The New York herald., 1921-02-07
Foreign Trade Improves.
Gold Once More Becoming the Worlds
Standard i'm Fixing Prices.


To THE NEW YORK HERALD: 1 do not
know how you feel about the perma-
nency and solidity Nof the better feeling
which seems to pervade the whole busi-
ness community, but 1t would seem. In
the light of the records of our foreign
trade In November and December, as IL
there have been better results from
American ingenuity and resourcefulness
In export than the business community
expected. Considering these and the
better exchange situation, does 1t not
look as IL the difficulties of doing for
eign business had been overstressed and
that there are offsetting factors that
have been overlooked?
In the bulletin of the First Federal
Foreign Banking Association, which l
enclose, you will find some figures OF
trade in November which are surprising.
December has another surprise. showing
upon analysis that there were increases
of over S100,000,000 in manufactured
exports In that month, as compared with
the December of year before.
1t would seem a matter OF service and
of benefit to manufacturers who export
to emphasize the more encouraging fea-
lures of the present situation. and espe-
cially TO call attention to the fact that
the international price situation is get
ting upon a gold basis. that is. because
of the fiuctuNting character of many
moneys In the world \the business COM
munities everywhere are figuring the
value of goods In gold and adjusting
the prices they quote In any local cur
rency 70 this gold price. In other words,
while the majority Of the nations of the
world are on a fluctuating currency
basis as far as settlements are con-
cerned, and do not even permit use of
gold In effecting international exchanges.
gold is the money Of the world as a
standard Of prices.
This being SO, the high international
value OF the dollar in exchange with
other moneys is really not as great a
handicap to our trade on a competitive
basis as many discouraged exporters
feel. with prices tending to be upon
gold basis. an importer In neutral
market has to pay out no more Of his
own money TO get II via the medium OF
a few high priced dollars than via the
medium OF many cheap units OF some
inflated currency, and his bargain is on
n more stable basis because no is deal
ing In a stable currency.
Far Eastern exchange is normally on
tho fuctuating basis Of the local silver
moneys. A trader has two changeable
elements In Bargain that involves
time, the element Of price Of the goods
and the element OF the price OF silver.
To-day the greater part Of the world Is
trading on the same basis Of double
nuctuatIon possibilities because Of the
instability OF the moneys. except where
dollars are used as the medium.
Our exporters ought to be advised to
use from now on the sales argument
that dealing in dollar goods cuts out an
element of uncertainty. and that, to the
extent that n recovery of the value OF
European moneys Is concerned, custom
ers in importing countries face a Ia
billty in committing themselves to trans
actions for future settlement In moneys
that may cost them an increasing
amount in their own moneys.
Although the present exchange situa-
.tion still holds difficulties particularly
affecting certain aspects Of commercial
credit. IL would seem as II American
exporters would be at distinct advan-