The Washington herald., 1921-03-01

SOUTHERN CONGRESS HEAD
TALKS OF FOREIGN TRADE.
Extension of the foreign trade of
the United States is one of the
greatest problems confronting this
country today, Thomas r. Preston,
OF Chattanooga, president OF the
southern Commercial Congress. said
upon his arrival in Washington
yesterday for the twelfth annual
convention of the congress, WHICH
opens here today.
Preston, who is registered at the
washington. is president of the
Hamilton National Bank and the
hamilton Trust and Savings Bank,
both of Chattanooga. Both of his
panks are interested in the recent
iy-organized Federal Foreign Bank
ing Corporation, of New Orleans,
which, with a capital stock of $10.-
100000, has undertaken to assist
American farmers in marketing
their products abroad.
NEW OUTLETS NEEDED
FOR SURPLUS PRODUCE.
The production OF the United
states now exceeds domestic re-
quirements by 80 per cent" Preston
pointed out. 'and the continued
prosperity of the country depends
upon our finding an outlet for these
surplus commodities. Our money
is now at a premium throughout
the world and this premium is so
great as to almost prohibit foreign
buyers from purchasing our ex-
portable materials
Before the war Europeans were
heavy purchasers of American Sc
curities. but upon the outbreak of
the European war in 1914 approxi-
mately s4,000,O0O, 900 in American
securities were thrown back on this
country. The Europeans needed the
money and they were forced to con-
vert these securities into cash. The
securities included stock in Uniteo
states Steel. Standard Oil, railroad
companies and other American cor
porations.
our government has lent $40, ,oOO,-
ooo.ooO to European governments
"hile at least 100000, 900 more
mas been advanced from private
sources on this side of the water
AMERICANS BRING END
TO SECURITIES MARKET.
Before the war Americans in
vested in European securities in
Angio-French bonds. City of Paris
bonds and Belgian bonds. But now
Americans are not buying foreign
securities" said Preston.
Another important feature is the
great change in international com
merce. We are now CARRYING so per
cent of our foreign commerce. in our
own vessels against Is per cent five
years ago.
trlouted toward the creation of an
invisible balance of trade thar will
run over $1,000, 100000 a year when
the European nations start paying
interest on their loans. 1t NAV run
as high as $500. 900, 900 annually.
NEEDS TO RESTORE
NORMAL EXCHANGE.
This country has gone from a
debtor to creditor nation as every
one knows. The American dollar
commands a premium in any part
of the world. Our foreign trade
hinges very largely upon the restor-
alton OF foreign exchange to nor
malcy."
Investment in foreign securities
by the American people would facil-
1tate the readjustment of this trade
balance, Preston declares There
are many sound foreign securities
in which the American may invest
with perfect safety, he pointed out.
Europeans were heavy, investors in
our securities before the war, when
they had money.
WOULD START WHEELS
OF INDUSTRY TURNING.
This policy would have a tend
ency toward setting in motion the
wheels of industry and would help
bring back normal conditions
throughout the world" Preston said.
European mills are now lying idle
for want of American cotton and
other products"
A good beginning in the opinion
of Preston would be the investment
by American foreign banking cor
porations in European securities
for a short time. This would prove
an educational force and would en-
courage the general public to do
likewise.
INTERESTED IN
EDGE BANKING ACT.
Preston is very much interested
in the operation of the new Fed
eral banking corporation now be-
ing organized under the Edge act.
In addition to the s1O,000,O00 in
stitution just started in New Or
leans. one is being founded in New
York with a capital or 500, ,000, ,O00,"
said Preston. 1T is probably thc
largest institution of the kind ever
attempted. John McHugh, of the
Mechanics and Metals Bank of New
York, is chairman of the organiza-
tion committee, and the project is
backed by other prominent New
York bankers and investors inter-
ested in foreign trade.
EXTEND MORE CREDIT
TO FOREIGN BUYERS.
The chief service of these insti-
tutions Is the extension of LONGER
credits to the foreign buyer, Pres
ton explained. The American cot
ton grower, for example. is not in
a position to extend twelve months
credit to a South American buver.
or European buyer. The foreign
trader, however, is forced to extend
a long credit to his customer. 1t ia
here that the banking corporation
steps 10. furnishes the money 10
pay the American producer, and
keeps the title to the cotton or simJ
liar commodity until the foreign
trader has paid for it.
The New Orleans corporation has
just closed such a deal, in which
s25U,OO0 stock of cotton was tn,
commodity. F. w n
~ Ell UIvsIU M