Rock Island Argus. (Rock Island, Ill.) 1893-1920, 1919-10-09
NEED EXCHANGE
RATE ADJUSTED
ITO SAVE TRADE
Business With Rest of World De-
ponds Rearranging Cornerstone
Of Foreign Situation.
By FREDERIC J. HAskTN.


Washington. y. c., Oct. 9.-The
treasury department is Just now
wondering how much the man or
the street knows about finance. how
many OF him appreciate SO simple a
thing as the province of a bank,
know what a bond really is, can
tell what is meant by exchange
This last term. exchange, is now
causing particular concern. EX-
change makes il necessary that the
nations of Europe should pay a fee
for the privilege Of buying goods in
the United States. The most fsv-
orally situated of these nations
pay . cents in exchange that they
may spend a dollar here. but the
less favored pay as much as 50
cents for that privilege.
The treasury department, which
does its worrying through the
kpGeral reserve board, knows that
foreign peoples are going 10 pay
this tribute only so long as they
have to. and that presently ships
will stop sailing from Philadelphia
10 Stockholm. because OF exchange
and that factories in Youngstown
may be shutting down because Of
the same taking of tribute
This matter Of exchange. in fact,
is the very cornerstone of the for
eign trade situation Our business
with all the world depends on its
TeadjustmCnt Il is now badly out
OF order.
To understand exchange We must
remember that America was thrust
by great war into a position of
trade dominance. was taken to the
mountain top and shown the maTts
y OF the world waiting TO be taken.
- -Four years devoted intensiyely 20
rstioning the god of war had built
for us an industrial machine suCn
as no nation ever before possessed.
The machinists We had trained re
fused TO go back to driving deliv-
cry wagons Our merchant feet
was at the dock with steam up We
must sell, sell, sell,
This much America saw To
this program she instinctiyely
pledged herself We would sell our
goods the world around Wherever
traveller puts his foot on a dock
there he should see a box labeled.
Made in L. S. A
This. TO the average American. Is
the whole of the trade program.
Even to the manufacturer. the ex-
porter. there is but the one view.
that of establishing markets for
American goods. The idea of buy
ing abroad of importing extensive
lv into the United States. is unpOp-
uiar. The United States. it is held
should be self supporting. Imports
should be discouraged. The i'm
porter is an unpatrioticf1 unpopular
individual. His business is stuper-
dous as d matter of fact. but he is
almost surreptitious about it.
The big fact not vet clearly per
ceived is that. without an import
trade. we can have no permanent
export trade We will prosper for
4 day and then find our goods pill
ing on our shelves. This thing
called exchange will get us.
Is Actual Exchange.
And since We are a democracy.
since national action depends upon
public understanding of the need
YOU must get this understanding or
fail Mr. American You must Come
10 understand that trade between
two countries is actual exchange of
goods If 1t is to survive. A mere
selling of goods by one country TO
another is the blowing of a com
mercial bubble which can exist for
but a moment. You have got to
buy as well as sell. Otherwise ex-
change will make it impossible for
you to sell
Before the war We sold about
S2,0O0.0O0.O0O worth of goods
abroad and bought million and a
half. Out Of the half billion TO our
credit We paid the transportation
charge to foreign ships Then We
paid interest on American secur-
files that were held abroad. Finally
We added to this the money that
American tourists spent each year
In Europe These items brought
the outlay up to the income. There
was trade in its broadcast sense be
Seen the United States and for
eNGn countries. Il balanced. The
situation was satisfactory.
Then the war came on. 1t re-
suited in Europe buying much
more heavily from. the United
States than form erly. and selling
less to US. It cut off such Amer
lean money from Europe as that
derived from the tourist trade. Eu-
rope did all the buying and We did
all the selling. The balance be-
came always stronger and stronger
in our favor Our stupendous loans
I'm Europe brought about temper
airy readjustment Of balances, but
accumulated them in the long run,
because interest has got to be paid
on those loans. Europe must al
ways find means with which to- pay
the United States She must every
day aggravate the exchange situa-
ton.
She will do this, will pay high
rate of exchange. when there is no
other way. But the world Is getting
back toward normal Other nations
will soon have materials to sell.