Weekly journal-miner., 1916-01-12
HOW TO RETAIN THE
 TRADE WE HAVE GAINED

WASHINGTON. Jan. 5.-How the United States through the accident
 of a world war has moved from its place as commercially provincial
 and secondary power to the rank of first importance among the great na- tions of the world-economically, in- dustrially and financially-is tol1 in
 detail in the first annual report of Dr. Edward F. Pratt. chief of the
 foreign and domestic commerce bur
 eau Of the department of commerce.
 What the country has gained tenn porarily through the fortunes of the
 European conflict. says the report, il can hope 10 hold in the commercial struggle that will he resumed at the conclusion of peace only by the most far-sighted commercial preparedness. Two grave problems face develop ment and maintenance of foreign trade. The first is declared to be that Of finance and the second that of training men for the work.
 The financing of our foreign trade" it says, "a1d 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 ner position not because of pres tige merely. but because the nations oi the world needed an international clearing house and London supplied that. At the same time London be came the clearing house chiefly be cause she supplied a large part of the capital needed for public improve ments and large private enterprises.
 The United States never has taken any large part in financing foreign trade because of the comparatively small part of that business carried on here and because also of the un- familiarity of many of our bankers with the methods of International finance. Nor has the United States taken any large part in supplying capital to 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, but probably also to considerable degree because ot a mental debtor-nation attitude on the part Of our financiers.
 "On account of the war this situ- ation is rapidly changing. The vol ume of foreign business done through New York is continuously increasing and New York banks are rapidly pro viding facilities for Americans who wish to export. Dollar exchange. a thing practically u1heard of prior to this year, is assuming constantly en- larging importance in the financial world and is rapidly becoming pOpu- lar as means of meeting interna- tional obligations"
 Two provisions in the Federal Re serve Act. the report says, have beer 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 foregn branches.
 Tn thus establishing branch banks in foreign countries" the report con tinueS, we are following the lead of England. Germany and other Eu ropean countries. which nave used their banks as trade outposts. Flu ropean exporters have been able, be- cause they had their own banking in stitutions 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 orr mer chants and manufacturers have been open to the scrutiny of our competit ors.
 Tt has been a rare sight 70 see letters of credit or bills of exchange drawn in dollars. Usually the Ameri can merchant has done his business in merchant has done his business in pound sterling, often paying the cost of conversion. The inauguration of 1 branch banks obviates the necessity | of this practice and makes it possible l to do business in dollars. With an volume of dollar exchange l and with an increasing number of !. branch banks and American banking ! dollar exchange will be- ! come more staple. At present dollar l exchange is preferred ir the money
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