The Grangeville globe. [volume] (Grangeville, Idaho) 1907-1922, 1914-09-17
UNITED STATES FINANCIALLY
GTRnNG


Arrangements now being made by
the New York bankers to meet obliga-
tions of this country in Europe and
to reopen the exchange for the sale of
bonds are proof of the financia;
strength of the United States and of
this country's ability to bear the strain
put upon the finances of the world bv
the war. Since the credit of this coun-
try and of its business concerns Is I'M
impaired by war, 1t Is believed that the
payment of a first installment on these
obligations in gold and the readiness
Of the bankers to pay the balance in
that form will inspire such confidence
In Europe that no further demand for
gold will be made.
Had peace continued, gold would
have been coming to the United States
from Europe in payment for our crops
instead of going from this country to
Europe. The flow has been reversed
by the necessary realization on all obli-
cations of this country to Europe In
order to get gold. Against the crop
shipments Europe is likely to establish
a credit in this country by selling Amer
lean securities in this market, which is
the only one of Importance remaining
open. But our grain has been so en-
HANGED in price by the war that Europe
must pay us more for 1t than would
have been the case In peace times Our
credit to offset the price to be paid for
securities unloaded by Europe will thus
be increased The rush by Europe to
sell our securities at the outbreak of
war caused the closing OF the New
York Stock Exchange lest panic fol-
low the consequent fall in prices. Since
that time the prospect that. on resump-
tion of business. stocks and bonds will
be offered far below their value has
created a quiet demand for securities in
this country. This will become evident
on the reopening OF the exchange and
Will tend to stiffen prices somewhat
though probably not enough to prevent
many snaps from being picked up.
The natural result will be that, while
Europe pays a premium for our grain.
we shall buy back our securities at
discount on the prices at which they
were sold, thus reducing materially the
total amount of credit Europe win es-
tablish. Much American capital will
thus be absorbed in security purchases,
and the amount of liquid capital will be
reduced, but we shall probably cease to
be debtor nation and shall thereafter
draw In gold much larger proportion
of the payment for our excess OF ex-
ports over imports, against which in
terest and dividends American see-
curities held In Europe have hitherto
been an offset
The opening of Federal reserve banks
which Is now promised before October
1, holds out prospect that this coun-
try will be even better fortified than
now to stand whatever drain OF goli
results from the above operations.
There is a sound basis for. the New
York bankers belief that, when Eur
ope finds them willing to pay gold It
Will cease to demand gold. The credit
OF the United States and of American
business is not merely unimpaired but
Is strengthened by the war. Thus We
need only demonstrate our readinss to
pay gold in order to make our promis-
es to pay as good gold in Europe's
eyes. On the other hand the credit of
every important European nation is so
shaken by doubt as to the outcome OF
the war and as to it's ability to meet
the enormous cost of the war that its
promises to pay are at a discount and
only gold Is acceptable Thus our as
set currency win be accepted at its
face. while Europe's paper money ma,
nave 10 Stan0 n discount.
AS the upbuilding of the American
merchant marine under the new ship
ping law progresses. a larger proper
ton of the ocean freight money which
has hitherto been paid to foreigners
will be kept at home. At the same
time our exports will increase by rea-
son of Europe's preoccupation with war
the diversion of its ships to military
purposes. the necessity that South
America buy from us those commodit-
les which Europe has ceased to supply
and the work done by our ships In pro-
noting our commerce. This cause will
start a flow of gold from new quar-
ter to help make good whatever pay
ments we make to Europe.
Each group of warning nations be-
ing determined to fight until the other
Is decisively beaten. the prospect is
that the close of the war will find
nearly all Europe In state of finan-
cial and industrial prostration, while
II will find the United States with cred
1t improved, industry active. merchant
marine restored and commerce vastly ex-
banded Wise craftsmanship on the
part of our rulers and energetic but
sagacious pushing of trade on the part
of our business men at this crisis may
transfer the financial supremacy of the
world to the United States and may
make this country the source on which
Europe will draw for money to repair
the devastation of war.-Oregonian.
TuRkESTAN ALFALFA INFERIOR.
warning 10 alfalfa yrowars tn avoid