The Birmingham age-herald., 1915-02-27
EXPORT TRADE ADDS NEW PROBLEMS IN HANDLING EXCHANGE Balance in Our Favor to be Probably Billion Dollars
 by August 1 DOES NOT SHOW IN THE CLEARING HOUSE pne Neutral Nation Is Now Negotia- ting for Large Loan Which Will
 Probably be Floated in
 New York
By HOLLAND

mates recently made of the money value
 # our exports for March in excess of
 UT imports are in substantial agreement
 hat 1t will amount to about S150, ,00O, coo.
 There is, of course, a contingency that
 he attempted blockade of Great Britain
 )y the German submarine may consider lbly reduce this amount. although the
 common impression is that this blockade
 will not seriously interfere a.'th Ameri-
 an commerce. Should this estimate prove correct, and also the one which it
 S possible to make because based upon
 Authoritative figures for February, then
 he money value of our excess of exports
 since the war began up to the first of
 April will be approximately s7Oo o0O,oOo
 There are not to be many or at least
 very heavy inroads into this balance in
 he way of invisible tran ctions. cer-
 ainly not through the sale of letters of
 'redit to Americans. Of course, Great Britain receives much the larger part bf the freight charges for ocean com Fnerce, but in any event the figure is so
 large that it is now reasonable to look
 Or a trade balance in favor of the
 United States for the P months since August of not less than $1, ,000, ,000,000.
 Gratifying as this enormor- excess of
 foreign trade is. it nevertheless creates,
 he men of finance say, some problems (Which are difficult and may be by and by luite as difficult to solve as were those I1vith which we were suddenly confronted In August of last year
 The question is sometimes asked where ! Is ttere any record of pavy,erts r,,ado to
 he United States on account of excess txports. The clearing house transactions Do not seem to reflect to any considerable |fxtent these movements. It is something Eof a mystery and yet it may oe partially Explained perhaps by a transaction which V'ecently took place in this city. check For si9000,000 was recently given to the K 'Pepnsylvania Railroad company on ac- |{count of the sale of securities of that 'Eeompany. Had this check pas. ed through |the clearing house it woul' have so |Breatly added to the clearing house trans actions of the day as to attract general |Rttention But the clearing house au- horities did not handle this check for
 1t was deposited immediately with the banx which drew it and therefore passed Eat once to the crelit of the pennsylvania
 aiiroad.
 F The chances are that good many of the payments which have been made to fAmerican exporters have been direct tover-the-counter transactions. In other words, these checks have been deposited with the institutions which drew them. VI Should it be discovered that Great Bri- Stain has established a credit in the Nnted States, which is to he. as some Nay, as much as $100,000,OO0, very likely Nppany of the drafts against this credit Nsill be immediately deposited with those NNho are the trustees for Great Britain bf the credit Therefore. the transaction Would not appear in the clearing house ktatement. The presumption is strong flsat a good many payments have been made in this way It is impossible to Estimate how much is now owed to the United States on current account. The tlnprecedentedly low quotations for for Xeign exchange tend to the belief that a large amount remains unpaid. If. there More, by the first of August, or at the lend of the present fiscal year. June 30, kt should be found that the trade balance kn favor of the United States estimated lin dollars, is not far from $1.000, 000 000 a kery serious question may arise respect Nng the liquidation of this indebtedness. ITO considerable extent it would be a matter of banking. more or less of bar ter and in some degrees of bookkeeping. Limitations have reached New York that kn case it should be necessary Great Britain might impose such {. tax upon foreign securities held for investment by British capital as would compel the sale bf these securities. There is good au- khorty for the belief that the United States can pay in commodities as much las billion dollars for Amer an securi- kies of a like amount sold in Great Britain and upon the continent of Europe.
 The Demand for Capital
 Some of the leading bankers are in- selined to think that while this unpar- talleleU situation continues there will be very little capital for investment in our domestic undertakings. Yet real re- k1val of domestic business is to some ex- Bent dependent upon the securing of fresh Fapital. The United States, however. how realizes Chat much of the financing pn account of the foreign war and no ton and raw materials which are needed Uboth by belligerent and neutral nations Across the sea must be furnished by the Limited States. It is really imperative Ibankers say, that this first of all be vdone Later. when more normal condi- uttOnstionS are restored, there should be Abundance of capital for investment in Amerioan development and resources. Seeking Our Aid
 Not one-half of the applications or ad- Nvanccs which have been made. and are {inow under way to American bankers for Financial assistance to other nations has Xcome to the knowledge of the American Upublc. This is partly due to the fact that Isome of these propositions have not ap- peaied from the business point of view to the bankers. For instance, France would have been glad to obtain a large sum Xof money in New York, but the under steuding Is that her proposition was re- tected because France wanted the money shipped from the United States to Par-s. XOur bankers are willing to aid. but they are moi willing to yield any more gold than they found 1t expedient or imperative to export in the early days of the war. Ion the other hand, no doubt Great Brit ain will be able to negotiate credit here because she will treat that credit precise ly as Japan did when she was at war with
 Russia. Japan f1oated large loans in the United States and then permitted ale
 Aost all of the money to remain here, SO
 tSg g& it could be used in paying for the
 .4.modities Japan bought in the United Stf.tes
 Today one of the neutral nations of the world Is negotiating for loan of consid- erabi amount in New York. and probably kyill be ableyto secure 1t becauso the credit Pt the nation Is good, her resources are Excellent and she ia willing to agree to
 he terms imposed by the American bank frs.
 Ther. is a possibility that the very mag -..m =