Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1920-02-09


EUROPEAN MONEY AND AMERICAN GOODS.
OF the effect OF falling exchange an
eastern financial writer, foreseeing no
immediate rise in exchange value OF
European money says that relief can
come only either by complete cessa-
ton OF purchase by Europe over here.
enormous purchases OF European
goods by us or extension Of long time
credits in vast amounts by this coun-
try.
That long credits in vast amounts
are not likely 10 be granted seems ev-
ident. Conditions over there are not
such as to make such extensions in
vast amounts a reasonably safe prop
osition.
About the only way for Europe to
get goods elsewhere is to make some
thing to sell and sell it. That is the
principle at the bottom Of all trade
Exchange is simply barter made cas-
Ter. Credits for vast amounts mean
that the security is sufficient or that
the character OF those asking credit
and the conditions upon which it is
asked justify the credit requested. In
the final analysis barter, exchange
of one kind OF wealth for another is
the basis of traffic.
\ manufacturer writing in Com
merce and Finance relates the plan he
and his associates adopted TO get the
business" He says:
At the present time the writer is
endeavoring to negotiate the sale of a
quantity of motor trucks to German
buyers. \ raider from New Zealand is
now enroute to Germany to purchase
for his home market d quantity OF
dyes, estimated at 100000 in terms
of our money. He is going TO under
take to sell 500, 900 worth Of motor
trucks TO Germany. taking dyes is ex-
change. The trader from New Yea
land IS interested in exporting wool
and wooden goods from his own coun-
try. He is endeavoring to place $780,
600 worth of wooden goods in this
country. By assisting him in this
transaction, American made motor
trucks will be sent to Germany; these
trucks will be paid for In German
dyes, which will be sent to New Yea
land; these dyes will be traded in in
New Zealand for WOODEN goods which
will be sent to this country, and when
sold in this country, the proceeds will
be used to pay for the American mot
or tducks. This transaction will be
handled without the use of money,
The depreciation of the German mark
and the English pound sterling will
not affect the trading in any way. 1t
simylp amounts to the use Of print
tive barter.
There will be limit to the amount
of business that can be conducted in
this way"
This writer says it is generally con-
coded that this exchange situation
will continue for many years. unless
corrective measures are supplied by
this country, and that English fl
nanciers do not expect the pound
sterling to rise above $3.50 within the
next ten years. He sees in this depre-
station now existing in most Of the
moneys of Europe, if it continues, a
real danger ahead for this country.
We are continuing to advance wages,
and in order to pay the increase in
wages we add on to the price Of all
commodities. There is an initiation of
all values in this country, and this In
flation, added to the unfavorable ex-
change rates, is a serious menace to
our foreign trade. This may not show
it's effect for year or two, but with
the rapid recovery of these nations
which have been engaged in the war,
we will find them real factors IN COM
DellIIOII lOI Tie " VI III . MAJ hCtS IL
the exchange rate continues favorable
to their exporters, we can look for a
rapid curtailment Of our overseas
trade.
The question Is, whether our manu-
featuring facilities greatly increased
under war pressure, will be able to
produce more than our own demand
will take care of; that Is, will be far
more than enough for our own needs
and the reduced volume OF foreign
will slow up, factories close down.
and a period of hard times ensue,
This writer thinks 1t possible that a
mild panic may result, which will
serve to deflate values in this coun-
| try. and with the reduction in COM
modify values, there will be reduc-
| ton in wages, and then we will get
back to pre-war conditions and be in
better position to compete with other
nations.
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