The Birmingham age-herald., 1919-03-07
A QUESTION OF FINANCING

This, according to Mr. Morgan's in- timation. involves matter of financ- ing. In other words, we must be able through the consummation of very large financial transactions to ad- vance to those who buy American goods the money with which to pay for them.
 The best authorities here are frank in their admission that if we are to maintain our foreign trade at the pres ent high rate we must be prepared to give credit to Europe and upon a very large scale. How large may be in- ferred from the fact that the s1,00o.- 900. 900 new credt-which. under the bill that Congress considered the war finance corporation would be allowed to give to European nations-would be sufficient for not more than the liqui- dation of three months trade balance. Estimating with these figures as a basis, it is fair to presume that we
 must extend credits during the next
 12 months in the asgregate of s4,000,- 00o.000 That amount, together with the money value of our imports would
 serve to liqudate the purchases by Europe of American commodities.
 Nevertheless, the day must come when the nations which take advan- tage of these credits must liquidate them. That will involve new financing upon very large scale They must pay the banks and the investors and
 the government for the loans they se- cured whereby they could pay Amer ican exporters for the commodities they bought in the United States.
 Tn the current circular of the Ma tional City bank the statement was made that the trade balance in favor of the United States created by our
 January International trade is larger than the total production of gold in the world last year, exclusive of the production in the United States.
 In other words, 1.-the new gold pro United States in 1917 were to be used to liquidate the January trade balance there would not be enough of it to serve this purpose.
 Therefore it Is apparent that the na- tions which buy of us cannot pay their debts In gold. There was a time when it might have been possible to lioui-
 date the trade balance by rsendiae American securities which were held in Europe back to the United States That is no longer practicable. No ac- curate estimate has been made of the aggregate amount of American secu- rites which have been returned to the United States since the European war began. But there is no difference of opinion respecting Gne IdCt that lHe returned securities represent nearly all of the debt owed by the United States to Europe before August, 1914 Some securities are still tightly held in Europe and doubtless will continue to be held because of their high &C., curity value and the comfortable "a e of interest which they carry.
 Two methods remain whe -ehv the indel tedness other nations owe tc the United States on account of trade may be entirely or in part liquidated One is the sale of securities in the United States issued by European mu- nicipal.:ies. public ctility corporations, raiiroad corporations and others. The common impression in the financial district is that hundreds of millions of these securities will be placed Tn the Americas. market and there .s little doubt that # the terms 1re sat isfactory they w:ll be absorbed Dy :n- vestors of ty the hanks. Nevertheless ss it is no. deemed probable that suf- ficient amount of European securities will be marketed in the United States from individuals or from the banks or the government. This must be done in accordance with sound principles of financing and it is assumed that some thing of this kind was what MT. Moi :