The Birmingham age-herald., 1915-03-02

feet trade relations. agreements and un- oerstandings involving financing between the nations of the American hemisphere. That. of course. means that the United States would be the chief party upon one side to an agreement of this Lind and the other nations would make up the other party, since there is no nation of the American hemisphere except the United States in a position to take the leadership IF the exchange market
 That there are to be extraordinary com plications occasioned by neutral nations as well, is now thoroughly understood by those who are deemed good authorities in financial matters. They say that there are two sides to our export situation. One offers glowing picture. The recent re- ports from Washington show how enor-
 nous the balance expressed in dollars of our recent trade with beligerent and some neutral nations has become. We are building up so great a balan that ulti-
 mately it may be found large enough cas- fly to absorb such American securities
 as are now held for investment in Eng
 land and upon the continent of Europe
 Then, again, the magnitude of these
 purchases has unquestionably tended
 to relieve to some extent the depress-
 ing industrial situation. There is no
 lack of employment for those who are
 skilled artisans in the manufacture of
 war material and there Is to be no lack
 of employment after spring opens in
 our agricultural fields.
 On the other hand, this feverish, ab
 normal and very sudden increase In our
 foreign trade will inevitably entail cer-
 tain complications in the money mar
 ket. A day or two ago there was evi-
 dence of this in a very low record for foreign exchange drawn by Americans
 who have sold and shipped commodities
 n n a md n at almost precisely the noon hour of one day two very large institutions, one a trust company and one firm of international bankers, began buy ing, exchange. They bought enough ta cause favorable reaction in pr 'ce Presumably they were not buying hap hazard. In fact, the presumption is strong that there had been upon the other side of the ocean considerable selling of American securities, sales which were reflected in the purchase by these institutions of foreign ex- change in such amount as to increase the price.
 If it were possible to negotiate for eign loans in this country made by the belligerent nations then there might be easier sailing for the financial author tiles, however great our exports may continue to be. one of the reasons why the item in the appropriation bill l of $5o,000 to pay the expenses of a con templated conference of financial rep resentatives of American nations has caused very favorable comment in the l financial district is it's intimatior that l the administration may now find if expedient to relax its antagonism to 1 the making by the United States of loans to belligerent nations
 The reason given for that attitude of | the administration last fall was that m 10 1 reason which was entirely new to | international law. But the administra- 1 ton has apparently learned that while American bankers will respect its l wishes respecting loans to belligerept nations they are nevertheless such masters of the strategy and diplomacy l of finance that they are able to Go in- l directly what they could not accom- l pIish directly in the form of q for I eign loan. For instance if at any timo l in the spring or summer Canada wants ] to place the whole or any part of a
 loan of $1oo,00o. 900 in the United States l this can be done without the trans
 action taking the form of an imperial
 loan. J. P. Morgan Go. last fall, in def
 erence to the wishes of the adminis- l tration, declined to make a loan to the l French government. but France is now able to secure considerable credit here. Great Britain, if need be, can obtain l here sufficient amount of credit with l which to finance her American pur- chases. The feeling, however. for sometime has been strong in the ilnan- l cial district that the administration which has good understanding of the l immediate importance and value of our 1 foreign trade, should now make 1t clear I that it will no longer look with dis l favor upon the making by bankers oi the United States of loans to belliger- sent governments. Loans of that kind must be made either directly or indi- rectly if we are to maintain our ex- port trade of course, an effectual blockade of Great Britain by Germany would inject a new factor. unfavo-able
 perhaps. into our foreign trade situa-
 tion.