The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1921-07-13
TOPEKA STATE JOURNAL
Information Bureau
FREDERIC j. HAsKIN. Director.
Washington, d. @.
THE DEBILITY OF FOREIGN
TRADE.

the greatest ills to be cured or at least
improved before the world can be re-
stored to normal.
Domestic and foreign business are
so closely allied that both must be
considered together. They are SO
closely linked that much OF the bust
mess depression of which constant
complaint has been made can be
traced directly to the fact that all
foreign monies are at a discount in re-
lation to American dollars. Turning it
around, and looking at the situation
from the point of view other than
American. premium must be paid to
buy American dollars.
Experts of the government are of
the belief that the greatest evil with
(which business has to contend in this
foreign exchange situation is the fluc-
tuat1on of values of foreign monies in
relation to American gold. A pur-
chase made abroad. to be paid for in
ninety days, may find material
change in the exchange rate which
makes the purchase cost either consid-
erably more or considerable less than
was bargained for. The net result OF
this has been to encourage gambling
and speculation, buying goods with
the idea that when the time came to
pay for them, the cost in American
money would be less.
| In the present situation, the nations
whose money is depressed in value are
not the only sufferers The United
states, whose money is at a premium,
| Is hurt very badly, too. Foreign bust
ness men cannot afford to pay for
American goods on. the basis of Ameri-
can money valueS This materially
cuts down the export of American
goods, which in turn reacts on the
amount Of production, and works on
down the line so that there is an over
plus of labor, and prices and wages
are forced down. too, by the operation
of the law of economics known as
supply and demand.
Foreign nations, with their money
deprecated, look to other nations
where the money standard is not so
high to supply their needs. AS an
the market for a lot of wheat!
The United States could supply this
wheat, and so could Argentina. The
price asked, let us say, is 50 bushel
in each case. However, the money of
Argentina being at discount of about
80 per cent compared to the American
dollar, the Argentine price means that
France can get the wheat it desires
from Argentina at what would amount
in American money to $1.70. Natural
| ly, this business goes to the South
American republic.
Impractical Remedies.
Hundreds of cures for this situa-
ton have been advanced by theorists,
| but all of them are rejected by gov
eminent experts. Officials of the fed
eraI reserve board know that the age
of miracles is past, and caution against
expecting a sudden swapping back to
normal conditions thruout the world
today, tomorrow, next month. or next
year. The restoration will be gradual
and slow. Some European nations will
never again reach the point where
their standard of money will have the
value it did before the world war.
The situation can best be benefited
only when the countries of Europe
stop quarreling and fighting among
themselves and settle down to hard
work and saving. There have been
of trying to help each other and help
themselves, have apparently been bent
on cutting each others economic
threats. The parcelling out Of Europe
into many new nations has given rise
| to much of this sort OF thing. For
instance, integral parts of the old
Austro-Hungarian empire have been
prime offenders. For long time
Hungary would allow none of its
wheat to go to Austria, in retaliation
| for Austria refusing,to let its manufac-
tured goods needed by Hungary reach
I
not get the clothing and machinery
they needed. The Austrians could not
get the food they needed. The situa-
ton benefited no one, and hurt both
countries, and all other countries with
which they have to have dealings:
It has often been proposed that the
United States government take big
sponge and wipe clean the slate on
| which are chalked down the debts OF
foreign nations to the United States.
These debts are owed to US by our late
allies and the loans were necessary
for the prosecution of the war to
successful conclusion.
| Governmental experts are inclined
to look upon this suggestion with the
idea that it would do little or no good
1t would mean, cutting down the finan-
cial obligations of certain foreign ma
less the common. everyday citizen OF
those lands benefited, it would do no
good. For instance. IL forgiving the
French debt to the United States were
accomplished, there would follow a
/ lessening of the tax burden on the
French people. Unless the United
States government could dictate how
this should be done, there would be
no surety that the ameliorated taxes
would help the ordinary French citi-
1 zen, or that the value of the French
franc would be appreciated at all.
which is the only way America could
benefit from this transa Lon.
Also, it has been SAIL al-G IS prob
ably true in some instanc y, that the
limit of taxation on many foreign
countries has been reached. If this is
true, and these countries can not now
pay even the interest on their debt
to the United States-about billion
in back interest is unpaid at this time
l-wiping the slate clean of the debt
would accomplish no good at all,
, either for that nation, the United
States, or the rest of the world.
A Possible Cure.
Some of the countries partaking Of
the German reparations have sug-
gested that in exchange for their obi
cratinns tn the limited States that the