Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1915-01-21
THEU.S.
HAS A TRADE
BALANCE
FIRST time

Chicago. Jan. 20-For the first time in
history the United States is experience
ing the sensation of a real trade balance"
in its favor DR.. Edward E. Pratt, chief
Of the federal bureau of foreign and do
mestic commerce, told the Illinois Bank
ers' Association at it's annual dinner to-
day. "As a result Of the developments
abroad during the last six months" DR..
Pratt said, we have turned the corner
and are facing new era Of business
has made the term home market obso-
lete and archaic and put IN its place the
unfamiliar term of world market.
The change began on July l, 1914. he
said. and by Dec. 81 last year the trade
balance exceeded remittances by f13S,-
0o0,000, due to the expectation Of food
stuffs, merchandise and gold and silver.
At the same time came "a period of ex-
pert capitalism, and We are Just at the
point Of expanding into the worlds mar
kets.'
export Capital"
To illustrate export capital DR..
Pratt cited the Swedish loan. 100000:
the Argentine loan of sl5NU,feo and the
this country druing the last six months
Turning to the effects of the European
war upon international finances, DR..
Pratt said information now at hand
places the total of war loans made by
the bel.igerents at sG,0)o, oooUD. all made
at high rates of interest.
The income expected and obtained on
investments in Europe" he continued,
has been much less. than that prevail
ing or expected in this country. This
war will. however be succeeded by
period of high interest. 1t will be sue
ceeded by a period Of intense demand
for capital for reconstruction purposes.
The stock of capital is being deplete.
and it is more likely that financial ex-
haustion rather than military exhaustion
Will determine the final result.
"Cheap Capital"
at the close of the war. then. Europe
will not have much advantage over US
in the matter Of cheap capital.
AS to economic conditions which must
arise abroad, DR.. Pratt said the wars
toll of dead wounded and diseased would
be paid from the ranks Of the skilled la
have been sent to the markets ct home
and abroad. ..
Another important factor. in the situa-
ton, he added would be the loss Of
good will by the European countries.
Taking up the Lat;nAmerican field,
Dr. Pratt said American trade develop
ment in those countries long had been
hampered BY the long-term credit ex-
tended by European nations.
After her present debts are hauidat-
ed he asserted. Europe will be unpre-
pared 10 keep her working capital tied
up in a floating debt. and European man
ufacturers will be no more willing to
give longtime credits than our own.
Again, We will be on .parity with Eu-
ropean nations Reviewing the situa-
ton in Latin-AmeTican countries. Dr..
Pratt said The war had dealt them
hard blow; their products were tied up
in their warehouses for the most part
and must be held or sold at loss. In
suggesting ways 10 aid these countries
and stimulate American trade with them,
he said, extension Of longtime credit,
the organization Of a syndicate pool to
make specific advances, the purchase In
the United States of Latin-Americar Sc
curities and the establishment Of Arnerf-
can banks in those countries We're the
plans that had been proposed.