Forest City press. (Forest City, Potter County, D.T. [S.D.]) 1883-19??, 1917-02-09
TRADE AND BANKING
PRESENT AND FUTURE
BY F W. Tausi1. head of Department of Economics. Harvard University.
Just Appointed by President Wilson Head Of Nonpartisan Tariff Board.
lcopxriahted by New York evening POST.


made articles. specialties OF various
kinds, the finer textiles, goods highly An
ished, and elaborated. On this subject i
venture to refer the reader to what j have
SAID at large In my recent book on Some
Aspects OF the Tariff Question" In the
course of war we have necessarily turned
to the manufacture within our own Dor
ders of sundry articles which before had
been habitually imported. True, in some
cases this shift may give occasion to a
permanent change in sources OF supply.
1t will be found that some commodities
previously imported can, after all, be
made efficiently and cheaply within the
country. But there is not likely to be a
universal. or even Il general, r%cadjust-
ment of this sort. The domestic industries
which now produce CONNIE dities previous
~ imported must expect that many OF
these commodities will again be imported.
ne same permanent causes will be at
work In the future that We're at work in
tho past. We shall continue to import
those things we cannot produce cheaply,
JUST as we shall continue to eXport those
we can produce cheaply. 1t is a common
place that we cannot export unless we al
so import. Nor is 1t within the bounds of
probability-nay OF possibility-that our
imports Will consist solely of tropical
goods and of raw materials. such as we
Nv OAbA Nv hii' AAS WAAI
continue to be imports of manufactured
goods from Europe; and some industries
which during the war have turned to
making articles previously imported will
have to expect to go back to the old
conditions.
As to Exports.
Something of the same sort can be said
OF the prospects of export development.
On this subject there is much
tlOn. nOth 80 rnUaJ1u tvptfoonao ~ t1n
change To be expected and as regards it's
probable extent. The export trade is usu-
any talked of as enormously significant
as III export trade enriched the ountry by
some special process. The opportunity of
charging it offered by the wal conditions
Is supposed 10 be a wonder working way
OF bringing in an extraordinary golden
stream. The sensible doctrine on this SUBJ
Ject Is that am Increase of exports is adj
vantageous to a count, V, IN essentials, for
me same reasons, and through the same
FORCES as an Increase i'm domestic produce
tion and trade. 1t means real 9sin If the
exports are things which we can produce
cheapiy and sell cheaply. IL they are
things In which our labor and capital do
GOOD work, and turn out good products at
low prices. The mere fact that they are
exported does not mean thai the country
profits Unfortunately thereby. 1t Is the
existence OF advantageous conditions Of
production for the exports thai is sIgnifi-
can't. Now, In that essential respect we
nave In the last 20 years made important
advances.
our manufacturing industries have
gained In technical efficiency. i'm o%rpaniza-
lion, In capacity for economical produce
tlon. SO far as they continue to do SO,
ana SO far as the exports rest upon this
SOUND basis. we may look forward to q
really profitable extension of our export
trade. The war conditions may give an
impetus and occasion for a change, may
accelerate the working of Fundamental
causes. The bonds of custom and connec-
ton, which play a considerable part in the
commercial aspects of international deal
lngs. Will he not a little shaken, and hence
there Will be more free scope of the in
huence of the fundamental causes. But
1t must be remembered that the causes
underlying the international division of
labor Will persist. Many things will con-
tinue to be produced az cheaply, or more
cheaply, in European countries. and will
continue to be exported from them. II IL
foolish to suppose that we shall be able
to oobbie up suddenly a vast permanent
increase OF export business.
A matter about which there is much to
do is the possibility of 4 shift in the
financial center of gravity. Will New
York supplant London as the center
through which international payments are
effected? The future in this regard de-
Ponds partly, but not entirely. on the fac
tor Just discussed-the course Of interna-
tional trade in commodities. A great in
crease in exports from the United States
Will contribute toward bringing the New
York money market and the financial sys-
tenn of New York into a commanding
position. But the outcome will depend
more than on anything else on the rela-
tive rate of interest in New York as COM
pared with London or Berlin. 1t was not
merely accident, or established connec-
tor, or familiar routine, that made Lon-
don In the past the International money
center. The position Of London was due
essentially to two circumstances: on the
one hand. England's free trade policy.
which made the movement Of any and
every sort of merchandise via London the
simplest and easiest way of all; and on
the other hand, the fact that the rate Of
interest in London was lower thar my
where else in h world. All ~internation-
al financial transactions could In the past
DO carried out in London. and through
London cheaper than in any other way.
This was the reason why Berlin itself
financed via London. The widely rami-
flying and intricate mechanism of inter-
national banking n discount houses
rested. after all. on this basis: which in
turn rested ON the long continued accum-
ulation OF capital in Great Britain. Wheth-
er the same relative position will be found
in the future / would not venture to pre-
dict.
The accumulation Of capital in England,
carried on m 1t has been through 30 many
generations. has been enormous. and even
the portentious strain upon It through the
war loans N expenses may not seriously
shatter its sources. In the nature Of the
case. 1t IL unlikely that even under ordi-