The Lexington progress. (Lexington, Tenn.) 1884-current, 1921-12-09
coo, and Of Italy to $4,000 600 600.
Almost Kills Foreign Trade


But rapid fall of foreign exchanges
since the middle of 1919 has almost
choked to death American f0reign
trade. Unsound currency initiation
alone, and especially when supple
mented by adverse foreign trade bal
ances, inevitably drives down foreign
exchanges. The exchange of the ma
tions in Central Europe and in the
territory between the Baltic and the
Black seas, has now completely col
lapsed. Both the authorizations and
the decline in froeign exchanges have
cut American foreign trade to pieces
and sad to say there has been no ma
terial improvement in the exchange
situation during 1921. Many ma
tions of Europe being without gold,
unable to produce through lack of
foodstuffs and raw materials, denied
credit, and facing an impossible ex-
change situation, have entirely
ceased to purchase from America.
| Compared with the dollar ex-
change, that of England, France Bel
GUM, Italy, Spain, Holland, Greece,
Switzerland and Scandinavia is at a
heavy discount, while that of Central
and Eastern Europe has fallen to a
nominal value.
Davidson's Proposed Fund. .. -.
In vain did Henry P. Davidson and
other great financiers, as late as the
early Spring of 1920, fairly shout
that "Tte crisis is so acute that the
situation does not admit of delay, ex-
cept with the possibility of conse-
quences one hardly dares contem-
plate" Mr.. Davidson and many 9TH
err economists and business men were
then urging the creation of revolv-
ing fund Of $500, 000,0 900 by this gov
ernment-an amount insignificant
compared with the nations later pan
ie loss of $4,000 ,000, 000-to be plac-
ed in the hands of strong commits
sion of our ablest business men to be
utilized as temporary credits to the
helpless states of Europe, but in a
safe and feasible manner which Mr.
Davidson clearly outlined. The
amount he knew would enable those
countries to come back to normal.
The plea was received with deaf
Tears by the Republican leaders bent
on every sort of pandemonium, ii it
was necessary to enable them later to
carry the national election of 1920.
Unstable European governments had
no financial standing abroad and but
| little at home. Their bonds sold eth
err at extortionate interest rates, or
unconscionable discounts. Lacking
foreign credits, many Of these govern
ments sold their paper money abroad
in vast quantities and at great dis
counts. They were powerless to give
necessary aid to their domestic finan-
cial and commercial interests, or to
establish sound monetary systems.
By the beginning of 1920 the increas-
ing obstacles had become too great,
the load too heavy, for these nations
to bear. Europe had become deathly
sick.
Republican politicians meanwhile
were storming at those countries to
go to work, knowing that they had
neither food nor materials; they were
raving at them to pay the debt and
interest due US, knowing that they
were then starving and helpless. The
people of IL or Is states in Europe,
already referred to as having been
left almost unfeebled by the war,
could hold out no longer for the fore
part Of 1920.
The Collapse.
Amidst ever-increasing disease,
starvation, poverty, unemployment,
riots and new wars, the financial,
commercial and industrial collapse
came to this part of Europe early in
1920 The industrial power of Eu-
rope had broken down. This meant
that her consuming power was gone
fact of which the American labor
err, capitalist, miner, farmer, sheep
herder, and ranchman were then ut
terly Indifferent, but of which each
was destined soon to take sharp no.
tice. The first effect observed, was
sudden halt in the commerce of Eu-
rope. Her trade structure had col
lapsed. The hundreds of millions of
consumers in those PROSTATE coun-
tries, becoming entirely impoverished,
had abruptly stopped buying. Manu-
facturers and producers in England,
France, Belgium and the nutural COM
mercial countries hereby, could no
longer sell their products. The re-
suit was then in turn, they almost
suddenly either ceased or greatly re-
duced their purchase of billions of
foods and raw materials from Amer
lea Prices rapidly fell in England,
our largest customer, and this slump
soon spread to neighboring nations,
which were still functioning economic
cally.
The United States, asa direct eff
feet, later experienced almost q ver-
tical fall in prices of cotton, copper,
live stock, cereals, meat products and
many lines of manufacturers, of 30 to
so per cent, and hence correspond
| ing decrease in the internal purchas-
ing power of the people. Nor could
South America escape. Brazil could
no longer sell her coffee and rubber,
nor Argentina her grains, wool, hides
and meats, nor Chile her nitrates nor
Cuba her sugar. The result in South
America was a~quick stagnation and
slump in prices at home and sudden
loss of the purchasing power of her
people abroad. From the sore spot in
Europe already described collapse of
prices and of trade swept around the
earth like conflagation.
The remainder of the story is now
known to everyone everywhere. In
America it is seen in our idle ships,
idle factories, idle mines and idle
men. The failure to ratify the treaty