The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1915-03-03
THE AMERICAN DOLLAR
IS MIGHTY MONEY NOW
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other settlement arrangements. There
are three methods by which our for
eign trade can be financed under ex-
listing conditions.
First-We can grant credits to for
eign countries.
Second-We can insist on large re-
mittanceS of gold.
Third-We can buy back American
securities held abroad.
What is expected to happen is this:
The $S0,00o,oOO gold sent by us to
Ottawa is likely to be allowed to come
back if the downward movement in
sterling exchange goes much further
say to 4.75.
France is also counted upon to part
with gold if exchange conditions be-
come more active; so far the gold pre-
MUM in France has been less than
per cent, not a grave matter in war
times.
Germany's Condition.
Germany's whole financial and ex-
change position is clouded by the new
and unique conditions that have arisen
through the British governments &C
ton. But it can be taken for granted
that if payment in gold will bring IN
supplies, Germany will not hesitate to
resort to her very large gold reserves
gold reserves are created to be used
in times of emergency.
Other countries are likely to remit
more or less gold to the. United States
if the flow of international trade con-
tinues at present.
Secondly: American bankers will
be found ready to grant generous
credits to countries DESTROYS of using
the proceeds solely to purchase Ameri-
can goods. Important developments
may come to the surface any day
Thirdly: Sales of European owned
American securities are certain to con-
tinue in at least moderate volume, al
though there are sharp differences of
opinion as to what quantity of sound
American investments will be given
up by English and French investors
who realize that their money is safer
here than anywhere else.
Money knows no patriotism re-
marked one banker of wide expert
ence in international finance. Euro
investors to sell out American securi-
ties And they have far less to sell
than people suppose. We are enter
ing a very choppy, uncharted flnan-
This feeling of caution and uncer-
tainty has become more pronounced
within the last ten days. Chiefly be-
cause of the extraordinary course be-
ing pursued by Germany and England
with respect to the commerce Of neu-
trails.
Commerce handicapped.
In it's March circular, out today, the
National City bank gives serious con-
sideration to the present and pro
tions, and this explains how COM
merce is being handicapped:
AN exchange rate on London of
$3.50 or therea bouts means that the
pound sterling does not go as far as
usual in settling dollar debts. The
English buyer of cotton or wheat in
our markets must give more sterling
to make up a given sum in dollars.
The situation is reversed from what it
was last fall. when the balance of
payments was against US and dollars
were moderated The present situa-
ton is one which we can view, natur-
ally, with comparative equanimity
but next to a business mans anxiety
about how to pay his own debts comes
the anxiety about how other people
are going to pay him and continue
to buy of him.
1.-The low rate for the pound sterl-
ing makes our commodities cost more
to English buyers and to all buyers
who must make payments through
London, without. any compromising
advantage to US. 1t is equivalent to
tax on commerce and amounts to
an obstruction between US and our