Evening star. [volume] (Washington, D.C.) 1854-1972, 1919-06-22
By GROSVENOR NJ. JONES,
Assistant Chief, Bureau Of Foreign
and DomeAtic Commerce.

Y HILE In most sections OF
M Europe the war destroyed
" " or impaired industry. in
other parts of the world i;
acted as great stimulus to industry
Absorption of the leading countries OF
Europe in the war stimulated agricul-
ture. mining and manufacturing else
where. These industries were stimu-
lated not only in the United States. but
also In Canada. most of the Latin
American republics. Japan, China, India,
the Dutch East Indies and South Africa.
The stimulus of war has greatly in
commodities. as. for example, wheat,
corn. sugar and rice. among agricul-
tural products; copper. lead and zinc.
among the metals: iron and steel,
textiles. machine tools and meat prod
ucts, among the more important manu-
featured products.
Contrary to the belief OF many Euro
peans. the war alone is not responsible
for the great increase in the foreign
trade of this country. The war doubt
less accelerated the development of that
trade, but the fact is that our trade
with other countries was increasing in
volume rapidly for at least a decade
prior to 1914.
Trade Balance a Handicap.
Far from helping, the great excess of
value of exports over imports. produced
by the abnormal war demands of Eu-
Low to hre ator,
a temporary impairment of our foreign
trade at a time when this trade is
needed to take up the slack of the after
war period.
This check need not cause alarm. 1t
is a natural reaction from the long
period of extensive foreign buying in
our markets. During the war the So
called favorable balance of trade has
been liquidated in part by the return
of several billions of dollars of American
securities and by the payment Of more
than 81. 000. 000. 900 in gold, but a still
greater amount is still due US in the
form of British and French government
loans of approximately $1,000, DOC. 900.
raised through private banks. and in
credits Of upward of $4,000. 10000 ex-
tended by the United States govern
ment-
1t is clear that Europe cannot con-
tinue to import in large volume from the
United States without some new f1nan-
cial arrangements. Even if some salts
factory method of financing should be
devised. the new credits would be alb
sorbed largely in purchase Of foodstuffs.
necessary raw materials and semi-man-
would be available for the conduct Of a
broad general trade on a very extensive
scale.
Not Seeking New Credits. =
Europe does not. however. appear to
be demanding new credit facilities in
this country except for the most neces-
sary commodities. The countries SEEM
ingly most in need Of credit are taking
active steps to reduce their imports to
the lowest possible level SO as to revive
their domestic industries as well as to
right the balance Of trade which has
been heavily against them for several
years Passireiy. these countries have
withdrawn their support from the ex-
change market and are permitting ex-
change on New York to fall, largely. no
doubt. with view to making this mar
ket an expensive one in which to buy.
Since Europe Is heavily in our debt
and Is DESTROYS Of mourning as little ad-
ditional Indebtedness as possible. and
since most European countries are not
ready to export manufactures goods and
raw materials, even to the extent OF
tn0~pre-Waf volume. ana are not IN
position to ship much more gold in
liquidation Of trade balances. the only
immediate recourse Of the countries in
debted to US Is to reduce to the lowest
limit possible their irnportations from all
sources. and in particular those from
the United States. The stern facts Of
their economic situation demand this.
Nevertheless. Europe must buy in this
market large quantities OF foodstuffs.
cotton. lumber. hides. copper and other
necessary raw materials. and also GER
tain classes Of iron and steel products.
machinery. etc. During the coming year
these purchases will probably far outrun
in value our purchases from Europe.
How Can Europe Pay Debt?
How will Europe liquidate this un-
favorable trade balance. in addition to
paying $500. 00o. 900 or $500. 0o0. 900 in an
nual interest on her debt to US? How
can we make this market a favorable
market for Europe to buy in? There are
several possible solutions of this prob
lem. ma uely:
On We might invest largely in puh-