The Washington herald., 1918-03-19
U. S. PREPARES
TO GO AFTER
FOREIGN TRADE
Gov. Harding Tells Com
mercial Congress Of Re-
serve Bank Plans.

Despite shipping difficulties and
handicaps In the form Of embargoes,
American business will be ready to
take a prominent place in world trade
when the war ends. This was the
message of Gov. w. p. G. Harding.
Of the Federal Reserve Board, to the
Southern Commercial Congress, meet
ing here last night.
A strong banking foundation, laid
under the auspices of the Federal Re-
serve Bank system, will offest any
handicaps suffered due to the war,
he declared. Gov. Hardipg said, in
part:
Is War Policy.
"As a part of the war policy OF
the government there is a strict
supervision of exports and imports,
with restrictions and absolute pro-
hibitions in many cases. Lack Of
transportation is an additional handi-
cap to the immediate development OF
our foreign trade. Every nation has
in force a practical embargo on ship
ments of gold. and no gold is being
exported from the United States ex-
cept by special license and then only
In cases where shipment is found to
be compatible with the public in
terest
In these circumstances 1t Is clear
that the transfer OF gold or the ex-
change of credits necessary to carry
on our trade with foreign countries
Is attended with even greater diff
fculties than the transportation Of
commodities. Our exporters and
manufacturers, should. however, keep
constantly in mind the great pos
sibilities of a world trade after the
war is over. and they should lose no
opportunity Of arousing a sentiment
favorable to American goods in those
countries with which our trade has
heretofore been limited.
Reserve Act Applies.
The Federal Reserve act was de-
signed in large part to expand our
trade with foreign countries. Not
only were transactions based upon
the Importation or expectation of
goods accorded special considera-
tion in that section OF the act relat-
ing to operations in which Federal
Reserve Banks may engage, by the
Federal Reserve Banks themselves
are authorized to buy and sell bills Of
exchange and to establish and main
tain agencies in foreign countries.
National banks having a capital and
surplus OF a million dollars are
authorized by the Federal Reserve
Act to establish foreign branches
and there are today many branches
-of American banks operating in
South America. Latin America and
European countries.
Several banks have been estab-
lished which are owned in whole or
in part by groups of national banks,
and one of them has, at this time,
forty-eight banks as stockholders,
who have thus combined to facili-
tate foreign trade. These banks are
not authorized to receive deposits
in this country except such deposits
as may be incidental to or connect
cd with their foreign business. The
Federal Reserve Board has recon-
mended to Congress that these
banks be given Federal charters.
VIII Finance Trade.
The foundation. therefore. for
financing our foreign trade properly
through the medium of American in
aIitutions has already been laid and
when at last the war is ended and the
restrictions upon commerce can be re-
moved and a greatly augmented mer-
chant marine can spread its sails upon
the seven seas and carry to all the
nations of the world products of the
farms, the mines and the factories OF
America, branches of American banks
will be found at the distant ports to
welcome these messengers of COM
merce and to finance both their in
coming and outgoing cargoes.
The foundation of an American
financial structure standing through
out the world has been carefully COM
ceived and securely laid and the super
structure will follow as conditions be-
come more favorable.