New-York tribune., 1918-02-21
Dollar Exchange
Accepted by Chile
For Export Duties
New Financial Plan En-
ables American Interests
to Effect Big Saving

Ohclal recognition of dollar exchange
as an important means Of making in
ternational payments has been accorded
by the Chilean government through
the adoption of plan whereby part
OF the export duties on nitrate of soda
shipped from that country may be paid
in approved ninety day sight bills on
New York drawn in United States
dollars. Up TO this time such export
duties have been payable only in gold
and in sterling bills drawn On London.
The plan for using dollar exchange
~ such payments was first advocated
by. Leopold Frcdrick director of the
American Smelling and Refining Com
pany and treasurer of the Braden and
Chile Copper companies, all Guggen-
helm properties. Mr.. Friedrich, who
has long been prominent in the move
ment to establish regular trading in
dollar exchange in South America. par
tlcularly IN Chill, submitted this plan
to the Pan American Financial Confer
cncc. held IN Washington in 1915. It's
adoption on his suggestion is one of
tho first practical results Of that con-
ference. 1t is pointed out that not
only does it mean the firm establish
ment of dollar exchange in Chill, but
1t should in addition contribute to the
stabilization of the exchange situation
between the two countries. Secretary
of the Treasury McAdoo is known to
have taken personal interest in hav-
ing the measure adopted in Chilli, and
the Secretary, in conjunction with
Paul NJ Warburg. OF the Federal Re
serve Board, took UP the question with
the Chilean government ON their visit
to South America two years ago.
Big Saving in Commissions
Mr.. Fredrick. who caused dollars to
be quoted officially on the Bolsa, in
Valparaiso, said yesterday that the
American Smelling, the Bradcn and
the Chile companies have sold in the
last three years about $50 900 900 of
drafts ON New York Formerly all of
TINS financing was done via London.
The new method Of financing tEyough
bills drawn on New York has saved
the companies hundreds of thousands
OF dollars IN commission and interest
Two financial agencies have been cs-
tabllshcd IN Valparaiso, one for the
Bradon Copper Company and one for
the Chile Exploration Company The
mines OF these companies are hundreds
OK miles away from the Chilian me-
tropols. but these agencies centraiize
the financial transactions OF the enter
prise and by cooperation with the
American nitrate exporting companies
and other American interests operat-
ing IN Chile an active market for dol
lar exchange has been established
American nitrate OF soda imports
from Chile have trebed in volume
since the war and in 1917 were valued
at S6o,o00.ooo. The nitrotes are ut-
llzcd principally in the manufacture
OF munitions and for fertilizer pur-
poses. Now that export duties on this
commodity can be paid in exchange on
New ork an effort is being made to
have the Chilean government authorize
the payment of import duties by use
OF the same medium.
Reserve Board Rulings Help
The value of developing an intcrna-
tional market for dollar exchange is
generally recognized To encourage
It's use in lieu of sterling exchange.
the Federal Reserve Board has made
number of important rulings in order
to make 1T easier for South American
bankers to pay in American dollars
than in English pounds The board
recently issued decree permitting
member banks to accept drafts drawn
upon them by banks or bankers in the
following countries: Porto Rico, Santo
Domingo. Costa Rica, Peru. Chilli,
Brazil, Venezuela. Argentina and Bo-
livia. The board has ruled against ac-
cepting bills of similar nature from
European bankers on the ground of it
being unnecessary to do so.