The Washington herald., 1921-07-13
Says Hard Work and Low
Costs Will Meet
Competition.

4
| Government, through reduction Of
armament and through reduction of
! shipping board losses and by the
!, settlement by the Government Of
the outstanding claims of our rail-
WAYS. 1t means we must cease try
ing to drive American ship owners
off the sea with tax-paid shipping
losses.
I'VE must carefully determine
what particular trade routes we will
maintain in development of our
commerce over a period of years,
and let our merchants know them.
II means the Government must pro-
vide such information to commerce
and industry, from both at home
and abroad. as will enlarge its
Judgment. 1t means We must ex-
tend scientific research into the
problems of waste. the perfection of
processes, the simplification of
methods that are beyond the abil-
ity of one manufacturer acting alone,
and we must cooperate with indus
try to perfect these things. I am
confident we can hold our markets.
our higher standards of living and
of wage II we will all put our
| backs into it.
The shift In Credits.
Overriding all these questions of
production and markets is one of
credits. Our whole financial rela-
tion TO the rest of the world has
greatly shifted. From a nation
owing some $4,000. .0o0, 900 to the
rest of the world for moneys bor-
rowed. the war has reversed our
position so that the world. princi-
pally Europe. owes US today from
| $4,000. .000. 900 to $4,000, 100000, of
which about $4,000 900 is due our
government. Before the war we had
to export a surplus over our i'm
ports. and beyond this had to con-
tribute through remittances of i'm
migrants. tourists, shipping. etc,
great sums to pay interest upon our
debts.
THE reason for the piling up of
this vast debt is. of course, that we
have not only loaned money to the
Allies but have also since the war
vastly increased the surplus of our
exports, and the movement still
continued to accumulate in our IA
vor. Unless we would cease a large
part of our war increased produc-
tiyity with all the resulting unem-
ployment and losses of such a ces-
sation. We must continue for some
time to export in excess of our inn
ports. Eventually the increase in
our imports of tropical supplies,
minerals and commodities that we
do not ourselves producer. together
with the spending of tourists and
the investment of surplus capital
abroad, etc. should overtake our
export balance and establish a
proper equilibrium. In the mean
time. if we would maintain our eco
nomic position, we must continue to
give ,red1ts to buyers of our goods
and il we should demand interest or
principal on our established loans
we would nullify any benefits of
such credits. / may repeat that IL
today We stop giving more credits
and demand payment of interest on
debts due our Government our ex-
ports will further decline, and the
decline will find its Interpretation
in more unemployment among our
own people and more displacement
OF our industries.
Can Carry Credits.
The natural effect of our con-
tfnued surplus of exports (although
We have as yet made no demand for
payment of interest on the govern
ment debD, is that our dollar is at
premium over even the most sta
Bile currencies in the world. Thus
the cost of producing our commodi-
Ties is higher than in any other
country. This does not so material
ly affect the export of those com
modities of which we hold a final
SUPPLY such as the food supplies
ana our raw materials, or those ar
tlcles in the manufacture of which
we have unique ability. 1t does.
however. partly blockade our ex-
ports of manufactured goods in
which We directly compete with Eu-
rope. Exchange itself is not the
cause but the effect 1t bears the
| same relation to trade that the
barometer does to the weather. II
Is but an indication of the move
ment of commodities and credit
Our high barometer means we need
more credits outward or alternative
we must send less goods out or
take more goods in.
Il may say in passing that am
confident that our debtors can
eventually carry the debt due to us
with ease. provided they have the
time necessary for the healing of
their economic wounds, that they
succeed in the reorganization of
their fiscal policies so as to balance
their government expenditure, and
above all. that they secure disarma-
ment and continued peace. Before
the, war the world carried a debt to
single European nation of twice
the size of our foreign claims with
| out knowing 1t, and with the re-
newed growth of the worlds conn.,
merce and wealth our debt will he
no burden. Our problem is the diff
ficulties of our debtors during the
few years until these blessings are
attained.
| The Exchange Question.
"All of my rightful and optimistic
view that we will maintain the
| flow of our goods is based upon the
| assumption that we can wisely man.
age these credit problems. There
| is a general agreement, that we
must extend credit If we would
market our surplus and upbuild our
customers during these next few