Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1914-10-19
LATIN-AMERICAN
TRADE IN DANGER
If the Restriction of Commercial
Credits Is Not Remedied, Re-
ports the Latin-American
Trade C O m m t t e Blanks
Must Give Aid

of the United States will be injured Sc
riously by loss Of Latin-American
trade If the restriction of commercial
credits is not remedied, in the opin-
ion of the Latin American Trade Com
mittee whose report was issued here
today. The committee expressed the
hope that banks VIII extend accommo-
dalton sufficient at least to assure
maintenance of existing trade. Secre-
tary w. C. Redfeld of the Depart
ment Of Commerce appointed the COM
mittee, which is headed by James A.
Farrell. chairman of the National For
eign Trade Council.
Even before the war the committee
found that exports of the United States
had fallen off on account of the finan-
ciaI stringency in South America. OF
present conditions the report says:
Since August l of this year the
countries in South America whose
currency is not already on gold basis
have experienced q serious deprecia-
ton Of their paper money.
THE export of copper. tin. nitrates,
coffee and other products has been
curtailed because of loss of the nor
NAL European markets. AS indicative
of financial conditions, bank holidays
and moratoria were declared at the
out break of hostilities, which were ex-
tended in certain countries from sixty
to ninety days. The effect has been
damaging to American exporters as,
under such circumstances drafts cue
in August will not be liquidated until
November or December. This means
large accumulation of draft indebt-
edness never contemplated by the ship
per. Specie payments were suspended.
Collections throughout South Amer
lea, therefore, are difficult. Orders are
falling off. and there seems less pros
pect for new business after this year
unless steps are taken to relieve the
situation"
From the standpoint of the mutual
interest of the Latin American repub-
lies and ourselves" the report analyses
the present problems as follows:
Because of the war Latin American
countries are confronted by the ne
cessity of marketing their products.
despite the shrinkage of world pur-
chasing power and of obtaining funds
to move crops and to continue indis-
u
development normally financed by
Europe.
THE solution Of these problems de-
Ponds upon production. and upon
financing of production, transporta-
ton and settlements.
Production in the United States can
be maintained If there be sufficient
market at home and abroad for Amer
lean goods. Production in South Am
erica may continue but cannot be
further developed unless financial as
/ sistance be obtained.
Before trade can resume it's nor
NAL course. the exchange problem
must be solved, either by restoration
of old, or by establishment of new
credit facilities.
The question Of creating a market
for Latin american securities in the
United States is highly important.
The development of our trade with
those countries is largely dependent
on it's satisfactory solution. Unless
the restriction of commercial credits
be remedied, however. We will not be
able to extend our trade, but We will
lose a considerable portion Of that
which We already have"
The committee praises the efforts of
the government and particularly Sec
rotary of Commerce Redfield for eff
forts to develop foreign trade and
makes the following recommendations;
The extension of credits might be
facilitated and some relief afforded.
pending the establishment Of the Fed
eral Reserve Banks, If. in addition to
.lrc oh,
signified their intention to enter the
Reserve Associations, to accept COM
mercial paper, action be taken by the
Federal Reserve Board to make i'm
mediately effective the rediscount pro-
vision Of the new banking system, thus
assuring early establishment of dis
count market.
Your committee, while appreclating
the necessity of conserving the bank
ing resources of this country for the
protection of our domestic situation,
nevertheless believes that the cessation
or curtailment of our trade with Lat
in-America will in itself be highly in
furious to American industry, just as
We believe that the extension of this
trade would make for the prosperity of
the country at large, as we'll as for
those directly interested. We therefore
hope that American banking institu-
lions may be induced to meet the pres
ent emergency, not by tentative and
inadequate measures. but by extending
accommodation sufficient at least to
assure the maintenance of our already
established trade.
Your committee feels that mer-
chants and manufacturers now con-
templating an entry into the Latin
American field should be careful to
avail themselves of the easily accessi-
BILE information concerning these mar
kets. The cost of maintaining individ-
uaL Representatives would probably be
too great for any one of them to bear.
1t is therefore suggested that associa-
lions consisting of the smaller firms or
corporations engaged in kindred lines
of production might be formed, and
that either one or more representatives
should be sent to South America to
look after the interests of such associ-
atoms. thereby bringing the cost of
representation within a reasonable