New-York tribune., 1919-10-10
Foreign Credit
Clearing House
Is Organized
" i'll Collect Information for
Guidance of American
Concerns Engaged in Ex-
pors Business

The initial step In what is said to
be the lrst effort made IN this country
to centralize and control American
foreign credits was taken yesterday in
the election of a number of leading
business men and bankers III various
parts OF the country as members OF the
board Of directors of the Foreign
Credit Clearing House The bylaws
OF the corporation provide for twenty
five directors of which ten shall be
international bankers, ten manufacture
ing exporters, and five representing
other industries. Each Of the twelve
Federal reserve districts are to be
represented on the board
Mark c. Prentiss was elected chair
man of the board and will serve as
president of the organization until
permanent officers are elected. Mr.
Prentiss stated that the officers will be
announced in few days. Among those
being considered for the presidency, he
said, are two of the foremost bankers
Of this city.
Under the operation of the Foreign
Credit Clearing House it is proposed
to merge all information on foreign
buyers now III the possession Of the
large international banks and manu-
pairing that data it will be possible
to establish q definite credit rating for
all foreign merchants buying goods
IN the United States. Such a system,
1t is declared, will provide the new
corporation at the outset with probably
the most complete knowledge possessed
IN this country of foreign credit rat
lngs. In addition, it is proposed to
augment that information by reports
from representatives to be established
IN twenty-three different countries.
Assurances OF cooperation and in
formal endorsements have been received
from many organizations throughout
the nation, such as the American
BANKERS Association, the American
Manufacturers Export Association, the
ILLINOIS Manufacturers Association and
scores Of prominent Individuals
The organization, according to Mr..
Prentiss, will be in position to furnish
its membership the last analysis on
the credit standing of merchant or
organization anywhere in the world
SO absolute will be it's verdict or the
ability of foreign buyer to pay for
any merchandise bought from a mem
Der of the Foreign Credit Clearing
House, that advice to members on an
application for credit will take the
definite form of "Ship' or "Do not
ship"
The company is already assured of
potential membership of about five
thousand by representatives Of manu-
facturers and exporters on the board
OF directors. 1t is estimated that it
Will be able TO provide definite credit
rating to approximately 250,0 foreign
merchants.
"Thc operation of the Foreign
Credit Clearing House. Mr. Prentiss
said in discussing the subjec "will be
one Of the greatest factors in our com
mercial history in broadening the
foreign trade Of the United States
The Importance OF it can best be un-
derstood when it is realized that
through the organization some five
thousand manufacturers in this country
will have equal credit facilities for
selling their products throughout the
world and foreign credit losses will be
reduced to the vanishing point.
"Undcr present conditions there is
nothing to prevent merchant in
foreign country establishing his max
imum line of credit for say SIC 600 with
one of our banks or manufacturing
exporters and then by giving the or
ganization as a reference he can open
buy mis- maximum credit from each
house at the same time Under the
plan we propose this cannot be done
"The Foreign Credit Clearing House
VIII keep a minute record of every
foreign transaction made by a member
OF the organization. All purchases
made by firms in other countries viii
be recorded and it Will thus be mpos-
sible for a foreign merchant to buy
beyond his credit rating.
"Our members, upon receiving ap-
pication for credit from foreign
source. can be told definitely whether
sale of merchandise shou be made
The final judgment on a credit applica-
ton will be made by the Foreign Credit
Clearing House and a member VIII Be
told to ship or not ship
The clearing house, Mr. Prentiss
added, will be authorized by foreign
houses to act as under their power of
attorney and accept drafts drawn
against them in New York. Nt present
It is necessary to send these documents
to foreign countries for acceptance, and
frequently three months elapse before
the dralt IS returned and made avail
able for discount. This innovation is
regarded as the means Of avorting the
serious delays in such transactions.
81 desire to emphasize particularly"
purpose of the Foreign Credit Clearing
House to give credit information on
anybody or to anybody. 'M;rchants
will submit their orders to rs and 2
definite decision viii be stamped on
them either to accept or decline the
order. | believe the Importance of this
wiz Instantly be recognized by all en-
gaeeH in foreign trade
Mr.. Prentiss was asked to make a
statement regarding the insurance Of
these IGN credits. q plan that has
been tentatively discu sed. and In roulv
said:
I'VE have given great deal Of
thought 10 that proposal and have
ioachcd some verv definite conclu ions
On it. The Foreign Credit Clearing
House viii, under no circumstances.
guarantee credits. We viii check these
credit and decision viii be that Of
the best credit department ever de-
vised. There is, no doubt that after
these credits shall have been pa sed
by tho c'earin" house they will become
very attractive insurance ri k for
both stock companies and mutual com
panies entering this field"
The directors named yesterday are:
Alfred L. Aiken, president, Ma
tiona SfNwmut Bank, Boston; John
]. Arnold, supervisor international
business department, Bank of Italv,
San Francisco, and vice cha man
committee on foreign affairs, Cham
ber of Commerce of United States;
DR.. w. f. Aughenbaueh. New
York Commercial"; Richard Washh., ,rr