Albuquerque morning journal. [volume] (Albuquerque, N.M.) 1903-1926, 1916-01-05
STATES
HAS MOVED UP IN
WORLD OF TRADE
Chief Of Foreign and Domestic
Commerce Bureau Shows
Effect War Has Had in
Standing of Nations,

10y nonaiso JOURNAL SPECIAL trAsso wiaei
Washington, Jan 4.--liow the
United states through the accident Of
T a world war mas moved from its place
. as commercially provincial and sec
p ondary power to the rank Of first i'm
portanee among the great nations Of
the World--economically, indnstrially
and financially--is told in detail IN
the first annual report Of pr Ed
ward T.. Pratt, chief Of the foreign
! ana domestic commerce bureau 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 preparedness.
: Two grave problems face develop
mont and maintenance OF foreign
trade. The first is declared TO be
/ that Of finance and the second that
( Of training mon FOR the work.
THE financing of our foreign
trade" Il says, "and 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
tions Of the world needed an Internal
tional clearing house ana London
supplied that At the same time
London became the clearing house
chiefly because she supplied large
part Of the capital needed for pub
lie improvements and large private
enterprises
THE United States never has taxi
en- any lnrge part IN financing for
cgn trade because Of tho compare
lively small part OF that business car
ried on here ana because also Of the
unfaniliarity of many OF our bankers
with the methods Of international fl
nance. Nor has the United States
taken any large part in supplying
capital ta other countries. ON ac-
count Of more profitable investments
at home we have chosen to invest
here rather than abroad This also
has been true because OF our position
as : debtor nation, hut probably also
TO considerable degree because of
la mental debtor nation attitude on
the part of our financiers.
tuangt 1akttg i'idct.
ron account, OF the war this situa-
ton Is rapidly changing. The volume
of foreign business done through New
York is continuously increasing and
New York banks are rapidly pr0Vid-
ing facilities for Americans who wish
TO export. Dollar exchange, a thing
practically unheard Of prior to this
year, Is assuming constantly onlarg-
ing imporfance IN the financial world
and is rapidly becoming popular as n
means Of meeting international ohli-
cations"
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.
I'm thus establishing branch banks
in foreign countries. the report con-
tinnos. 1--WE are following the lead Of
England, Germany and other Euro
pcan countries. which have used their
banks as trade outposts. European
exporters have been able. because
they had their own banking institu-
lions on the ground, to extend credit
TO their customers, when such credits
were deserved. our exporters have
been hampered hy 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.
II has been rare sight to see
letters Of credit or bills of exchange
drawn in dollars. Usually the Am
crican merchant has done his bust
ness in pounds sterling, often paying
the cost of conversion. The inaugu
ration of branch banks obyiates the
necessity of this practice and makes
it possible to do business in dollars.
With an increasing volume of dollar
exchange and with an increasing
number of branch banks and Smeri-
can banking institutions. dollar ex-
change will become more stable. At
present dollar exchange is preferred
in the money markets OF the world.
Whether It viii be after the restora-
ton OF normal conditions IN Europe
romans 10 be seen
Must BE Able 10 Loan.
I'VE can never hope TO realize the
really big prizes In foreign trade un-
iii we are prepared to loan capital to
. foreign nations anu To ltltlNA ttittt-
prises. The big prizes In foreign
trade are public ana private develop
ments Of large proportions, the build
ing OF railroads. construction OF pub
lie service plants, Improvement of
harbors and docks, and diggins of
canals.
New countries generally are poor.
They look to older and richer coun-
tries to supply them with the capital
TO make their improvements and TO
develop their resources. The coun-
, Try which furnishes the capital us
ually sells the materials and does the
work. The country that wants the
business must finance the purchases.
The same thing is true, but less d.
, rectly. in the case Of government
loans. But there is no doubt that
, the loans Of one nation TO another
/ form the strongest kind Of economic
bond between the two II is COM
monty said that trade follows the
flag Il is much more truly said
that trade follows investment or the
. loan
Or Pratt emphasizes the need for
trained men to handle foreign trade
! problems ana urges their education
along special lines Schools and