Evening star., 1918-01-20
BY I. A. FLEMING.

l., a. e
Senator Owen. chairman OF the Sem
ate committee on banking and cur
rency. has announced that he will soon
Introduce a bill for the creation OF
foreign exchange bank. under tho su-
pervision of the federal reserve poaro.
For months the senator has given
deep thought to this matter. one OF the
recognized needs long sought oy I'M
porters and exporters who have suner-
ed Inconvenience in seeking exchange
on MANY markets of the world, every
place where banks do business the
world over.
It is claimed that the proposition is
fraught with deep importance 10 'he
United States. and that the possibilities
for trade expansion are coequal to the
methods used in Europe in pushing for
commerce.
the subject would be stronger than the
series of resolutions passed by the
Chamber of Commerce of the onieeo
States, as follows:
"Whereas the foreign trade OF the
United States for the last fiscal year
shows a balance in favor of this coun-
try Of nearly 81 ,000. .000, 900; and
whereas loans to our aiiies greatiy
exceed our favorable balance OF trade
and
of conditions which tend to curtall I'M
ports because imports represent the
only form of cash payment which our
entire foreign trade is yielding; and
premiums penaiize imports and tend
Indirectly to increase the enormous in
flationary debit balance which the ma
tion is rolling up against the future IN
the form Of foreign loans; ana
Whereas the advances to our allies
are now proving a boomerang Leading
to the depreciation of the American
dollar in foreign markets, because OF
lack of governmental reguianon; ana
Whereas all our allies are now TAX
ing every step necessary to protect
their own currencies abroad; and
"Whereas the American dollar is now
at a discount of from to 20 per cent
in neutral foreign countries:
"Be it resolved, That the United
States government through its proper
departments take whatever action may
be necessary to keep at parity the
American dollar in every country OF
the world"
According to business men generally,
importers, exporters and economists,
the establishment of foreign ex-
change bank or the addition of this
system with direct connections with
banking interests Of the world would
be the greatest possible step in the
direction of the desired end.
Protects Money Unit.
In the formation Of the great
Deutsche Bank. its export program is
found in these words:
.sThe object Of the company is to
carry on a banking business of all
kinds. particularly in the furtherance
and the facilitation Of commercial re-
lations between Germany. the other
European countries and oversee
markets
The Bank of England is the exchange
bank of the great British empire. The
Bank Of France and the national banks
of other nations function in like man
ner.
The establishment of the federal re-
serve system filled the great want of
restricted operation for the United
States but it's friends admit it did not
go far enough when it did not plan for
exchange facilities.
OF late organized banks have estab-
lished branches in several foreign
countries to the aid of the exchange
ed.
1t is next to impossible to maintain
commercial competition unless adequate
exchange facilities are provided for the
merchant carrying on MS llne OF trade.
England protected the pound sterling.
France the franc. Germany the mark
in times Of peace. Some of these are
making strong efforts to do it now.
1t is next to impossible to send or
bring gold from abroad now, save at
great expense. The federal bank for ex-
change Is more needed than ever.
The National City Bank and some
other fiscal institutions introduced the
acceptance to aid foreign trade. and the
federal exchange bank will make ac-
ceptances common and easily handled
to the advantage of the federal reserve
system. Member banks of the system
would be able to take full advantage
of the exchange bank and it would be
the final straw to bring all banks into
the reserve fold.