New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1915-06-25
PROBLEMS OF EXCHANGE
Joint Credit Suggested as Remedy
for Extreme Decentralization.

To the Editor Of The Tribune.
Sir: Your very excellent article in to-
days Tribune, under the heading Topics
Of the Day in Wall Street" regarding the
drop" in sterling exchange is succnct and
worthy. take the liberty to call your at
tention to one or two possibilities that are
likely TO influence foreign exchange to some
extent.
Little IS heard as to the efforts OF the
pro- German bankers using their extraordi-
nary knowledge Of finance and conditions and
all the tricks of the trade" to force their
allied enemies to disgorge the gold held in
reserve, particularly by England. II this
could be brought about not only would it
depreciate the value Of exchange and enhance
the cost Of living in the colonies, which
would be moro harmful to the Allies than
TO Germany, but would seriously impair the
credit of England, France and Russia, which
would be disastrous to those countries and
endanger their success in the present war.
Exchange rates will harden if the Allies
win the Dardanelles.
A retardng influence, should exchange con-
tinue to depreciate, would be a curtailment
Of exports from these United States TO for
eign countries other than those in the war
zone. This would be brought about by the
price OF exchange reaching point which
would make the cost of merchandise landed
in those countries or colonies so high that
the importation thereof would be prohibit
tive. The volume Of exports to ports outside
the war zone is so great that il the same
should cease and the market be relieved OF
that amount of exchange the excess Of ex-
ports over imports would be so decreased
that rates OF exchange would "stiffen."
As one remedy of extreme Generalization
Of the exchange market | would suggest that
England, France and Russia issue Joint
credit" binding themselves separately and
collectively, and that the same be offered for
sale in these United States, to bear or
per cent interest per annum and issued for a
series Of terms, say from ten to fifty years
from date of issue or declaration of peace.
Ny reasons for the joint arrangement are
based on the probability of England reach
ing limit of credit and to bind France and
Russia to properly protect those financing
them. England will have an overwhelming
debt after the war is ended, and If the
Allies win there will be small possibility Of
the defeated nations reimbursing the vic
tors in cash, and probably not in land or
value from other sources.
England would depend on the colonies as
suming some of the costs of the war; but
they have had, and are having, heavy dis
bursements for the same purposes them
selves and will be reluctant to imperil them
selves further for the mother country by
paying part Of her debt after the war The
colonial sentiment for independence has
been growing for years, as evidenced by Can
ada, Australasia and South Africa demand
ing their self-controlled armies and navies
and the gradual curtailment of the power Of
the crowns representative in those provinces
or declarations.
Russia might repudiate her debt, in which
case England and France would have to en-
force jointure, for otherwise it would be
difficult to force Russia to pay. France
would live up to all agreements. Collective
ly it would be a safe investment for the gen.
eral public. It is only matter of time
when the United States's fnanciers who
take care of the financing Of the Allies will
have exhausted their resources, and then the
public will have to be approached to float
the great demands of the warning nations.
Bear in mind there is plenty of money in
the country, but not all of it is available
for financing nations at war; that while vast
fortunes have been made by few individ-
uals by sales of material to the bellgerents
they would afford small investment for war
credits, so that it is the general public who
must be looked to for further funds to in
vest. AS the peoples incomes are not in
creasing, but RS their expenses are, il will
require a fairly safe investment to attract
be the three nations jointure mentioned
above. HENRY R. RITCH
New York, June 10, 1915.