The Bridgeport evening farmer., 1914-08-07
BANK ING CREDIT IN
 LATIN AMERICA

eAb 4 n ' = - = - - . v . waahington. Aug. Although Amer tea11 trade is we'll established in Argen- 1 tina. Brazil Chile and Peru and is growing despite the lack Of direct banking facilities, steamship accom- nnodaaions, etc. American banks are inaperativeIy needed in South Amerie@ as dependable resource in the cam paign for greater trade. This is the conclusion of E. N. Hurley. president of the Illinois manufacturers associa-
 tion who has submitted to the Depart ment of Commerce report on bank ing and credit in South Aaneroica, i based upon a. careful investigation or that field MT Hurley was assigned I to this special task bys Secretary Red- field, who is making a strenuous sfforE l to increase the sale of American pro-
 ducts in South America and was in ] strumenta1 in securing an appropria- ton from Congress for thSs particular purpose.
 Foreign and native banking houses reasonably well accbmmodate the or
 dinary routine of American trade, MT,
 Hurley states, bht they naturally with hold the full measure of interest and soltcltous support accorded to enter prises of their own nationality. More over, many valuable collateral benefits arising from the financing of oversea trade are lost through American re- Iance upon London banking mediation, while the compulsory use of European materials in many South American enterprises financed in Europe is stead ] fly restricting the potential market for American goods. American sales men and trading houses also lack the support given by foreign banks to their national trade seeksrs
 MT. Hurleyis study Of the problem Of banking and credit in South Ameri- ca was made from the point Of view of the manufactuyer It Is not ia tech nical banking report; rather it deals American trade in Argentina Brazil Chile and Peru. it's disadvantages, and examples from the experience of other nations that have considered oversee banking operations essential to their conquest of foreign trade.
 Banks in South America fan nat1rz ally into two cIasses-foreign banks and native, or domestic banks. At certain points the business of the two loverlaps. but, generally speaking, the i'tafning to foreign commerce., steadily extending their network of branches and exerting their influence s*o the ad- vantage of European trade. TO this end European banks finance trade not only (preferentially1 between their own countries and South America but also Between the various Iatin-Anerfcan nations and between the United States and South America The functions of these foreign banks may be sum nnarIzed as exchange, collections. loans and discounts, credit information and Investment
 The United States pays London an- nually a large toll in the form Of bankers commissions. but more i'm portant is the fact that once an Amer ican obligation is converted into a bin on London and s1ipsrinto foreign fnan- cia1 channels it passes out of the hands of those who might be interested in obtaining return purchases by the selling country, and an obligation that ought to stimulate a demand for pro ducts of the United States Is transfer red to London and exerts an influence
 toward purchases from the United Kingdom.
 Whether or not banks are ideal col ! Iectors is 8 question on which much | difference Of opinion exists. but they l do offer the most effective 1neans+open
 today to the American exporter to
 South America, and foreign banks
 reap the profits of such business
 Loans and discounts, are at once
 source Of great profit and great risk l to banks in the largest South Ameri-
 can countries.
 Since the foreign and native banks l in south America are called upon to
 accept drafts representing ecredfts 1 they must maintain credit-in6orma-
 ton services, no less for their own protection than for the acconnoda- l ton of custom CTS. For many years these banks have supplied this need.
 but mercantile credit agencies have
 also been established in recent years
 Foreign banks supply their home of-
 fees with the ratings and characteriss l tics of South American firms and in- dividuals. German trade has been ex- I tended largely by the aid Of longer
 credits than are granted by other
 countries, and German banks have
 more minute in their organizations of
 this service. As South American co1in- l tries are being developed largely with
 funds from European countries, infor- mation as to the character and stand 1 ing of persons back of the various en- 1 terprfses Is the first need of those
 whom they approach abroad; hence
 foreign banks have become channels
 through which investments are made i in railways, light and power co1npa- nies etc Without the detailed infor-
 nation that the foreign banks possess
 or can obtain of these numerous pro-
 Jects. the development of South Amer ica would not proceed rapidly.
 Fcoreign investments in South Amer fca may sbe divided into loans to gov
 ernments and loans for industrial pur-
 poses. South American government
 bonds are largely held in Europe and
 the fiscal policy of these countries is
 materially affected by the attitude of European bank CTS. Government own