Evening star., 1924-01-27
IL. S. TRADE SITUATION
In FAR EAST SERIOUS
Europe Regains Advantages Through
American Money Now Flow.
ing to Her.

| $50O,000,0o0. That is, it buys that
much more from the far east and
Latin America than it sells ia lem. Its
needs nf oriental products. S Ich IS
silk, shellac, rubber, tine, tea, coffee,
! dried cocoanuts and other commodities
which 1t does not produce are pro-
diglous. Is this oriental credit which
the United States builds up by ex-
cess purchases kept in this country?
DOES 1t utilize this credit balances to
sell more machinery, iron and steel
and other specialties whic1 the orient
imports almost entirely? II does no..
This credit stays in Europe, and with
1t Europe buys less than ] per cert
OF American manufactured goods, but
instead principally American wheat.
port and cotton. with which to feed
and clothe European industrislis's
that they may make these things 70"
the buyers in the far east.
Much of this surplus credit is al
ready owned by Europeans and is
the return on their pre-war invested
wealth in their rich colonies. When
these colonies need lead" cans TO
pay off past administrative debts. or
Tor other non-conStructiye purposes,
then and only then do they approach
our bankers. In lending, AS the
United States has done, large sums
to European colonies for such pur-
poses-guaranteed, il is true, as to
principal and interest, by the Euro
pean home goTernment-it handicats
Itself In at least two ways. In the
first place, it disposes of loanablG
surpluses which could be put into
active use in developing export trad
directly with the orient, ;Iad in the
second place, releases European fumes
TO be used in active trade competition
with the United States in the far
east.
In the development of financial
policy in the far east which would
not retard the rehabilitation of Eu-
rope, but at the same time actively
encourage American export trade, u
is necessary to inform the INVESTING
public of both the pitfalls and the
profits in direct trade promoting in
vestment. The money that has been
invested In wildcat ventures during
the past year would pl"cc American
business in the orient an eminent
ly sane and stable footing. II is the
function and duty Of bankers to j.
rect funds now squdndercl in un-
profitable investments into sane pItJ-
ects for the promotion % American
industrial well being.
Investments Necessary.
1t is needless here to dillte u;,Cn
the advantages of safe margin Of
export trade consisting principalIy
OF manufactured products. AS the
United States encourages such trad.
its industrial establishments expand.
and wide market is found at hoiae
for foodstuffs anG raw materials.
Such trade can only be fostered in
the orient by extensive industrial in
yestments. These investments may
very profitably take on several char
acters.
In the first place, there can be a
gradual change in the present situa-
ton whereby America annually pays
tribute to European owners Of rubber
Plantations, coffee and tea estates
etc, by diverting funds into channels
OF investment in these plantations in
the far east. Then instead of credits
being built up in Europe from the
profits of raw materials supplied
American industries, those industries,
aided by the American investing pub
llc, would retain those profits, ard
their manufactured prod mada
from these raw materials would be
cheaper to consuming publics both
in this country and abroad
In the second place. the United
States can invest directly in oriental
manufacturing industries and thus
find huge outlets for American ma
chlnery and other equipment These
industries are bound to be established
in the orient in any event If Amer
lea fails to invest III them directly,
the funds it releases in Europe win
indirect investments III admnistra-
tive loans to European colonies sure
ly will be thus utilized.
The time has come for a facing of
facts in the far eastern situation
American money must back up Amer
lean ideals and promote America
trade, or no ones money can be relied
upon to do it. II the United States
maintains and follows ii wise invest
ment policy under the leadership of
its bankers, American trade cannot
help but increase, costs of imported
raw materials will surely diminish.
and the general prosperity of the
United States will be improved