The Pensacola journal. (Pensacola, Fla.) 1898-1985, 1920-01-02
AMERICA NOW
1NORLDBANKER
COMMERCIAL AND FINANCIAL
SITUATION DELICATE BUT NOT
HOPELESS AS SOME HAVE
PROGRESSED.

Now York, Jan. Three factors in
char &c. ineligible to the average
man. rise above the complexities of
the present situation, according to
old-timers in Wall-st These are:
I. Allied and other nations of the
world owe the United States approx
mateIy $4,000 o00. 900.
2 American manufacturers hest
tate, owing to peace treaty uncertain
ordel-s
g. England's virtual suspension OF
gold exports outside the British colo
MES is repulsing American trade.
Just why the British pound ster-
ling, normally worth $4S 665 in Amer
lean gold. should have declined so
much since the war ended, and what
it all means is an obscure question,
said New York financial expert.
The present situation, Sir George
Paisl's aDprehensions notwithstand-
ing, $ by means hopeless. Prophecies
Of a breakdown OF credit are not
well founded.
America, the storehouse OF the
world and now the worlds banker,
is ia the same position England was
IN after the Napoieonic and Ameri-
can civil wars. She bought the cheap
securities Of impoverished nations in a
most prodigious manner and thereby
laid the foundation for her future
wealth. We must do likewise and
do it within the next two or three
years by which time these abnormal
condi lions viii have passed.
w tn pound sterling Is per cent or
more below par England can sell to
the United States at a great advan-
tage. We can sell American goods
abroad only at a great disadvantage
because we must and the abnormal
rate Of exchange to the goods to get
into foreign markets. Premier Lloyd
George recently declared, when ster-
ling was selling at a discount of 10
per cent on goods manufactured in
England. Certainly it is helping to
Keep American goods out of that
country
The only remedy for this condition
is for the United States to buy for
eign securities and extend long time
credit for merchandise. We are in
strong economic position. The nations
of Europe must have our cotton 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 merchandise
Everyone in Wall-st knows that
IL the peace treaty had been signed in
Washington and international ext
change COMMITTEES would have been
organized long before now to stabilize
exchan sc mad bring about other neces- /
sary establishments. Never during /
the dsrkest days of the war, when I
the Germans almost at Paris, did I
British and French exchange go to /
where it is now. The British, during /
the war, by a system of credits with I
the United States, had sterling
begged to s452.
THE tension over and gold exports
curtailed there was nothing to keep
It that close to parity. Indeed, I'M |
less the United States loosens its |
purse atrings there are London finan- |
cial experts who say the pound ster-
ling VII drop as low as $3.50. That
would be a calamity. 1t would he a
two-ed ged sword injuring both Eng /
land al the United States.
Europe is like a man on the verge /
OF death due to starvation. When YOU /
find such an unfortunate you feed
aim gradually until the stomach be-
comes accustomed to digesting food. |
Vow our aim has been all along to
stuff europe with all kinds of Amer |
lean D 'oducts. We have piled up a
trade balance. according to former |
Secretary Of Commerce Redfield. ag-
gregatilg $4,000, 100000 a year. Eur
ope's financial system. like the stalv
cd human stomach, has been unable
to ass initiate it. Consequently, we
thus contribute to the Generalization
of foreign exchange and incidentally,
by initiation help to lower the Dur-
chasing power of our own dollar.
when you consider, as Mr.. Red
field points out. that $4,000, 100000 rep
resents American dollars at par and
must be paid by those who owe it in
deprecHtted currencies. making il the
eauival,nt OF 10000 600, the result |
cannot be healthful to future Ameri- |
can trade and commerce. Foreign |
buyers are going into more favora bic !
markets"