The Twin Falls times. [volume] (Twin Falls, Idaho) 1905-1916, 1915-03-09

of decisive victory for one side or
the other in Europe, great victory
has finally been won in American
victory which throws back the forces
menacing our industrial and financial |
well-being." In other words, our fin
ancial system has so successfully |
weathered the storm that 1--WE have
| become for the time at least, a creditor
instead of debtor nation" 1.-THE
| financial center of the world, remotely
! following the westward course of en-
pire, has been given tremendous
push in this direction within few
months" says the New York World,
land it remains for Americans, through
Iliberalized policies of trade and finance
to see that this financial center stays
where the great war has planted it,"
Six months ago we were heavily in
debt abroad; today the whole world
is becoming our debtor. This change
from the role of debtor to that of
creditor is the result of an abnormal
demand for our commodities on the
part of Europes warning nations. So
great is this demand, that, to quote
the official statement of our depart
ment of commerce, "in the six months
since August last the monthly trade
balance has shifted from an excess of
$19,400,O00 on the import side to an
excess of 100000 on the export
side, exceeding that shown by any
previous month in the country's his
tory" This, remarks the New York
Evening Mail, SIS the index of the new
prosperity offered to this nation by
events beyond it's own control" The
same paper goes on to say that the
foreign demand for our goods is in
creasing at rate which should so
stimulate our industries as to enable
the nation to throw off quickly the
burden of unemployment under which
it is bent.
In the same six months during which
the main currents of our foreign trade
were reversed, foreign exchange swung
from the highest to the lowest levels
ever recorded. Thus last August, as
the New York Commercial reminds us,
1T cost seven dollars to remit pound
sterling from New York to London"
although the normal value of a pound
is $4S6 5-S. A few weeks ago the eX-
change value of the pound sterling
touched the low record of $479 The
same condition, differing only in de-
gree, is reflected in exchange rates in
, Germany, France and Italy. As the
Boston News Bureau remarks. "the
? problem that was ours in August is
Europe's in February" the. main diff
; ference being that "our predicament
then, though acute, was bound to he
brief. while Europe's is predetermined
. Iy indefinite" Something Of what the
, present exchange situation means to
the United States may be gathered
from the following paragraph in the
New York Commercial:
with exchange rates at point that
should drive gold into New York, we
5 will be able to collect interest from
2 tho rest of the world on our own
. terms, just as London has been doing
l for a century, Great Britain, France
{ and other countries must pay US for
e our forbearance in not demanding our
a golden pound of flesh if they can not
a ship gold Their only other loophole
{ is to sell hack to us the American Sc
+ curities they hold in sufficient volume
e to counterbalance the fast-growing
, sales are being made every day, but
. not in sufficient volume to steady the
1 foreign exchange market"
f International finance is a complicat-
e ed affair, says the Commercial, but
t nevertheless depends on simple prin-
t ciples.' In illustration, it continues:
G When Il wealthy London merchant
k buys large quantities of merchandise
Y in New York and sells little in return
e he owes money in New York on which
= he must pay interest until he settles
= the Dill. IL ne owns American Secuff
G ties he can sell them here to pay his
S debts. If he prefers to remain in debt
G and hold the American stocks ant
d bonds, he must think highly of them
= but he will sell them if their price rises
e to a figure that satisfies him. That in
G dividual London merchant is Great
J. Britain and the rest of Europe rolled
r into one, for what applies to one mar
l. is true of an empire or continent
n In normal times the world settles indi
e vidual balances just as two merchant!
o trading with each other settle their ac
l. counts. The one that has sold thu
l. other less than he has bought pay
e the difference in cash.
A Al ,a,,y 10 re