The sun., 1919-01-27
GREAT TRADE WAR
DUE, SAYS GONZALES
Banks Needed in Financing
Manufacturers Interests in
Foreign Lands.
CREDIT NOT CHANGED
International Business Is Hys-
terical at Present, Cuban
Declares.
CREDIT NOT CHANGED


fore the Round Table here declared that
international trade to-day is hysterical.
II not In a chaos. unsettled and uncor-
tain in all directions, and that It can DO
directed properly only II manufacturers,
exporters. shippers and bankers all CO.
operate and act in perfect harmony.
Some of the points made by Mr.. Con-
zales are as follows: "A great trade war
is in sight. a struggle for the worlds
commerce. a share OF which belongs le-
ultimately 10 us
Banks are needed to-day more than
ever in financing and caring for the
| manufacturers interests In foreign eoun-
tries They should assist manufactur-
ers, both in the matter Of credit and In
that OF exchange. The main service Is
not what banks can do here for manu-
| facturers, but what they can do at the
other end"
Discussing the service regarding credit
and exchange in detail. Mr.. Gonzales
| said in part:
Credit In the abstract, has been changed
the risk is the same. Men who were
| good before the war have been just as
| good during these unfortunate four years
| and will continue the same. But the
granting and mobilizing OF credit as the
world may need Il and as other coun-
! tries may grant It is a matter OF great
| concern It is the turnover or credit
! that concerns manufacturers-to conf
pete with other countries and keep AT
the same time within domestic condi-
tons as they are.
Banks Face Big Task.
Banks ordinarily are supposed 10 do
no more than present drafts for accept
ence ard for payment and TO receive the
money II the drawee is willing and able
to nay. and then remit proceeds. rms Is
| not enough. IL is not half enough the
banks should use their Judgment In re-
aslng or not shipping papers; they
should think and feel for the customer
and protect him as far as possible. They
! should think OF the man thousands OF
| miles away and advise him at least. or
consult him what TO do in every emer-
gency.
banks sending collections 10 their
| correspondents should request them 10
protect the goods and the shipper at all
events cabling for orders when neces-
sarv, regardless OF whether the drafts
have been purchased or not. They should
keep their clients posted as to the fate
~ their collections, advise them when
paid or when not paid. cabling when
deemed convenient. They should In
struct their correspondents to act as
owners in all cases Of accident to the
! goods, to insure them and store them
properly and TO dispose OF them II neceS-
| sary in proper time, without unduly sac
| rihcing them; in one word. taking care
OF the unfortunate man so far away and
who cannot act for himself.
another point is the proper selection
OF clients and the proper Limitation OF
their credit The desire TO increase
business should not lead manufacturers
70 overdo it, Credit is sometimes
very dangerous factor in trade. Many
BUYERS are encouraged to buy more than
they can turn over because OF extraor-
binary facilities offered. Many sales
manager and salesman. proud or the
never ceasing increase of their business
disregard sometimes the possible diff
flculties in which their principals may be
involved.
ct questioned many times the advisa'
bllity OF governing credit extension &c
BUYERS by what they are considered
good for Manufacturers should have
In mind. first OF all. how much they car
carry the account for A good buyer IL
not only the man OF means and The
honest man. Ability, good Judgment. !:
also a factor In considering credit. ant
no good buyer will ever be induced &c
hwy any more than he can handle. This
may be, however. more than what the
manufacturer can afford to grant. Every
business has its natural limitations anc
every manufacturer should hrst ascer'
tain how far no can go. considering moi
| =
get but also how much he can carry
himself without accommodation.
Limit to Credit Action.
at is unwise to depend exclusively or
the credit a manufacturer can obtain
that IL. on what hts bank will discoun
FOR him. He should be able TO carry {
portion OF all his foreign accounts
When he knows how much he can gran
he should divide this amount among tn
different countries in which he deals an'
distribute the amount allotted to eacl
among the different customers in proper
ton to their volume OF trade.
"Sticling inhexibly TO this rule. man
ufacturers will find banks more wiilinl
to assist them. Banks assistance i
more comfortable when given wlthou
limitation: manufacturers would fee
greatly encouraged II they could discoun
every cent they exported. But this /
extremely dangerous for them. An!
draft or account unpaid would fall baci
/ on them for the full value without warn
ing and perhaps at very inopportun
moment
II have always found 1t much NOR
! convenient. both to manufacturers AM
! to banks. TO arrange for advances OF
certain percentage OF all their foreigl
credits maintaining a current account o
advances against collections ooverin
say so per cent OF all. Manufacturer
who cannot carry 20 per cent OF thei
foreign accounts without discountin
4 take great risks in going into the foreig1
A business at all.
3 MANY accidents happen which della
, at least the payment OF foreign accounts
Loss in transit, calling for claims agains
: insurance, never or very seldom settle
within a few days, Will make draft un
, collectible, giving the holding bank tn
, right OF demanding immediate refund
: The same applies to an unpaid draft be
4 cause OF the death Of the buyer Will
4 goods were on the road. The deman
, for refund may come at a moment whe
, the manufacturer cannot meet the pay
a ment without great inconvenience
Exchange Is Problem.
: AN this can he avoided II bankln
credit has been obtained without specil
: redress to any one given collateral
a one bill Is not collected others will be an
y the margin OF 20 per cent. allowed O
= all will cover all such contingencies.
h Exchange is a great problem to-da,
o The war upset the powerful and yet del
: cate machinery on which internations