Saturday news. (Watertown, S.D.) 19??-19??, 1915-03-11
S. May Become
World Money Center
BY Jonathan Winfield.

washington, ID. C.--The war debt
OF Europe to the United States is
growing larger every day. The trade
balances of this nation are mounting
higher and higher, with the dollar
dlsplacing sterling exchange in the
leading marts of the world. The en-
tire financial fabric of the nations is
being woven in a new pattern, with
the United States directing every
movement of the eavers
How will Europe pay the debt ow-
ing to us-particularly Great Britain,
France and Russia, the three bellig-
erents whose purchasing power has
been almost entirely concentrated in
the United States? Bankers and
economists differ on this subject.
Some say the American securities
held in Europe will be sent back to
Us in the attempt to reach financial
equilibrium; others believe long
term credits will be established in
New York; there is another theory
that Europe will prefer to send us
its own securities to be taken up in
the money market on attractive
terms.
One thing is certain-Europe will
not send us any gold in payment Of
her debts, no matter how uneven the
international exchange rate gets. In
the first place, she needs all her gold
preserves for future contingencies;
the United States has more gold than
it requires at the present time, and
in the third place it is extremely dan
gerous to trust gold to ocean ship
ment at the present time.
Should the war continue another
six months, Europe will W to the
United States, in round figures, a
billion and a half dollars. This es-
innate is made on the basis Of the
January showing, when there was an
excess Of more than $145, 900, 900
worth of exports over imports. These
figures are made over and beyond
the millions owing to Europe through
her maturing obligations in the Unit
ed States and dividends declared on
her holdings of our railroad and in
dnstrial stocks.
Russia already has established a
credit of many millions in the United
States, and it is rumored that Great
- SSAiAk II III lnC iSSll I
fish a credit of more than 500, 000, 900
in this country. Such a credit will
not only allow the present huge Brit
ish exports of American goods to con
tinue without confusion or hesitation.
but will serve to equaliZe internation-
al exchange, the peculiar antics of
which during the past few weeks has
threatened the financial stability of
our dealings with Europe.
The one major fact in connection
with the war situation, financially
speaking, is that it will probably
make the United States the banking
and financial center of the world.
London's supremacy hitherto has
been ~undisputed. The var, however,
has shifted the scene of great finan-
tcial operations to New York. and
there is every likelihood that London
will not be able to recover all the adj
vantages she has lost. Neither Great
Britain 0 France are now loaning
any money to the outside world. The
Bank of England six weeks ago plac-
ed a ban upon all lending abroad;
and since that time it has become
clear that Russia will require all the
financial aid that France and Great
Britain can give to her. The burden,
or the opportunity, of financing weak
er and smaller nations has largely
fallen upon the United States, and
this near not only that New York
is becoming a powerful international.
financial center, but also that a vast
amount Of trade that formerly went
to Europe Is hereafter coming to the
United States. 1t is automatic that
trade follows, not the flag, but the
lending power of the nation.