The Washington times., 1915-02-24

In the last half century Germany has
succeeded in building an important
merchant marine and In establishing
to a considerable. extent direct ex-
change with foreign governments. 1t
has proved that these two things are
possible. The great bulk Of Germany's
foreign commerce is still financed
through London. or rather was down to
the beginning Of the great war; but the
German banks were gaining ground in
their effort to gain control OF this
business.
The present is considered a propitious
time for entrance Of American finance
into this cosmopolitan field. because the
German foreign trade and foreign imam
cial system have broken down, and at
best will be restored only slowly after
VIII have been greatly impaired and the
home demand for money will require
more than ever before.
For. exactly the same reasons, IT Is
explained, there will also be better
chance Of .getting into the business al as
acy AS the world banker has been due
largely to her ability to proyide onssr cap.
prise. After the war inter rates at
home will be higher, and capital will
bid for the best investment. In short.
Europe is in a fair way to lose the I'M
has given her foreign adventures over
those Of the Americans. =,
A system OF cooperative 'over-sea
banks is ideal in the mind Of Govern
pairing a program that Is expected to
have Administration support when It Is
ready for Congressional consideration.
Since the war began there has been
a vast change OF attitude toward the
foreign trade opportunity for this conn:
try At first there was good deal OF
innocent enthusiasm over the notion
that Americans needed only to hurry
III with their sample cases and sell me
goods. But this was Immediately com
lem Of collecting the bill.
Must Know of Credit.
1t is absolutely necessary to know the
credit conditions Of a foreign merchant
to whom sales are made: to understand
the terms on which he has been &C.
| customed to buy: to carry his ac-
! count for such periods as may be
ss s, and tba at the he % time s.s ;s
Britain has made itself. through a lons
period of experience, practically the
custodian Of this very essential fund OF
information. and it has been one OF the
carrying on It's foreign trade. To give
the United States an Independent stand.
ing as an export country and financial
center. 1t Is necessary to establish such
intimate touch with foreign conditions
as win bring this information first-hant
to America.
The Federal reserve act permits
american banks with capital Of over
sl,ooo.ooo to create branches abroad: 0,
plan has proved satisfactory. Few
banks In America are strong enough
| to carry the expense Of branches ir
foreign countries during the periot
when there are small earnings. Ever
to make these foreign institutions CO
operative affairs. a group OF British
banks may unite In the ownership o
the stock dsHotsd of an ,aH bank
business: and this system Is especiali,
needed for the United States.
In few American cities Is there i;
volume OF foreign business to justif!
can or Far East country. Such an in
stitution must get its revenues from
so restricted class of business tina
only New York may reasonablF hop'
to establish them. On the other hand
provided for. banks in minor citie
could unite in the ownership Of thei
t>stock. and the advantage Of doing busi
ness through them. and the aggregat
of the business, would be sufficient t,
| make them earn money.
Help English Investors.
"Over-seas' banks Of this class in fac
have come to he highly profitable t.
English investors. The London an,
River Platte Bank in the year most re
Gently reported. earned 20 per cent div
idends; the London and Brazilian Banl
earned the same: the Banck del Peru
Londrcs earned 10 per cent; the Anglo
South American Bank, II, and the Brit
ish South American Bank II per cent
These are all institutions Jointly con
troled by groups of big British bank
and commercial houses: for in Britain
the big commercial house Is allowed t