The Rock Island Argus and daily union. (Rock Island, Ill.) 1920-1923, 1921-07-12

Washington, d. C., July LIDS
arrangement of foreign exchange
rates as an aftermath OF the war
Is admitted by financial authorities
tc be one of the greatest ills TO be
cured or at least improved before
the world can be restored to nor
NAL.
Domestic and foreign business
are SO closely allied that both must
be considered together. They are
so closely linked that much of the
business depression of which con-
slant complaint has been made can
be traced directly to the fact that
all foreign moneys are at a DIS
count in relation to American dol
lars. Turning it around, and look
ing at the situation from the point
of view other than American, a
premium must be paid to buy Amer
lean dollars.
Experts of the government are of
the belief that the greatest evil with
which business has to contend n
this foreign exchange situation is
the tfuctuation of values of foreign
monies in relation to American
gold. A purchase made abroad, to
be paid for in 80 days, may find a
material change in the exchange
rate which makes the purchase
cost either considerably more Or
considerably less than was bar
gained for. The net result of this
has been to encourage gambling
ana speculation. buying goods with
the idea that when the time came
10 pay for them, the cost in Amer
lean money would be less.
In the present situation, the ma
tons whose money is depressed IN
value are not the only sufferers.
The United States, whose money
is at premium, is hurt very bad
ly, too. Foreign business men can
not afford to pay for American
goods on the basis of American
money values. This materially cuts
down the export of American goods.
which in turn reacts on the amount
! or 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 opera
ton 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 illustration, suppose that France
! is in 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 81
bushel in each case However,
the money of Argentina being at a
discount of about 80 per cent com
pared to the American dollar, the
Argentine price means that France
can get the wheat it desires from
Argentina at what would amour.
III American money to $40. Nat
urally, this business goes to the
South American republic.
Impractical Remedies.
Hundreds OF cures" for this stu
alton have been advanced by the
orists, but all of them are rejected
! by government experts. Officials
of the Federal Reserve board know
! that the age of miracles is past,
and caution against expecting a
{ sudden swapping back to normal
conditions throughout the world to-
day, tomorrow, next month or next
year. The restoration will be grad
ual and slow Some European ma
lions 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 benefit
| ed only when the countries of
/ Europe stop quarreling and fight
| ing among themselves and settle
down to hard work and saving
There have been cases where the
nations there instead of trying to
help each other and help them
selves, have apparently been bent
on cutting each others economic
throats. The parceling out of
Europe into many new nations has
given rise to much of this sort of
I thing. For instance, integral parts
Of the old Austro-Hungary empire
have been prime offenders. For a