The New York herald., 1921-03-14
EXPLAINS VALUE0F
TRADE ACCEPTANCE
Dr. Holder. Banker. shows
How Foreign Commerce
Can BE Increased.
SUPPLIES READY FUNDS
Safe and Conservative Invest
ment and Great Aid to EX-
porters. He Says.

Greater publicity FOR trade accept
ances and their promotion among the
investing public as prime investments
is urged by DR.. Charles A. Holder.
president OF the Park-Union Foreign
Banking Corporation. as the most ef-
fective means of fur.hering Americas
foreign trade.
The trad acceptance, says Dr. Holder,
embraces all the prime requisites in safe
and conservative inyestments-safetv
of principal, ample income return. and
they can be purchased In any convenient
amount for definite periods Of repay
mcnt As a consequence they Should
prove popular among investors r. the4
were sufficiently informed on their mer-
it's. The increased popularity of these
instruments as investments would sup
ply the necessary funds % transact for
egn business on large scale asld
enable the manufacturers and merchants
to be supplied with cash to finance
their export operations by releasing
funds otherwise tied up in goods in
transit.
Banking corporations organized for
financing foreign trade in accordance
with the regulations OF the Federal Re-
serve Board, if properly managed. should
be and will prove to be Of inestimable
value in furthering the foreign trade Of
this country said DR.. Holder. 'To
gain their widest usefulness their scope
OF operations must naturally be under
stood by the exporters and importers
who can make use Of their services as
we'll as by banks of the interior which
may have money TO invest In bills
Eaf Ana nf on
trade the export banks create accept
aaces for which buyers must be found
IN order that they may operate success
fully. The soundness of such accept
ances may be judged from the method
of their creation. For example, the
foreign trade bank accepts a draft Of an
importer Mt ninety days sight to enable
that importer to bring coffee, hides or
some other commodity from a foreign
country Back of the acceptance stands
the credit not only of the bank, but also
the credit Of the merchant together with
the actual commodity which is being inn
ported with the proceeds arising from
the acceptance.
THE same is true where bank ac-
cepts on behalf OF an exporter. The
proceeds Of the acceptance in this case
are used to pay an American manufac-
turer for his goods while they are being
shipped TO seaboard and transported
across the ocean to their destination In
foreign country, the foreign buyer
providing funds to meet the draft at
maturity. During all this time the
manufacturer and the merchant have
been supplied with cash 20 finance the
operation. instead or having to walt
three. four. six or eight months. as they
formerly did. pending the return Of funds
to the United States from the foreign
purchaser.
when the foreign trade bank accepts
on behalf OF merchant. Il or the mer-
chant sells the acccptances to the So
called discount houses, which in turn
dispose of them to other banks, corpor-
ations or private customers.
ample reserves are required by the
regulations of the Federal Reserve
Board to protect the acceptances Of the
foreign trade banks