The Washington times., 1915-06-06
AMERICAN BANKS ABROAD

No single instrumentality will be
so useful, at this time, in developing
American trade abroad, as banks.
The National City Bank of New
York announces its arrangements to
open several branch institutions in
South America, and now comes the
declaration that Chinese and Ameri-
can capital are to unite in forming a
Chinese-American bank at Shang-
hal with capital Of approximately
$6,000,000 gold. The capital will be
held equally in this country and
China.
The world at large has been so
long dependent on credit arrange
ments leading through European
money centers, that the utter de-
moralization Of European business
facilities necessitates at the very
beginning q reorganization of the
whole relationship Of finance to busi-
ness. There must be means to take
up and carry present commitments
OF the business men in the outlying
parts Of all the world, before it will
be possible for them to go ahead and
resume their regular tradings with
new markets.
The case Of business house de-
string to change it's banking connec-
tions, in q time of panic, is the ex-
act parallel. II 1t be a business
house that has conducted it's affairs
largely on long time and expanded
credit, the parallel will be still more
impressive. The house may be do
ing a profitable business, and be in
position to continue that business;
yet the necessity Of making a bank
ing change may be highly embar-
RAISING, especially in time when
few banks are prepared to extend
accommodations to new customers.
If it has been doing business large
ly through sale Of acceptance or
rediscounting of notes, maintaining,
in proportion to the whole volume
Of its transactions, a small and de-
cidedly active balance, the parallel
to South American countries will be
yet the more accurate.
Transportation facilities are Of
the greatest Importance, but they
will come If trade demands them.
There are very considerable trans
port concerns already in operation
for business with both South Amer
lea and the Orient. The testimony
OF all the experts Is that financial
accommodations must be provided,
and the effort of the National City
Bank and the cooperating Chinese
and American capitalists to provide
these is sign of the opening Of a
new era in foreign trade relations,
and of opening it in the right way.
These moves toward expanding
the outreachings of American
finance testify, too, that this coun-
try's business realizes that a new
deal in world commerce is at hand.
There is every reason to believe that
as Mckinley said in his last speech,
the period Of isolation is past. When
this war is over there will be a re-
sumption of competition, perhaps of
cut-throat competition, by reason
of the determination of the Euro
pean industrial and commercial
countries to recover their lost trade.
But they will not again have their
former advantages over the Ameri-
cans, for the simple reason that
their great capital wastes during the
war will make it impossible for
them to do business on the close
margins that formerly were pos
sible. Interest rates will have to be
higher, because all the former cred
itor nations will be debtor nations;
they will have so much money in
vested in the dead horses of hatred
and slaughter that the money will
not be available for the live affairs
of business development. The United
States will have its opportunity
then, and if transportation and
financial organization can mean
while be prepared for American use,
there will be no doubt about the
next generation bringing to these
shores such fleets of trades argosies
as even the golden age of American
shipping never dreamed.