is now employing over
l,OOO and is working day and night. Its
shipments, II all its orders can be filed
in the next six months, will wipe out
more than 100000 Of our debt to Europe
More prosaic. but steadier than the
shipment Of actual war supplies OF
this sort, is the great trade in provis-
ions and staple articles of clothing.
Blankets and cotton duck are the prin- |
cipal textiles in which trade seems to |
be likely on a large scale, but there
also seem to be pending some big con-
tracts for uniforms as well as for uni
form cloth. and much has been heard |
Of gigantic orders for shirts and un-
derwear placed with houses in the Mid |
die West. In shoes something like |
3, 100000 pairs are reported to have |
been ordered. and the average price |
per pair is somewhere between So and |
81. Such an extraordinary episode
speaks for itself.
In provisions. the demand seems to |
be unlimited. One hears OF an order |
placed in Okla homa City for 100000 |
pounds of capned meats: and of other |
orders even larger reported in the trade |
as pending and sometimes even as |
placed without full price being given. |
1t would appear, in fact, from all the |
reports as though every pound of |
foodstuffs that can be placed upon the |
American markets for many months to |
come, would be taken at good prices by |
the foreign buyers.
The experts are now engaged in re-
vising their figures. Instead of dwell |
Ing upon the enormous balance due to /
Europe, they are spending more time
figuring how long 1t will take at the /
present rate OF export. as compared |
with the present rate OF import to
wipe out our debt to Europe altogether
and to place the shoe upon the other
foot. Some OF the more optimistic
count upon a complete collapse of
industry in Europe, and
observing from the news that the Ger
man artillery always makes a special
point OF destroying anything that looks
like a mill on French or Belgian soil.
Ind concluding that the same kind of
warfare will be fought, IL by chance
the scene of battle should be shifted
across the Rhine. are figuring further
ahead and trying to estimate how big
/ balance will be piled up In our favor
from this international trade IL the
war should last for a year. From their
on such premises some of
he most optimistic estimates for the
'uture are being constructed.
The fact Of the matter, OF course. is
hat in all probability our foreign debt
VII be wiped out. It must not be
forgotten. however, that when this
iebt is wiped out and Europe actually
yves US money. on the trade balance.