The Washington herald., 1914-12-29
War Effects on American Industry.
ARTICLE II.

Here follows the concluding poruoh oi oui
answer to joint letter of several correspondents
asking us for our opinion concerning certain
phases of our industrial situation. We repied 10
several of these questions yesterday, and now wisn
to reply to the others, which, on account OF lack
of space, we left unanswered in our previous ar
ticle.
a. 1t is our understanding that although there
has been great increase in exports OF tooos theIe
has been a big decrease in exports of the ordinary
and usual articles of manufacture. is TINS correet'
Do you consider such condition as really sign
of much promise to the United States 50 i~f ~S
is concerned!
Your understanding is correct. Our leading ar
tcle of export in point of money value is cotton.
Since the beginning of the war exported, up to
a few weeks ago. practically no cotton whatever.
There are distinct signs now of increasing cotton
exports; and the revival of this trade has been
partly due to increasing business confidence abroad
and partly to the fact that England and france
have announced that they will not treat cotton as
contraband of war Even so, cur total cotton *
ports remain far below normal The philosophical
way to look at this condition is that when the war
is over the cotton manufacturing business abroad
will once more flourish and then there Will be
demand at high prices for the large surplus stock
of American cotton that has accumulated Mean
while our shipments of foodstufs to Great Britain,
France, and the neutral countries of the world do
not begin to compensate us for the losses we sus-
tained by the suspension of cotton shipments
4 In reference to the enormous loans that are
being raised over there, in England and Germany
especially: We understand that many thousands
of people subscribed to make up these loans. How
do they do this; that is in what form OF money,
currency security, whatnot do those people
furnish those governments with: 1t certainly can,
not be gold Can the funds thus raised be used
in any way to pay for articles and materials Delng
contracted for SO heavily!
Subscribers to the war loans in countries
abroad make payment therefor in any kind OF
money that is legal tender in those countries, or
simply by a transfer of credits If Johann Schmidt
in Berlin has bank account OF 1000 marks and
he subscribes for 5000 marks OF the new govern
ment loan, he gives check to the government tor
the amount just as he would to anybody who sold
him house; or, perhaps, if he wants to buy I,ooc
marks of the new loan and has only 500 marks to
pay for it with, he goes to his bank and borrows
the balance from his bank, leaving the government
bond as collateral: 1t must be remembered that
all the banks are cooperating perfectly with the
government in these matters. For instance, The
Bank of England will make loans to its customer:
on the new British government bonds without re
quiring margin.
To answer the further inquiry, the proceeds o.
these government loans are being mostly used tc
paw for articles purchased in the home countrie:
themselves and to pay other war expenses.
: What is your understanding as to the gen
eral conditions of the ordinary and usual manu-
featuring and trade OF this country OUTSIDE OF tt
increase in munitions of war, and the increase II
food exports? Are manufacturers experiencing
hard times to amount to anything:
There is no doubt that general manufacturing
trade in this country is greatly depressed. Ou
manufacturers are experiencing hard times harde
than they have since 1896 when the wholesale
trade of the country came almost to a stop.
strong contributing cause OF the depression in th
former period the free silver agitation started
by Mr.. Bryan The best proof of the present con
dition is seen in the weekly statements of th'
country's bank cearances that is the amount o
money involved in the checks passing each weel
through the country's banks. The closing of on
stock exchanges accounted for part of this de
crease but even since the stock exchanges, or mos
of them, have resumed business the bank clear
ings still show heavy falling off. Another indi
cation is the number of unemployed people, ant
the reduction of wages that has been enforced
almost everywhere in our industrial world What
ever stimulus to our general business has beel
afforded by war orders from Europe has in yer!
small degree countcracted the falling off in busi
ness due to domestic reaction.
g. Does it appear that the exports of foods 81
heavily may ultimately have an increasing effect o
the price of foods for this country!
Up to the present time our increased export
of food have not had any effect to speak of upo
the price of food here. This is because our sur
plus supply of food this year was large. If it ha
been a year of short crops with us, the increase il
the European demand for foodstufs-which wa
due not only to the war, but to reduce harvests il
Europe-would have caused, undoubtedly con
siderable increase in the price of foodstuffs here