Omaha daily bee., 1920-02-10
Goods, Gold and Credit
From the New York Times.


The news in the foreign trade figures for
1919, just pubished,>is not in the totals, but IN
the details II wa s. already known that our ex-
ports and imports were in the relation of ap-
proximately 5 to 4, leaving the world owing
us four billions. There is no precedent for
the dslocation of the foreign exchanges
throughout the world. But trade does not stop,
either at home or abroad For the last week
of January bank clearings were 22 per cent
above 1919, and the increase is greater outside
of New York than in the monetary center. For
sthe third week in January the director general
reports that the, carloads received at the north
Atlantic ports for export were 2o4 per cent
over 1919.
There is sense in which such figures are
pitful,' for they bespeak necessities which must
be satisfied at whatever sacrifices of anything
which can meet the demand for Exchange
that is, for anything which will pass in this
market, where alone world wants can be salts
fed. When hunger and disease>h done their
perfect work abroad there will be a decrease in
the demand for our breadstuffs of which we ex-
ported last year just short of a billion dollars
worth-a record, Of course. OF cotton, the
worlds cheapest clothing fabric we exported
over billion dollars worth, for the first time.
The total of our agricultural exports is just
about equal to what the world owes US on bal
ance OF merchandise movement. Our impatence
at the high cost of our own living might be
tempered in some degree by the thought of the
greater necessities which we have relieved, at
an apparent profit such as we never dreamed
OF, and yet with murmurings throughout the
land at our hardships when we are importing
diamonds and buying diamond company shares
at the highest known prices and in largest
quantities, are eating more sugar than in all
history, spending hundreds of millions a year
on moving picture shows, and smoking cignrets
in totals comparable only to the figures Of the
inflated currencies which measures the worlds
Jrad 70 and, Soc
Secretary Glass remedy is that we should
reduce our sales abroad until foreign buyers
balance their budgets in token of their dome este
solvency. That was less censorious than it
sounds, for the secretary suggests govern
ment credit to enlarge our exports of neces-
saries of life which should suffice at least to
take the keenest edge off famine. Those tempted
to think the secretary inhumane may we'll be
outspoken regarding congress proposal to allow
but one-third of the secretary's credit, not gift
1t is necessary to speak. with more respect of
the proposal of the Federal Reserve to meet
the emergency by contraction of finance rather
than by enlargement of commercial credits!
The Federal Reserve is under the necessity Of
maintaining our bank reserves. They have been
invaded in the manner indicated by yesterdays
which took in 1919 $56OOOOO0 for Argentina
alone. There is more threat of construction of
trade in loss of gold, which restricts credits
tenfold and more, than in the reduction of
merchandise movement by defaton.
In contrast may be remarked the foreign
method, whose results may be traced in the
details Of our foreign trade. Holland lent Ger
many 200,000,000 gulden credits, to be expended
in food stuffs and materials and repaid in foods.
Looking at our trade with Holland, We find
our exports increased from $1l000000 in 1918
to $255,0000O0 in 1919. On the other side of
the trade Holland bought from us, with nine
fold increase of its exports, our imports. The
same influence may be traced through our
trade with neutrals generally. Expansion is
the characteristic of that movement Expansion
also is the note of the British credit allowed to
Austria of million crowns for foods and ma
terials The materials, perhaps, but not probably,
may be British, the foods must come consider
ably from here. Canada can afford in some
way to lend Belgium as much as ourselves in
our latest loan AS the greatest of exporters
"a Niagara of imports" and there are those whb'
would be glad to see the exports checked as
we'll as the imports. If they are checked they
will be checked together. We increased our
imports from Europe from $318,000000 IN 1918
to $750,000,0O0 in 1919. The proportion is
which the imports are due. In contrast we are
exporting gold to Argentina, with which we are
contracting our trade. That is the reverse
of the condition across the Atlantic. We are
selling to Europe SO much that they cannot
pay. We are buying from Argentina so much
tiidt VIC Ausl pay ia Soiu. uC tWo SdoCS
must call for opposite remedies. If we ought
to contract our trade with Europe, we ought
to expand it with any country which now has
power to take our gold.
The only other way to- keep trade moving
is by boldness. with credits discriminatory az
lowed on policy of liquidating debts for goods
with goods Finance credits cannot be en-
larged and should not be contracted too sud
denly or extremely. But commercial credits
on Gquidated transactions tend both to stimula-
~. .Eof
which ever afflicted the world, and of which
money troubles are not chief.