South Bend news-times. (South Bend, Ind.) 1913-1938, 1915-08-30
FOREIGN EXCHANGE
IN NEED OF RELIEF
Henry CIewS Finds U. S. Trade
Seriously Deranged - I'm
ports Fall, Exports Rise.


NEW YORK. Aug. 30.-Some form
OF relief in the foreign exchange sit
uatiOn Is imperative, and a solution
will undoubtedly be facilitated by the
conference between American and
British bankers now on the way to
this port our foreign trade con-
tinues seriously deranged, imports be-
ing greatly curtailed while exports
persistently show q tremendous eN-
pansion. For example the exports
from New York during the week md
ing Aug. IA. were 81. 100000 against
S10,700,000 the same week last year,
while our imports, though increasing
slightly are still running far below
normal. This excessive prepOnder-
ance of exports will continue, and
probably upon an even larger scale
during the remainder of the calendar
year. on June 30, the excess of ex-
ports had reached $1,000 100000. and
some authorities estimate that il will
touch as high as S2.eOO.000,0OO by
December 81. Europe cannot pay In
merchandise or gold; some form Of
credit must be established If we are
10 accept foreign war orders. The
urgency Of the crisis is emphasized
by the coming TO New York of Lon
don's leading bankers. The idea of
importing S25O,OOO,OOO gold is less
ed. The supply Of the precious metal
in this cOuntry-nOW estimated at
nearly $4,000, 600. 0O0-is so excessive
that our hackers are naturally un-
willing to see any further addition
because Of it's uselessness and it's pos
sible infiationary tendencies. The lat
ter must be carefully guarded against.
IL is well TO remember, however, that
it is imitation of credit that is most
a. ho "a rrrat haV
IL within their power TO curtail credit.
whether based upon gold, securities,
merchandise or reputation. An eX-
cess OF gold or money may and some
times does cause imitation. but this
tendency cab always be avoided by
those who control the lending situa-
ton; and now that the Federal re-
serve system is in operation imitation
could be much more easily resisted.
Moreover, if this proposed $3.50, 00O,-
600 in gold were imported. the credit
based thereon would be almost entire
" devoted TO financing foreign war
orders. and would have little effect
here beyond the stimulus of war ord
ers which has already been expert
enCed and largely discontinued in the
present high prices of the war group
shares. The settlement of British OBJ
legations by sales of American stocks
ers could undoubtedly be found, but
John Bull is evidently indisposed 10
surrender more of his American in
vestments. which are among the
choicest OF his possessions. There has
been some talk Of mobilizing or mass
ing British holdings of Americans and
depositing them here as collateral for
loans But even this plan arouses no
particular enthusiasm. On this side
of the Atlantic the most approved
plan is of course. a British loan i'm
this market on conditions likely to
attract American capital. but the
terms asked are likely to strike hard
at British pride and prestige: because
England cannot expect TO borrow on
this side OF the Atlantic at rates and
terms to which she has been accus-
TONED on the other. Capital natural
Is commands better rates here than
in Europe; hence its flow here in nor
NAL years: and American buyers
would certainly balk at the British
income tax on the bonds Some one
of these plans may possibly he adopt
ed and an important loan. possibly
100000, coo. arranged for at an early
date Others would follow, proVid-
ed the United States itself is not
drawn into the war. IL perchance we