The sun. [volume] (New York [N.Y.]) 1916-1920, 1919-03-24
US. URGED TO SELL
ON CREDIT ABROAD
Vicente Gonzales, Trade Adj
wiser, Tells of South Amer
lean Needs.
EUROPE BACK IN FIELD
American Manufacturers Must
Adopt Established Methods
to Hold Business.
sp.cinl corrn,pondence to TnE srN.

Special Correspondence TO TIE Sun.
ROCHESTER March 22.-Declaring that
Europe in spite Of all it's losses on ac-
count OF the war has enough money to
finance foreign trade and that the mer-
chants and manufacturers Of the United
States will have to sell at credit or not
at all. Vicente Gonzales. foreign trade
adviser OF the Mercantile Bank of the
Americas, In an address before the Credit
Mems Association OF this city. asserted
that I'VE must not be deceived by the
fantastic figures of our foreign trade
during the war
This trade" he continued. as not the
result of our efforts for expansion. II
came to us uncalled for, as a result of
the inability OF Europe to supply the
world with commodities, and because OF
the temporary need of the belligerents
for food, ammunition and other war ma
terials. The cause for this increase
having disappeared. we find ourselves
face to face with the cold facts"
Some of these facts as enumerated
by Mr.. Gonzales are as follows: Europe
Is hungry for foreign trade. Europe
must have It TO create foreign credits in
order to pay our investments. European
banks, even II filled with paper money
only, can care for the internal problems
of production. Europe needs raw ma
terials. some Of which are produced here.
some in other countries The latter will
be glad to sell Europe on credit and to
keep balances in London. turning them
over as required and resorting In the last
analysis to dispose of London bills in
the New York market, where the dollar
commands a premium.
Principles of Credits Abroad.
The principles OF extending credit
abroad" said Mr.. Gonzales, ARE no diff
ferent from those extending It at home.
We can select good men in any country
as we'll as We can here. Manufacturers.
who have engaged in foreign trade,
raised five points OF difficulty: financing
of foreign accounts. distance, time, lam
guage and laws
'"They complained OF the trouble they
had in turning over the accounts abroad,
except when they were against buyers in
one of the European money markets
where banks were willing and eager to
buy their drafts. This was true-few
banks would advance money against
drafts on South America. India and
many other countries. This condition
however, has now disappeared and
vided. of course. the drawee has stand
ing. I advised at that time and repeat
to-day that 1t Is not at all advisable for
a manufacturer to discount all his dra fits
on foreign countries. as accidents hap
pen in which the buyer Is not at all to
blame, and any day they may be called
upon to refund q draft which cannot be
paid. perhaps at very inopportune mo-
ment
t. 70
cent. OF this total. clubbing several
drafts as collateral to loans. so that the
margin of all may take care of any acct
dent to one and the hank will not be
entitled to call for refund against any
specific draft. At maturity tho loan can
be liquidated and extended for another
period against collateral still uncollected.
'They did not like the idea OF having
an account 5000 or 1000 miles away
and in countries where communicate ton
was not so frequent and speedy as in
the United States. 1t gave me. however.
little trouble TO convince them that a
man is just as good in Cape Town as in
Fory-second street, New York, and Just
as bad in Jersey City, few minutes
from New York. a. in Buenos Ayres or
Calcutta. 1T is always the same ques-
tion--the man, his means are just as
far away from you whether he lives next
may be just near to you even II he
is thousands of miles away. 1t depends
on him-the man-that is the whole
question in a nutshell.
During the war We have had the
evidence. Good reliable houses went
through the storm and maintained their
payments on. time in spite of all ex-
change troubles and others.
ut Is unpleasant to have to wait five
e. :.
at ninety days acceptance, when the
buyer is thirty or more days distant.
But he pays for the time and banks will
advance the money at his expense.
The Language Obstacle.
The question OF language is one OBJ
stacle more of trade than of credit II
Ia annoying to deal with a man whose
language we do not speak, but IL YOU
can deal with him and you can make
him understand your side of it and he,
not knowing your language, will buy
from you, you have crossed the bridge
He does not have 10 speak English to
be honest.
Money speaks no language in the
end. 1t is the same everywhere. and no
one yet failed to pay because he did not
speak the language OF his creditor
The objection to foreign law is child.
ish. II you ever have TO look forward
to the Aw in this country or anywhere
else to secure payment. it is far better
to leave that man alone. No one ever
thinks, in extending credit, that he may
have .s~G sue hiss debtor. II ne think
that will be the case, he does not have
10 be told to leave him alone-he will
do it without advice. Every country
has laws protecting honest people
against crooks and in no country Is
there any discrimination against foreign
creditors"
Speaking OF the problems of exchange
Mr. Gonzalez said; we cannot live
much longer doing gymnastics in try.
ing TO adjust trade balances with each
individual country so as to keep oui
money on level with theirs And Their
II we do, going even to the humiliation
OF borrowing to create artificial bal
ances In some countries II is not enough
to maintain our money alone on a level
Trade needs parity and stability OF ex
changes everywhere.
1T does no good to US to keep ouI
dollar at par, say. with Argentina 4
the pound sterling and the franc are
ut discount, because then British ant
French goods would have that advantag,
against US. II is easy TO understand tina
IL II cost 3 per cent less to buy fl thar
II costs to buy $4.s6, American currency
British goods have 3 per cent. advan
tage In competing with our own"
Chinese Envoy Reaches Peru.
IG,xA, Peru. March 23.-Tchin-Lin
wou. Chinese Minister to Peru, arrived
m Iima t0-dav II is hia purpo.o .,