Arizona republican., 1916-01-05
WORLD WAR HAS
ADVANCED j. {.
To F|RST PLACE
Accident Of World Conflict
Moves This Country TO
Rank of First Economic
cally, IndustriaIly and FL
financially, Says Pratt.
Republican A. p. Leased wire1

Republican A. p. Leased Wire1
WASHINGTON. Jan. Allow the
United States through the accident Of
a world war has moved from its
place as a commercially provincial
and secondary power to the rank of
first Importance among the great ma =
tons of the rld-economicalIy. in
dustrially and financialIy-is told in
detail in the first annual report of
DIR. Edward Z. Pratt chief of the
Foreign and Domestic Commerce Blu
reau of the department of commerce.
What the country has gained tenn
porarily through the fortunes of the
European conflict, says the report. it
can hope to hold in the commercial
struggle that will be resumed at the
conclusion of peace only by the
most far-sighted commercial prepar-
edness. Two grave problems face de-
Velopment and maintenance of foreign
trade. The first is declared to he
that of finance and the second that
Of training men for the work
The financing of our foreign
trade" it saws. land in fact by far
the larger part of the financing of
the worlds trade has hitherto been
done through London. During the
last hundred years London has been
the worlds financial market She
has held her position not because of
prestige merely. but because the ma =
tons of the world needed an inter
national clearing house and London
supplied that At the same time
London became the clearing house
chiefly because she supplied a large
part of the capital needed for public
improvements and large private en-
terprises.
The United States never has tax
en- any large part in financing for
eiGn trade because of the compare
lively small part Of that business car
ried on here and because also of the
unfamiliarity Of many of our bankers
with the methods of international fl
nance. Nor has the United States
taken any large part in supplying cap
ital to other countries. on account
of more profitable investments at
home we have chosen to invest here
rather than abroad This also has
been true because of our position s
a debtor nation, but probably also to
considerable degree because of a
mental debtor ton attitude on the
part of our financiers.
"On account of the war this sit
Uation is rapidly changing. The vol
ume of foreign business done through
New York is continuously increasing
and New York banks are rapidly pro
Niding facilities for Americans who
wish to export. Dollar Exchange,
thing practically unheard Of prior to
this year, is assuming constantly en-
larging Importance in the financial
world and is rapidly becoming popu-
lar means of meeting interna
tiOnal obligations"
Two provisions in the Federal Re
serve Act the report says have been
of material assistance to the foreign
trade. one is the introduction of the
use OF acceptance and the other per
mission granted to national banks to
establish foreign branches
In thus establishing branch banks
in foreign countries the report con-
tinues. we are following the lead of
England. Germany. and other Euro
pean countries which have used their
banks as trade outposts. European
exporters have been able. because
they had their own banking institu-
tions on the ground, to extend credit
to their customers. when such credits
were deserved. Our exporters have
been hampered by the lack of these
facilities. More important than this,
documents containing often the most
confidential facts Of our merchants
and manufacturers have been open to
the scrutiny of our competitors.
1T has been rare sight to see let
ters of credit or bills of exchange
drawn in dollars. Usually the Amer
lean merchant has done his business
in pounds sterling often paving the
cost of Inversion. The Inauguration of
branch banks obviates the necessity of
this practice and makes it possible to
do business in dollars. With an in
creasing volume of dollar exchange
and with an increasing number of
branch banks and American banking
institutions, dollar exchange will be-
come more stable At present dollar
exchange is preferred in the money
markets of the world Whether it
will be after the restoration of normal
conditions in Europe remains to be
seen.
we can never hope to realize the i
really big prizes in foreign trade un-
til we are prepared to loan capital
to foreign nations and to foreign en-
terprises. The big prizes in foreign
trade are public and private develop
ments of large proportions. the build
ing of railroads. construction of pub |
lie service plants improvement of har-
bors and docks, and digging of canals |
New countries generally are poor. |
They look to older and richer coun-
trise to supply them with the capital