The Brookings register. [volume] (Brookings, Brookings County, S.D.) 1903-1971, 1922-01-05
BANKER DISCUSSES
ECONOMIC FUTURE
INTERNATIONAL COOPERATION
WILL SOLVE PROBLEM
SAYS SlSSON
BUSINESS IS DEPENDENT ON EUROPE
A Healthy and Prosperous Foreign
Trade Is Outlet for Surplus
and Stabilizer.
BY Francis Fl. Sisson

Editors Note-Francis H. Sisson is
vice-president of the Guaranty Trust
Company of New York City, one of
the largest and most important bank.
ing concerns in the world. He is a
student of international economics as
well as being thoroughly familiar with
internal economics and the financial
and industrial situation in the United
States. What he has to say of tariffs
and similar questions comes from his
viewpoint as an economist and bank.
er and not from the viewpoint of a
politician.
While economic depression prevails
throughout the world, as the newt
able aftermath of the most destruc-
tive Of all wars, American can no more
hope to solve its domestic economic
problems alone than the world can
reasonably expect to cure it's multi
fariOus economic ills by some magic
panacea. In the final analysis, we
were drawn into the European strug-
gle because of the economic interde-
pendence of all civilized nations; and
the only possible way we car fully
GOV from the effects of war is by
international economic cooperation.
Our complete realization Of that dom
inant fact is the paramount need of
the hour in this country.
But we cannot effectively COOP
crate abroad until there is more eff
caciOus cooperation at home. 1t is a
cas- of better teamwork within and
without. 1t is futile, for instance, for
n branch of the government to en-
dcavor to facilitate the granting of
credits to prospective foreign buyers
of u raw materials when another
branch of the government insists on
making it impossible for those buyers
to pay us their debts and liQuidate the
credits they obtain here. While the
extent to which the War Finance Cor
pOratiOn a aid American and for
eign interests in it's commendable eff
forts to supplement private sources
of credit in promoting our foreign
trade may be questiOnable-in view of
the abnormal world situation and it's
colossal demands, it's services must
unavoidably be negatived to a consid-
cradle degree by the enactment Of a
permanent high tariff act.
Consideration should be given to
the effect of a high tariff not only
upon particular industries, but upon
the welfare of the country as a whole.
We should not lose sight of the diff
ference between conditions when the
Payne-Aldrich law was enacted. The
effect of the adoption of a high, pro-
tective tariff today may be quite un-
like the eeffct Of the adoption of the
Payne-Aldrich law and similar meas
ures passed before the war.
Prior to the war, the United States
was a debtor nation and compare
lively little thought was given to the
effect of a protective tariff on our *
port trade. Today, an altogether diff
ton of a tariff law, with rates high
enough to interfere seriously with our
export trade, is destined to cause Sc
rious injury to our commercial and in
dustrial life.
1t is estimated that, prior to the
war, European capital was invested in
American securities to the approx
bate amount of 5000, OOO, 900. The
net payments of interest and divi-
dends On this capital, after deducting
the amount owed to citizens of the
United States on account of their for
eign investments, required the annual
remittance abroad of between $175,-
100000 and 1925, 600, 900. Other pay
ments, such as expenditures of Ameri-
can tourists, remittances by immi-
grants, freight, insurance, ETC., brought
the total up to about $500, 900, 900. In
order that these payments might be
met, it was necessary that our mer-
chandise exports should exceed our
imports by approximately the same
amount. And, in fact, the average ex-
cess Of exports over imports for the
years 1911 to 1914, inclusive, amounted
to approximately $3.50, OO0, 900.
Our pre-war status has been COM
pletely reversed. From 1915 to 1917.
inclusive, the demand of European
nations for goods was so great that at
the time of our entrance into the war
our Indebtedness to European in
vestors has been more than balanced
by the excess of our exports over i'm
ports. After we entered the war we
loaned approximately $4,000, 000, 900
to the Allies, but up to the present
time they have not been able to pay
even the accumulated interest there
on. In addition to this amount, we
have put billions more at the disposal
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