The sun. [volume] (New York [N.Y.]) 1916-1920, 1919-03-24
Great Britain and Others VIII Try
to Pay Us With Goods.


termines foreign trade rather than
that foreign trade determines the rate
Of exchange. We judge that this is the
queer idea Of our nelghbor because,
speaking Of the unpegging of British
sterling. the World says: "This
means, as with the fall in French ex-
change, either that gold imports will
be resumed from Europe or that the
American export trade TO Europe will
suffer-"
1t may mean. in truth, that as nor.
NAL trade conditions are resumed they
will be treated in normal ways. As
matter of fact the United King.
dom's stupendous buying of war sup.
plies has stopped already. No gold
no credits could revive that trade
only fresh hostilities could.
While the United Kingdom was
buying war supplies from us at the
rate Of millions Of dollars a day, the
United Kingdom virtually stopped
selling us anything. In the calendar
year Of 1913, for example, the United
Kingdom bought from US more than
| two billions of dollars of supplies.
In the calendar year 1917 it did the
same thing. But in the whole calen.
dar year of 1917 it sold to us only
$3.50, 100000. In the whole calendar
year of 1918 it's sales to us were down
as low as S14S.OOO,OOO.
During the war the United Kingdom
paid us for its prodigious purchases
Of fighting material here with a few
exports, all the gold It could spare to
us, all the securities II could market
with U.S. and all the credits it could set
up here by borrowing. After the war
the United Kingdom will pay us for
its greatly diminished purchases--the
war business ended-with all the ex-
ports it can land here and with fewer
and smaller borrowings.
During the war. when the United
Kingdom was buying from US two
billions n year and selling TO US an
average of little more than two hun
dred millions, there was no possibility
OF even an approach to trade equl-
librium. But as the United King
dom's buying is cut down in our mar
kets. cut down by the hundreds Of
millions. and as the United Kingdom
sales in our markets are run up by the
| tens of millions, there will be a sure
and swift return in the direction of an
equilibrium which can be wholly re.
stored with the usual transfer OF
| credits, together with other interna-
tional trade means of striking bal.
ances.
The United Kingdom, for another
example, is still n creditor nation
throughout South America and In the
Orient. In making international
trade balances a creditor nation like
| Great Britain will call upon South
America TO pay us with coffee, with
rubber, with this, that and the other
thing, on account of what South
America owes Great Britain. Great
Britain will call upon Japan to do the
same thing. In this way a creditor
! nation can pay its bills In this coun-
| try, when they are not so prodiglously
out of proportion as they had to be
In the war, without ever sending an
ounce of gold here, without needing
to borrow excessively here.
1t may interest those who do not
| follow the technicallties of striking
balances in internatiOhSSx rale, tax
ing care of exchange, &c. to know
that all through the war not only was
there no pegging of Canadian ex-
change in this market but Canada was
huge buyer here. Every year Can
ada's purchases in the United States
climbed and climbed until in 1918 they
had grown to nearly nine hundred
million dollars. For the seven months
ending with last January Canada s
buying in this market was running t
| the Hte of nearly billion dollars n
year. Canadian exchange, as We say.
was not pegged; Canadian exchange
WAS always at discount in this mar
ket. Yet Canada, under the stress of
war needs, never stopped buying; on
the contrary, Canada bought more and
more every month and every week
until the trade record between that
country and this country became fairly
Supplying.
But if Canada was not settling all
its adverse trade balance in this coun-
| try with gold or with loans, Great
Britain could help TO do this for
Canada. During the war Great Brit.
| ain was owing Canada hugely all the
time for war supplies just as before
the war Canada had been owing Great
Britain hugely all the time. If Can
! ada could not settle here and If Great
Britain could not, in fact, settle I'm
Canada, Great Britain at least could