The Detroit times., 1915-11-05
u. S. Part In Financing
Conflict Is Still
Very Small
EXCHANGE STILL
is UNSETTLED
Need of Capital at
Home Interferes With
World Banking
BY JOHN N. osKisoN

| NEW YORK, Nov. Sin the
words OF the department OF com
merce, the United States is "only
on the fringe OF the world OF inter
national finance" The part we have
| taken, up TO the present, in financ'
ing England. France. Italy. the Ar
gentine, Canada and Switzerland is
a minor one.
We are experimenting with for.
eign loans. AS yet we owe vastly
more abroad than is owed TO us, but
it will not be for lack Of urging 4
we do not reverse our position be-
fore the war is ended. In normal
years, our tourists in Europe spend
as much as we recently advanced
to the governments of Great Britain
and France. That half-billion loan
shows as q mere drop when set
alongside the census bureaus fig
ures of wealth in the United States
in 1912.
Sir George Paish, the British
financial authority best known in
this country. says that the wealth
of the United Kingdom, in 1914. was
Ss5, 600, ,0O0, 900. Our census bureau
said that in 1912 we owned sisS,.
90o. .00o, 900 OF wealth: the figure
must now be close to $500, 600 600.
Geo. Sc, for every $500 of national
wealth we have loaned England and
France 81.
II we are 10 accept the worlds in
vitation to become its banker, we
must do better than that; and de-
velcpments during the last few days
seem TO suggest that the old masters
of the financial game in London are
plotting to intrigue US.
The average American who could
grasp the argument for making the
Ahglo-French loan said, when its
details were all settled:
"Now that's fixed. Exchange
rates will be stabilized: our mann
facturers and merchants win no
longer have to accept British SOW
ereigns of uncertain value; trade
with Europe will Cow smoothly. Let
us, therefore, resume our search for
investments at home"
| At the same moment, our rail-
roads came forward with the most
hopeful exhibit of net earnings since
1909. Business has actually been
better with them. and the econo-
mics of operation which they have
effected in the last FIVE years help
ed to make a good showing. OF
1 course, the roads had a purpose
they wanted money for long-delay-
cd extensions and improvements, for
refunding note issues put out at op-
Tressive rates, for reasonable guar
antees of their financial future.
But something went wrong! With
in the last 10 days the English
pond droppd in value again-from
$40 to s4.61. The half-billion loan
has not stabilized exchange rates
and now fresh negotiations are on
looking to the establishment here OF
further enormous credits for the al
lied nations.
II isn't our bankers who are hesi-
tating about taking up the role OF
world banker. They know that bet
ter returns can be secured on loans
to foreign governments just now
than to Americc railroads. But II
is the average money owner who Is
holding back. And his reasons are
plain.
/ We have great wealth, to be sure
but we have no such vast bulk OF
il in liquid form as England. for In
stance, normally has available for
Investment in any part OF the world
We have great need for capital In
our 4s states as witness the grow
: ing hunger of the railroads. Also
. the average American is really neu
! trail and looks with dispassionatt
eve upon the very desperate natur,
OF the Allies task.
What seems 10 be In immediate
prospect is an extension of bankini
, credit 10 Great Britain. with Eng
J. land sending over the sort OF collat
} eral she used to demand of us. Blu
} II England prefers 10 keep the col
! lateral and force another insecure,
loan she can again use the threa
. OF demoralized exchange conditions
/. Uncle Sam, World Banker" How
}. long will II he before we get use,
e to the sign?