The Washington herald., 1915-01-31

the February bulletin issued by the
National City Bank of New York.
On the first of September when the
quiry as to the Indebtedness of the Uni
ted States to Europe maturing before
January l, 1915, 1t found the sum to be
probably somewhere from S3JoOOO,00O to
$500. coo 900. says this bulletin. The mer-
chandisc balance of trade had been run
, ming against us since April and our
principal dependence for export, cotton,
was without a market. Looking back
at the situation even from safe ground
there 's no wonder that alarm was felt.
Since then the situation has radically
changed. In the first place, the foreign
holders of our securities have shown no
eagerness to sell them. Various eXpla-
nations are suggested for this, but II
may be surmised that the most impor-
tant are that as yet there has been no
pressure upon them to do so and that
they do not. want to sell at prices that
result in loss. The war loans have been
Offered upon terms that have enabled
the public to take them without selling
other holdings Moreover, our listed Sc
curities that are held abroad are for
the most part of high class, the returns
upon them have been regular, many OF
them have been in the strong boxes or
the owners for years, and there may
well be an indispOsition to dispose oil
them at a time when SO much unceT-
tainty Overhangs Europe.
Present Balance of Trade.
In the second place. so great a change
has occurred in our trade relations that
we are now in position to take back our
securities at fairly rapid rate without
ernbarra assment. In August the balance
10. .fK,-f in n
tember it was Sl5.OiS.7 - in our favor.
and since then the balances in our favor
have been as follows: October, 1913 .OI4;
November SO. .299. AZ; December. Sl3l,SbS, =
or, with January unreported but prob
ably as high as December. The indeD-
tedness which in September looked so
formidable has been paid Off. and credit
balance has been accumulated which
every week grows larger and becomes
bulwark of defense against any move
ment Of securities this way which may
develop in the future. 1t now appears
to be demonstrated that the warning
countries will all want to buy heavily of
materials and supplies in this market
during the continuance of the war. Sew
eral of the governments have made loans
here, and other are negotiating. condi-
toned upon the use of the proceeds for
purchases in this country. These loans
are tangible offsets against any claim
that may be created against this Coun-
try BY reason Of these accommodating
credits the situation has become so Sc
cure that the gold pool to which over
SIO0. 1000. coo was originally pledged. to pro-
vide a fund for the payment of adverse
balances, has been dissolved and the as
sets distributed.
1t is true that the large monthly trade
balances in our favor have been due al
most as much to a decline of imports
as to an increase of exports, but until
the war ends and industry in Europe has
returned to a normal basis our impOrta-
tions are likely to be low. 1t is also TO
be considered that important amounts Of
railway notes maturing this year are
held abroad and that these will have
to be paid. but. on the other hand. the
heavy expenditures abroad of American
tourists will not be made this year.
Prosperity of the Farmers.
The prosperity of the grain and stock
farmers is beginning to make itself
felt in better trade in those sections.
The best signs are where stagnatiOn
has been greatest. to wit. in the cotton
goods industry and in the section pro-
ducing cotton. The degree of improve
ment here, in view of all the conditions
affecting cotton values must be re-
garded as very satisfactory. The rec
ord since the cotton exchanges were re-
opened has demonstrated the useful
ness of their facilities in stabilizing
and sustaining the value Of a large
crop during the period while it is pass
ing from the producers to the con-
sumcrs. The service is easily under
stood. The farmer wants to sell his
crop as soon as it is harvested; the
spinners want to buy it as they need
il throughout the year. II nobody buys
cotton but the spinners, or in other
words, IL nobody buys simply for in
vestment or speculation. the price is
certain to sag off in the early part of
the crop year, for spinners are not in
position to buy the entire crop at once.
The exchanges have developed class
of middlemen, call them investors, spec
ulatOrS or dealers. who are familiar
with the trade and who buy and sell
cotton The exchanges enable them
to buy without being obliged to actually
receive, store and safeguard the staple
itself The market is thus brOadened
and' the price fluctuations on the crop
wear are reduced to the minimum.
Everybody has more confidence in a
broad market which is the result OF
the consensus Of opinion of everybody
who is interested in cotton.
Cotton Goods on Better Basis.
with the price of cotton stabilized
by a free broad market, the price OF
cotton goods was put on a firm basis,
both at home and abroad, and Eer-
chants began to have confidence to
buy more freely The last half OF
January has seen an important change
in this respect. The fear that tho
bottom would drop out Of the market
and that competitors would be able
to buy goods At lower prices has
largely passed away. Mill prices arc
stronger, although the prices of goods
have not yet advanced as much as
the prices of cotton: sales have been
larger. manufacturers have gained
confidence, the mills are running more
steadily and unemployment is re-
duced.
with the exchanges open and cot
ton established on an eight-cent basis
in the Southern markets no artificial
methods are required to finance the
South. Capital flows freely 10 it and
with that section reimbued with con-
fldence and reappeRring as purchaser
in other markets a great factor In
the country's internal trade is in
good part restored. About one-third
OF the crop moved from first hands
at a cent a pound or more below pres
ent prices.
Railroads still Handicapped.
After account is taken of these promis-
ing developments there is not much to
say OF actual changes. The railroads
have been buying rails and some equip
ment to meet actual. necessities, but they
3 .-,1, ~ as4Nf