The Detroit times. [volume] (Detroit, Mich.) 1903-1920, 1915-08-06
az ROGER w. eAssoN


Tho average man II going about
TODAY sticking out his chest and con-
graduating himself that he II 4 Unit.
ed States citizen. Perhaps you are
one of these men. thinking that we
are lucky dogs over here. rakinE In
the money. while our poor brothers
in Europe are being killed. manned
or ruined.
There IL no doubt that we are in
nnitely better on than the poor fell
lows on the other side; but when
the war Is over we must help pay
the bills.
Although a short. sharp period OF
prosperity will directly follow the
cessation OF hostilities. yet In the
general depression that will later
come over the entire world, we can
not escape suffering.
The different countries OF the
world may be likened to different
tanks Of water. When commerce 10
freely flowing from one country to
another. these tanks are the same
a. II all were connected at their
bottoms with pipes. In such case,
although the tanks are entirely DIFF
ferent In size. one tank holding many
times more water than another, yet
water stands at the same level In
all the tanks.
OF course. today this 10 not the
case because the pipes connecting
certain tanks have been blocked up.
thus temporarily permitting the wa
ter in these different tanks to stand
ut different levels. Thus ut the pres
ent time. the level In our tank Is
away above the level In some Of the
European tanks. When the war IL
over. however. these pipes will all
be clear again. and Immediately the
water will come TO the same level
In all the tanks. What does this
mean? II means that the level In
the German. French and other tanks,
which Is now so low. will rise, and
the level in our tank will lower.
When using the tanks az illustrat-
Ing the different countries. what do
the pipes represent. Why. these
pipes represent the steamship lines
for transporting goods and the for.
eign exchange system for transfer
ring money.
Now. what Of foreign exchange ?"
When one country Ia buying as
much OF another country as II il sell.
ing. II is a very simple matter for
the people Of either country to pay
their bills to the other. II you should
buy $1,000 worth OF English woolens
you would never send the $1,000 to
England. but would 60 to a foreign
exchange broker in Chicago and pay
that $1,000 over to some Illinois
farmer who has just sold $1,000
worth OF wheat to England Thus
our farmer gets his money and you
pay your bill. while another ex-
change broker in Liverpool makes
the same adjustment over there, be-
tween the -four manufacturer who is
buying the wheat and the wooden
manufacturer who Is selling you the
cloth.
When the exports and imports OF
a country are about the same, for
eign exchange Is said to be normal,
which simply means that II IL Just
as easy for the Englishman to pay
his Indebtedness to us as for US TO
pay our indebtedness to him. or
course. II there Is a small balance
which one country owes the other.
this can be adjusted by a shipment
OF gold. for each country has only a
small amount Of gold that II can
spare. This means that II the differ.
ence Is too great. foreign exchange
10 all upset. and the merchants must
either pay very high prices for such
exchange az they can buy or else
they must stop buying.
That Is the present situation. The
old world Ia buying very much more
from us than we are buying from
the old world. and foreign exchange
IL 80 deranged that II an Engiishman
buys $4,000 worth OF wheat In Chi.
cago he must pay $4,000 for t.;
while II you should buy $4,000