Atlanta tri-weekly journal. [volume] (Atlanta, Ga.) 1920-19??, 1921-07-14

xxTASHTNGTON, D. c., July 8. - Disar-
wv rangement of foreign exchange
W rates as an aftermath of the war is
admitted by financial authorities to be one
of the greatest ills to be cured or at least i'm
proved before the world can be restored, to
normal
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
constant complaint has been made can be
traced directly to the fact that all foreign
moneys are at discount in relation to
American dollars. Turning it around, and
looking at the situation from the point OF
view other than American, premium must
be paid to buy American dollars.
Experts of the government are Of the
belief that the greatest evil With which bust
ness has to contend in this foreign exchange
situation is the fluctuatlon of values OF Tor
| eign moneys in relation to American gold. A
purchase made abroad, to be paid for in
| ninety days, may find a material change in
| the exchange rate which males the pur-
chase cost either considerably more or con-
siderably less than was bargained for. The
net result of this has been to encourage
gambling and speculation, buying goods
with the idea that when the time came to
pay for them, the cost in American money
| would be less.
| In the present situation, the nations whose
money is depressed in value are not the only
|
is at premium, is hurt very badly, too.
| Foreign business men cannot afford to pay
| for American goods on the basis OF Amerl-
can money values. This materially cuts
down the export of American goods, which
in turn reacts on the amount of production,
and work. on down the line SO that there
| is an overplus of labor, and prices and wages
are forced down, too, by the operation of the
| law of economics known as supply and de-
mand.
Foreign nations, with their money deprI-
ciated, 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 lot OF wheat.
The United States could supply this wheat,
| and so could Argentina. The price asked,
| let us say, is So bushel in each case. How
ever, the money of Argentina being at a dis
count of about 80 per cent compared to the
American dollar, the Argentine price means
| that France can get the wheat it desires
| from Argentina at what would amount IN
American money % $1.70. Naturally, this
| business goes to the South American re-
public.
Impractical Remedies
| Hundreds of cures for this situation
| have been advanced by theorists, but all or
| them are rejected by government experts.
| Officials of the federal reserve board know
| that the age of miracles is past, and caution
against expecting sudden swapping back
| to normal conditions throughout the world
today, tomorrow, next month, or next year.
The restoration will be gradual and slow.
Some European nations 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 benefited only
when the countries of Europe stop quarrel
ing and fghtino among themselves and set
tie down to hard work and saving There
| have been cases where the nations there in
| stead of trying to help each other and help
! themselves, have apparently been bent on
| cutting each others economic threats. The
parceling out of Europe into many new ma
tions has given rise to much of this sort OF
thing. For instance, integral parts of the
old Austro-Hung arian empire have been
prime offenders. For a long time Hungary
would allow none of it's wheat to go to Aus
tria, in retaliation for Austria refusing to
let it's manufactured goods needed by Hun
gary reach that country. The Hungarians
could not get the clothing and machinery
they needed. The Austrians could not get
the food they needed. The situation benefit
ed no one, and hurt both countries, and all
other countries with which they have to
have dealings
1t has often been proposed that the United
States government take a big sponge and
wipe clean the slate on which are chalked
down the debts of foreign nations to the
United States. These debts are owed to
us by our late allies, AMI the loans were
necessary for / e prosecution of the war to
| a successful conclusion.
| Governmental experts are inclined to look
upon this suggestion with the idea that it
| would do little or no good 1t would mean
| cutting down the financial obligations OF
| certain foreign nations but these experts say
that unless the common, every day citizen of
those la1 DIS benefited it would no good. For
| instance, l. forgiving the French debt to the
| United States were accomplished, there
| would follow lessening of the tax burden on