The Blackfoot optimist. [volume] (Blackfoot, Idaho) 1907-1918, 1915-05-27

ance of our foreign trade. People in
general, and the business men in par
ticular, even bankers, it is to be re-
GREETED, have no very clear idea of just
how this foreign trade affects the
"warp and woof' of our domestic af-
fairs.
As matter of fact, it has taken
great European war to show US our de-
pendence upon Europe. The situation
that confronted us Immediately after
the outbreak of the war taught us that
we were to considerable extent eco
nomically and financially dependent up
on the older nations of Europe.
Perhaps most important in consed-
ering our dependence upon Europe is
the amount Of foreign loans that have
been made to the United States. 1t is
estimated that the United States owes
no less than $7,OOO,0OO,0O0 to Europe,
distributed among the great nations as
follows:
France ACKNOWLEDGEMENTS. 1,O00,000,000
Germany ...............-... 1880, 100000
Holland .......... 100000, 900
Probably our net Indebtedness to
Europe at the beginning of the war
was not much less than $6,000000, 900.
The Importance of these foreign loans
lay in the fact that if at any time
Europe was in need of immediate funds,
the vast quantities of American secur-
tiles could be thrown upon the open
market for whatever sum could be real
lied, procedure that would surely re-
suit in tremendous break in the
American security market.
Another evidence Of our financial
dependence upon Europe was the fact
that London was the great financial
center of the world. London acted as a
financial clearing house and the ma
jority of international payments be-
tween this country and other countries
was made through London.
The United States has also been to
large extent dependent upon European
centers which act as markets for Ger.
tain staple products. For example, the
United States buys about 1,110,000,000
pounds of wool every year from the
United Kingdom and great quantities
of rubber, tea, coffee, and even tobacco
are purchased in European markets.
To a certain degree the converse OF
this situation is true. The great
European ports are also markets in
which our goods are purchased and
ans-shipped to other parts of the
world. This is especially true of Ham
burg, which purchases large quantities
of American goods estimated to ex-
coed $100,00O,000 annually and is
bought entirely with view to resell
ing to other countries. Our direct
trade with Russia has been very small
because much of our goods finds it's
way to Russia through the hands of
German merchants.
Another of our difficulties is the lack
of an American Merchant Marine. At
the outbreak of the war we were de-
pendent on the nations of Europe to
transport our imports and exports,
being able ourselves to ship only 81
per cent. of our water borne commerce
in our own bottoms.
Finally, and perhaps of the greatest
Importance as affecting our internal
prosperity, is the fact that large por-
ton, 62.S6 per cent. in all, of our ex.
ports went to Europe. The fact that
we also received large part of our i'm.
ports from Europe made it all the more
necessary to export to Europe in order
to pay for our importatons.
Let us consider exactly what happen
ed at the beginning of August last year,
upon the outbreak of the great Euro.
can war. Suddenly, at one blow, the
relations of the United States with
Europe were cut off. A market for
exports was for the time being cut
off. The credit machinery of the world
was wrecked.
The important features of the situa-
ton from the point of view of the Uni
ted States may be summed up under
the following heads:
(D. The immediate and serious rise
in the New York rate of sterling ex-
change.
(2). Large exports of gold from the
United States.
(3). Practical cessations Of imports
and exports.
az. The issuance of emergency cur.
rency.
(5). Closing of the New York stock
exchange and the stock exchanges in
other countries.
(6). Declarations of moratoria in
the principal countries of the world.
An immediate and what seemed at
that time to be the most sar;ous f;r