South Bend news-times. (South Bend, Ind.) 1913-1938, 1917-08-12
The NetO Basis for Foreign Exchange
and International Finance

The primary reason for appoint
inc the committee OF foreign eN
change bankers to deal with prob
lens which have beer treated b.
Americas entry into the war has
not been publicly understood The
United states government. clearly
t0reseeing the trend of events, for
some time before the declara ton o.
war held up all wireless and cables
TRANSFERRING money 10 Germany and
Austria
1t was not until after war had
been declared that this action 10y
the government was revealed tc
those who had handed i'm these
cable transfers which were not car
ried out Finally when the gov
ernment authorized the wireless
and cable companies TO notify
senders that the money had not
been transferred, great deal az
confusion arose as go the status Of
those VINO had bought and paid for
cable Transfers and the bankers
with whom this business had 1een
done.
obviously. Il was no fault Of the
bankers that these exchange trans
actions were not carried through.
As a matter of fact they had fulls
believed their cables had heen FOR
varded The purchasers of the
drafts on the other hand could
claim that. havins made deal
wiki the rankers here. and failure
10 carry II through was not the
fault OF the buyers Of the exchange
how they were to transfer the
credits was the concern Of the
bankers agreeing 10 10 il. no. of the
merchants manufacturers and 9th
ers who had bought and paid for
The exchange.
The ARRANGEMENT aCreed upon is
This Any customer who wants tnI
cancel his purchase of exchange
may do So. but no bank or banker
can compel him TO nullify the
agreement entered into. A. II Is
morally certain that marks viii be
dearer when peace comes. the
bankers are well advised i'm lettin-
any buyer cancel the deal because.
il II is not Cancelled 1t viii devolve
upon the banker 10 procure the eN-
change when the war ends and
complete the transaction at the
other side
Exchange ON New Basis.
our agreement 10 lend $1,000 Z
600 600 to the allies has completely I
caaueed the whole outlook tor lr- ,
ternational exchange There are
simply no precejeuts whatever toI
suide one i'm analyzing the future. /
However. one cannot stop doins ,
business but must try 20 foreSee !
trends as best possible
What are the conditions that /
have now been produced
This S&.GCO. 10000 and any other /
billions that may Ice furnished later
ON 10 our allies in Europe Will not
only call for heavy interest pay
ments TO MS but the principal viii
have 10 no paid sooner or later after
peace is established. These colossal
loans viii probably run for a speci-
fed number of years with the UNI
derstanding that repayment viii
not have 10 DO made IN one bump 4
sum. but in iustallments. part of the
loans being renewed
Therefore. Eneland and Franc
and Russia and Italy Will have 10
lose no opportunity 10 accumulate
dollar exchange for this purpose.
No human beins can foretell 10
what extent this viii raise the price
of dollars and lower the Price OF
sterling and other European eN-
chan-e but IL is my Judgment that
not for MANY. MANY Nears-p erhaI> .
not On m, lfeume-wiu dollar eN /
c1au-e and sterling exchange sell at
the le1 els which ruled before the /
war eauno: see how dollars ear