Forest City press. (Forest City, Potter County, D.T. [S.D.]) 1883-19??, 1914-12-23
INTERNATIONAL DEBT PROBLEM
Can Only Be Settled BY Exchange of
Commodities.

Can Only Be Settled BY Exchange of
Commodities.
With reference to the VISIT of Sir George
Paish, the representative of the British
treasury to this country. Spencer Trask
& Co. have prepared an interesting review
Of the foreign exchange situation, in part
as follows:
The question may be asked, how did
we manage to pile up a debt to England
estimated as 5000. O0O.0 CO or $3.50. 100000? The
answer Is: Principally through imports.
through payment of freight and insurance.
by dividends and interest on American Sc
c%urities. by the large sums spent in the
aggregate by travellers. and also by the
r%epurchase of American securities.
cit Is hardly necessary to state that
these debts were accumulated during the
months preceding the war. In normal
times we pay off our debts by exporting
the products of our farms and factories.
Thus we had a balance in our favor. be-
tween imports N exports of Merchan-
disc in
1910 off,. 500, 4OO, 600 1913 of...... 69S. 500, 900
1911 Off,. 56l, 200, coo
This year the difference between inn
ports and exports of merchandise has
turned very much against us, our balance
of exports over imports having fallen from
%f9A,V " tIC IIlSU IlItic IItOllltlS VI III
to s57, 900. GO this year.
1.-The heaviest single item of export is
represented by our cotton. During the
last five years cotton exports have
brought us in about $3.50. 900 coo, on an aver
age. annually. This year. owing to tl.c
interference to trade by the war, they
have fallen off very heavily. Thus in
September, which is the first shipping
month of the new crop. exports totaled
only SIS, S06, l7o7. against S65. 744,0O7 for the
same period of 1913. These figures cover
our total exports to all countries. The
heaviest individual buyer is England, who
has taken during the last five years an
average of nearly $4,000 900 bales, or Is per
cent of our total production. In this Sep
TENDER we shipped her only $1,000, COO
worth. against $780, 100000 in September,
1919.
Ut will readily be seen from this how
seriously our balance of trade is suffer-
ing from this one item. AS a partial Off
set we have shipped a great deal more
wheat. but notwithstanding this. the bal
ances we are owing Great Britain are con-
siderable.
"There is not the slightest intention on
the part of our business men to %repudiate
their debts: at the same time the view is
taken in some quarters that as their diff
should be taken of their position. The
negotiations with Sir George Paish are
methods of increasing our exports to
Great Britain. The latest proposal is that
British spinner should take a consider
which would be mutually satisfactory.
Thus far. nothing definite has been con-
Guided, although, it is not at all beyond
along those lines may be arranged.
1T seems that when Sir George came
over here, aaa could not understand that
and some 5000, 900, 900 in our banks, we
stuck at settling our debts, which, as has
been . = nos tate before, are estimated at
IDENTITY not familiar with the fact that the
$1,000, 900. 900 in gold in the treasury is
not free gold, but simply remains there
issued in it's stead. AS a nation we do not
like to carry gold in our pockets; a small
piece Of paper. called q. gold certificate.
ana Sh1ch gives us a call on gold. is pre-
1.-The $500, 900, 900 gold, representing the
reserves Of our banks. could not be re-
built up the loans made by banks in the
proportion Of four to one; that is, for
lowed under the present act to loan $4.
Under the new federal reserve act. which
is now scheduled to go into effect the mid
reserves is required by the banks in CEN
trail reserve centers. To that extent we
shall be better off; but even then it would
within our borders. as we nave issued
some 1855. 900, 900 of emergency currency
since the wal began, and while there is
currency. still. gold as a basis for money
is generally recognized as the highest
Great Britain. on the other hand. has
peen able to increase her gold holdings
since the war began by over $3.50, 900, 900.
This she has been able to accumulate in
prnQf r1n0 MIRO fhr0,pr1, tho cH;~-,z.k--
made her in the days just prior to the
outbreak of hostilities; by shipments of
gold to the branch Of the Bank Of Eng
South Africa and Australia, for the time
being left with depositaries in those coun-
tries. Owing also to this increase in her
quarters that it would be only aImatter Of
fairness for our English creditors to hold
off until. we can settle through shipments
tofOre contracted.
There is every indication that a salts
factory solution of 1.-The problem viii
tative is showing every desire to view the
situation from our standpoint and to
help an equitable adjustment; In this
ment acts in a. position Of considerable
authority, as it is due in good part to its
" action IN declaring q moratorium
trade with Great Britain has arisen.
until recently In much the same position
herself obliged to settle for purchases of
merchandise. coupons. etc. She. how
ever. was able to liquidate her debt to
Great Britain through an issue OF short
Of settling our debt with Great Britain
has been suggested. but so far It has
been considered impractical.
'For q definite reason, England dnds II
easier to meet the many financial prob
lens arising out Of the war than we.
hANoNa00 0h0 In vorI&~Y ~yHfHn 1rro =
borrowing nation. Moreover, she has q
banking system which is under the con-
troll Of one central institution-the Bank
Of E~ngland-..while h acts under which