The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1919-12-24
DECENTRALIZATION
Of EXCHANGE IS.
GIVEN ANALYSIS
Three Important Factors, Says
Wall Street, Cause
Depreciation
AMERICA GREAT CREDITOR
Allies and Other Nations Now
Owe the United States
$15,OOO,000,O00

in the decentralization of foreign ex-
change, Ineligible to the average
man, rise above the complexities of
the present situation, according to
old-timers in Wall street.
These are: Cd Allied and other
nations of the world owe the United
States approximately $15,000,0OOO 900;
(2) American manufacturers hesi-
tate, owing to peace treaty uncertainty,
to accept big advance foreign orders;
90 England's virtual suspension of
gold exports outside the British col
onies is repulsing American trade.
Gust why the British pound sterling
normally worth $4.S665 in American
gold, should have declined so much
since the war ended, and what it all
means is an obscure question" said a
New York financial expert. "The. pres
ent situation, Sir George Paish's ap-
prehensions Notwithstanding, is by no
means hopeless. Prophecies of
'breakdown' Of credit are not we'll
founded.
america, the storehouse of the
world and now the worlds banker, is
in the same position England was in
after the Napoleonic and American
Civil wars. She bought the cheap Sc
.curities of impoverished nations in
most prodigious manner and thereby
laid the foundation for her future
wealth. We must do likewise and DO
it within the next two or three years
by which time these abnormal condl-
tions will have passed.
IT, S. AT DISADVANTAGE
with pound sterling 25 percent or
more below par England can sell to
the United States at great advantage.
We can sell American goods abroad
only at a great disadvantage because
we must add the abnormal rate OF ex-
change to the goods to get into for
eign markets. Premier Lloyd George
recently declared, when sterling was
selling at discount of Is percent,
that the discount really represented
"protective tariff of Is percent on
goods manufactured in England. Ger
tainly it is helping to keep American
goods out of that country.
"The only remedy for this condition
is for the United States to buy foreign
securities and extend long time credit
fer merchandise We are in strong
economic position. The nations OF
Europe must have our cotton and
wheat and, since they are so heavily
indebted to us and we must extend
them many more millions to put them
on their feet what is the difference
whether we buy their bonds or SEND
them our merchandise?
Everyone in Wall street knows
that if the Peace Treaty had been sign
ed in Washington an International Ex-
change Committee would have been
organized long before now to estap-
lish exchange and bring about other
necessary readjustments. Never DUR
ing the darkest days of the war, when
the Germans were almost at Paris, did
British and French exchange go to
where it is now. The British, during
the war, by a system Of credits with
the United States, had sterling peg
ged' to $4:52.
"The tension over and gold exports
curtailed there was nothing to keep 1t
that close to parity. Indeed, unless
the United States loosens it's purse
strings there are London financial ex-
merits who say the pound sterling will
drop as low as $3.50. That would be
calamity. 1t would be a tWo-edged
sword injuring both England ana the
United States.
Europe is like a man on the verge
of death due to starvation. When you
find such an unfortunate you feed MN
gradually until the stomach becomes
accustomed to digesting food. Now our
aim has been all along to stuff Eu-
rope with all kinds of American pro-
ducts. We have piled up trade bal
ance, according to former Secretary or
Commerce Redfeld, aggregating s4,-
OO0,OOO,OOO year. Europe's financial
system, like the starved human stom-
ach, has been unable to assimilate it.
Consequently, we thus contribute to
tthe decentralization of foreign ex-
change and, incidentally, in initiation
help to lower the purchasing power OF
our own dollar.
"When you consider, as Mr.. Red
field points out, that $4,OOO,OOO,OOO rep
resents American dollars at par and
must be paid by those who owe 1t in
deprecated currencies, making it the
equivalent Of 5,0OO,000,OOO, the resalt
cannot be healthful to future Amer
ican trade and commerce. Foreign
BUYERS are going into more favorable
markets"
CHRISTMAS AT CROOKSTON
Miss Hilda BergstrOm left last night