New Britain herald., 1919-12-23
WHY FOREIGN MONEY
 IS GOING DOWNWARD
U. s. Is Big Creditor and Hesi-
 tateS to Give Loans

New York, Dec. 23-Three fac tors in the demoralization of foreign exchange, ineligible to the average man. rise above the complexities of the present situation, according to old-timers in Wall street.
 These are: 1l-Allied and other nations of the world owe the United States approximately s15,OOO, O,O0O.OOO:
 2-Amcrican manufa cturers hesi- tate, owing to peace treaty uncer- tainty, to accept big advance foreign orders;
 3-England's virtual suspension of gold exports outside the British col onies is reDulsing American trade.
 Just why the British pound sterl- ing, normally worth $4.S665 in Am erican gold should have declined so much since the war ended. and what it all means is an obscure question: said d New York financial expert. ''1he present situa tion. Sir George Paish's apprehensions notWithstand- ing, is by no means hopeless. Pro- phecies of a breakdown of credit are not well founded.
 America, the storeth oslse of the world and now the worlds banker, is in the same position England was in after the Napoleonic and American Civil wars. She bought the cheap securities of impoverished nations in a most prodigious manner and there by laid the foundation for her fu- ture wealth. We must do likewise and do it within the next two or three years by which time these abnormal conditions will have passed.
 'With pound sterling 25 per cent. or more below par England can sell to the United States at a great ad- vantage. We can sell American goods abroad only at a great disad- vantage because we must add the ab- normal rate of exchange to the goods to get into foreign markets. Premier Lloyd George recently de- clared, when sterling was selling at a discount of 15 per cent, that the discount really represented a 'protec- tive tariff of 15 per cent on goods manufactured in England. Certainly it is helping to keep American goods out of that country.
 The only remedy for this condi- tion is for the United States to buy foreign securities and extend long time credit for merchandise. We are
 
 nations of Europe must have our cot ton and wheat and, since they are so heavily indebted to us and we must extend them many more millions to put them on their feet what is the difference whether we buy their bonds or send them our mcrchandiseo
 Everyone in Wall Street knows that if the peace treaty had been signed in Washington an international exchange mittee would have been organized long before now to stabilize exchange and bring about other nec- . CssarN rcadjustm entS. Never during the darkest days of the war. when the Ctermans were almost at Paris did British and French exchange go to where it is now. The British, dur with tn" United States. had sterling begged to $4.52.
 ''fla tension over and gold exports curtailcd there vas nothing to keep it that close to parity. Indeed. unless the United States loosens it's purse strings there are London financial eX- perts who say the pound sterling will drop as low at $2.50. That would be a calamity. It would be ;a two-e sword injuring both England and the United States.
 Europe is like man on the verge of death due to starvation. When you 1inG such an unfortunate YOU feed him gradually until the stomach becomes ;'ccuston ed to ,ligesting food. Now our aim has been all