The Washington herald., 1914-12-28
War Effects on American Industry.
ARTICLE I.

six Herald Editorial Readers" asking several
pertinent questions regarding the state of our ma
tional commerce and industry. We propose to
answer this letter in some detail. For the sake
of clearness will divide the letter into sections,
so that each section with the accompanying answer
will appear by itself; and inasmuch as too much
space would be taken up by discussion of the
matter in single article shall devote two
articles to the subject The first part of the letter
follows:
Your recent editorials relative to the effects of
the tariff and war on the finances and trade bal
ances OF this country have been very clear and to
the point, and right now, when the foreign coun-
tries are raising loans, and our stock exchanges
are opening up, there are financial problems which
many of ordinary individuals of the younger
manhood and womanhood are not able to under
stand very we'll If you can see your way clear to
cover the few points mentioned herein by an edi-
toral it will be very much appreciated by many
of us.
1. What is your opinion as to whether it is
false and dangerous for this country to depend
very much trade revival and prosperity return
ing account of the enormous manufacturing
and exporting OF hundreds of millions worth of
materials and munitions of all sorts for use in the
war: These are not normal articles OF manutac-
ture and export, and if there should be a rather
sudden halt in the war, where would these con-
tractors and manufacturers be? Do you consider
IT a sound idea that this country can build up a
lasting benefit by manufacturing and exporting
articles for such ephemeral use as war OF the
feroclty as this one?
Our correspondents answer their own question
in characterzing materials and munitions for use
in being almost abnormal articles of manu-
facture and export in the United States. The manu-
facturcrs of our country ordinarily turn out guns
and other military, scmi-military sporting goods
for the use Of our government and OF our own
people alone. We do have something OF foreign
trade in these articles but it is not considerable
in normal times The DrcSent circumstances
exceptional and every one realizes the fact There
is no one who cherishes the hope of trade revival
and return of prosperity because of the big trade
that has suddenly developed here in munitions of
This has been overnight growth and may
disappear suddenly it II the war
should end tomorrow, the trade would end likewise.
So far it has lasted, however. to the extent
that it may continue, it has been and will be of
decided help to country in business way, be-
it has in degree filled the void in our
export trade made by the substantial cessation of
European purchases OF other articles. 1t is the
desire OF all of US that when foreign commerce
incident to the subsidies, its place will be taken
by the springing up again OF commerce of the
regular and accustomed sort Up TO the present
time our manufacturers of war materials have
spent considerable, but not great amount of
money in charging their plants and in otherwise
trade.
Here is the second question asked by our cor
respondents:
?. With what form OF money, currency. etc,
these hundreds OF millions worth OF materials
generally paid for and is there much of this to be
done credit basis?
Our manufacturers receive payment for by far
the greater part of these materials in cash. That
is, they receive checks drawn upon American
,,-Ls -.
figuring in the transactions have established credits
broke out these foreign countries, or many of
them, had established credit with our banking
houses by of deposits OF cash. such deposits
being in turn, the proceeds OF sales in our own
market of securities held in these coun-
tries. All this in preparation for the war. 1t
is probable that selling OF this larger in
the of certain countries, particularly Germany
than it in the of others. 1t is of course
possible that of our manufacturers have been
willing take the promises to pay of their foreign
customers for these goods; but in the main we
think that cash has been insisted upon, and that
such credit negotiation has taken place has been
with the banks rather than with the sellers OF the
commodities.
Further this establishment OF foreign credit |
with banks has been of two kinds One, an
acceptance by these banks of newly issued foreign
government securities collateral security for !
loan, and the other book credit of ninety days !
or six months granted by certain banks to foreign
governments that have maintained handsome cash
balances with such banks and that are thus en-
titled to credit like any other deposit customer 1t
is practically certain that NO American bank or
banking house has made any such loans except
upon the understanding that the money represented
in the transaction is to be spent almost entirely
ir the United States.