The Washington herald., 1922-03-02

with the laws of economics and finance, to
stand in the main for honest money and true
measurement of human effort and human thrift
made effective by an honest standard of values
should be matter of considerable pride to every
American, doubly so when this has been accom-
plished against decentralization of exchange which
has taken place in practically every nation of the
universe.
q Energetic attack the problems which face
Europe, and disposition to meet and grapple with
disorganized conditions and set them right, and to
win back, by hard work and economy to the pre-
conditions of undisturbed economic and fnan-
eial machinery appears to be the thought foremost
"a the minds of leaders in this country and abroad
1t is this sincere tackling of difficult problems which
has had sympathetic reflection in the foreign ex-
change markets during the past several months.
H The foreign exchanges, naturally, are deeply
involved with the national problems under consid-
Grafton at the present time. Their ramifcations ex
tend far beyond national relations The foregn
exchanges involved in the condition of foreign
trade in the Generalization of currencies of many
Of the European countries, in the state of home in
dustries and in the energy and application of the
people of each country
: A glance at the position of the exchanges of
the principal countries of the world one year ago.
in comparison with the quotations of today presents
some extremely remarkable changes, changes which
IN the most part indicate frmer grip on its own
affairs by each nation.
Liquidation and depression which characterized
conditions in the United States at the early part
of the past year general in other countries as
we'll At the time. industry, was, for the
greater part, restricted to hand-to-mouth necess-
ties such as would be Immediately purchased and
paid for. Labor troubles became apparent. But
from this gloomy beginning there has about a
change, comparatively moderate at the moment,
but that carries great hope for the future.
1t has had its international reflection in an i'm
provement in the purchasing power of the curren-
dies of most of the principal European countries.
In this improvement. too, is to be found the most
encouraging sign of the future for the countries
whose industries and business were in the very
depths at the start of last year Abroad as in the
United States there has been slow but sure revi-
val. The employment problem is less acute than
it was several months ago. Living costs arc de-
Ginning to point where they will meet the wage
scale. Foreign trade. to a restricted degree is
picking up.
Great Britain will, from present indications,
shortly join in the upbuilding of world COM
merce that rests solely on financial integrity in
practice and in standard.
The rise in sterling that has been under way
for the past several weeks appears well ordered
and determined to be casual movement 1t
occurs when there has been a decided loosening up
.AOoAiS
set free from many lines of industrial activity is
seeking permanent lodgment in securities
offering a surer, if smaller, interest return Our
own bond market in recent months was first to bear
witness to this development. Now attention is be-
ing directed to London-and $44IH sterling is the
result, despite lowering of bank and money rates
This figure compares with $4-2s on January and
with low of S353 for last year.
1t is yet too early to hope for anything like
tions in the English financial situation leading
fnanciers opine, and parity for sterling may be
some way off. There is huge long account" in
exchange to be settled yet. The Federal Reserve
Board says there is 5000 100000 in unfunded
commercial credits hanging over the exchange
market which may may not call for settlement
at this time. Moreover, although British credit
may be stabilized there is host of foreign cur
rencies that will not be so for a long time, and
sterling must more less bear the brunt of their
weakness.
Present exchange is the index of disordered
or unbalanced world and itself the chief obstacle
to the freest possible resumption of trade 1t is not
probable, practicable necessary for the exchanges
OF number of countries to return to their prewar
levels, at least for many years to But if the
exchanges reach some degree of stability at almost
any saneslevel, world trade will take on the pro-
portions of necessary business operation and less
of gamble and hazard
In support Of this argument attention is called
to tn; methods employed by German grain import
which clearly portray the difficulty of transact
ing business with exchange confused and demoraI-
lied as it is beyond the Rhine. "A German grain
merchant buys wheat from this country when the
mark is selling at, let say, cent When he
has arranged for his grain and has also closed
contract with purchaser he Immediately buys dol
lars at the bourse and is obliged to borrow to pay
for his dollars In this way he is safe from pos
sibie fall IN the mark. but at the same time has
completely tied up his capital and credit and re-