The Birmingham age-herald., 1915-05-02

We hear a good deal nowadays about dollar exchange as applied to the financ- ing of transactions arising from ourl trade with foreign countries. year ago this was almost an unknown expression, and. generally speaking, long bills drawn against international transactions were
 in sterling, in reichsmarks or in francs
 Our great incorporated banking institu- tions were not permitted to engage in the acceptance business, and when cargo of grain cotton left an American port. for Liverpool, drafts against the ship ment were drawn in sterling, or when a vessel laden with dyestuffs or jute bagging cleared from Bremen or Ham,
 burg for Boston or Savannah credits covering the invoices were expressed in
 reichsmarlSs, so that the foreign banker exacted his toll in both directions.
 Tn April, 1914, however, the New York legislature, by statute, permitted anks incorporated by that state to [ cept drafts and bills of exchange avn against not only shipments of goo to and from foreign countries. but a ainst domestic transactions as well. TT led eral reserve act, which was enaeeefl by
 congress in December, 1913, contai ed clause permitting national bank i, in
 transactions involving the importasaen or exportatlon of goods. to accept for amount not exceeding 50 per cent of their capital and surplus; and by a recent amendment, this limitation has been ex- tended to the full amount of capital and surplus. Figures recently compiled show that trust companies in New York and the national banks have outstanding $117000,00 of acceptances.
 Growth of Acceptance Business
 "The development of the American acceptance business has undoubtedly
 been promoted by the European war, and the progress already made by large New York City national bank toward establishing foreign branches under the provisions of the federal reserve act, in- dicates a disposition on the part of the national banks to supplement the efforts of the trust companies that have al- ready esta ablished foregn branches and engage in financial operations of an in- ternational character. The most inviting field for foreign branches at present seems to lie in the West Indies, in the canal zone and in the South American countries. The conference of South American financiers soon to be held in Washington for which congress made an appropriation, is an evidence of the in- terest that our government is taking in the development of closer trade relations with our South American neighbors. While we have for many years been purchasers of South American commodi- ties, such as coffee. rubber, nitrate and hides, our exports to those countries have been negligible as compared with the trade controlled by European nations
 The deplorable conditions now existing throughout Europe have not only given us an opportunity of taking over a sub stanfin1 of fhis bnSippSs hut ba almost compelled us to arrange to do SO, besides opening the way for an extension of our trade with Europe and with the orient.
 Securities Held Abroad
 Shortly after the outbreak of the war last summer international balances against us on current account were as- was estimated at the same time that the total value of American securities held abroad was probably not less than s6, GOO, : coo, ,OO0. Notwithstanding the serious de- precision in cotton, which fortunately proved temporary, the loss in that staple was more than made up in our total volume of trade by the high prices re- ccved from our exports of feedstuffs. The balance against us was in a few l months entirely wiped out, and large balan noes in our favor begun to accu-
 mulate. Certain lines of industry in this country, such GS the manufacture of munitions of war and accessories, have received tremendous impetus Re ports to the department of commerce in- dicate. according to statement made by Secretary Redfield, total exports for the current fiscal year of two and three- quarter billion dollars. with a resulting trade balance in our favor of about one an6 8 quarter billions This balance. however, is due to our smaller volume of imports, rather than to increased ex-
 ports. For the past nine months our excess of exports over imports has amounted to s719000.000 and it is thought possible that our net trade balance for the calendar year 1915 may be as high as g, 000.000. or about four times what might have been expected under normal conditions. As against loans for enor-
 nous sums, to which there Is reason to
 believe substantial subscriptions have
 been made in this country, and should the war continue for several months longer. American subscriptions will un- doubtedly assume far greater propor- tions. The removal of stock exchange restrictions and the notable rise in the market value of standard stocks and bonds which has been in evidence for some weeks past. together with the breadth of the market. have given for eigners an excellent opportunity to dis
 pose of their American securities, and