The Manchester journal. [volume] (Manchester, Vt.) 1861-current, 1920-12-09

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Civil War led Congress in i95s-64 d
pass law creating the national banl
system and greenback currency sub
stantillly as we know the same wher
under the Wilson administration tn,
federal reserve hank system was es
tabhshei, which still further co-relat.
ed existing national banks As a re.
suit Of the naturalization Of currency
in America the United States has
gained financial stability which with
the backing Of our unlimited resources
las msde our credit superior TO tina,
Of any other nation in the world
Tho credit Of most nations follow
ing the World War Is entirely differ
ct f.om that proceeding this mighty
struggle Previous to the war the
paper money Of the world was placed
by statisticians at $1,000, 900 900 At
the time Of the armistice in 1918 it
was $4,000, 900. 900. In April 1920,
the paper currency Of the world had
reached the shrinking total ofS56 ,000,-
100000. Meanwhile the total debts
Of the nations had jumped from s40,-
900 ,000, 900 in 1918 to S256, 900 ,000, 900
in 1920. World credits, still another
form Of international initiation, had al
so increased TO an enormous degree.
As result each nation hesitates to
draw on its own reserve to give credit
to its neighbor
Still another factor in the estab-
lishrg Of exchange relative TO money
values between two nations is the bal
ance Of trade. If you have sold your
neighbor all you think he can pay
for you do not readily sell him more,
without some inducement. Let US
take Canada as an illustration. Fig
ures just released to the newspapers
by the National City Bank of New
York show that in the first nine
months Of the present calendar year
we scld TO Canada products to the a.
mount cf S754,536,265 while Canada
sent US goods to an aggregate Of only
SAT-, ,631 ,s24. That left Canada large
ly in debt to US
The condition Of industry and finan-
ces in Canada, the present balance Of
trade, the outlook for future balances,
lower standards of values as a rule,
financial conditions in the Dominion,
the place held by Canadian money in
other world marts and the difficulty Of
excl nging credits are among the
chief influences that combine to make
Canadian money worth less than that
of America. Revolutions in Russia and
Mexico have helped depreciate the cur
rency Of those countries, while nation
al reputation Of the Cars war loans
by Lenine has added to Russia's cur
rency uncertainty
Even Great Britain exacts an unfav-
orable rate Of exchage from all of its
colonies save Canada at the present
time, showing how the interruption Of
normal trade relations has helped dis
locate the entire finances Of the world. |
We financed the chief powers Of the
European war. They still owe US.
United States to-day is at what is
termed the peak of exchange Every
other nation under the sun must pay
a premium to obtain a remittance Of
to the United States. One of
the factors tending to prevent the
more RAPID growth Of our export trade
IS the fact that this adverse exchange
rate must be added to every purchase
Df American products made in the
United States by foreign buyer
Fe, example, trade between the
United States and Australia has been
Of late by the inability
of Australian banks to provide funds
N eiti-er this country or London
against which TO draw to pay for
American products. The rate Of Aus
tralian exchange is consequently un-
AH1-A hhkH III Vihti WOEucs nus
-ralian money is not worth so much as
usual in American money.
We can thus understand why one Of
he measures Of relief proposed By
he America Farm Bureau Federation
S a drive TO induce the United States
government to extend a credit Of
y ,000, 100000 TO Germany in order TO
'aciiit Il the selling Of American farm
'roductJ so greatly needed by the
Germans at this time. II follows that
me Of the chief agencies in the read
ustmert Of world trade will be the
-esto...tion Of the manifold conditions
hat count for normal rates Of ex-
hange between different countries
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