Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-07-14
NEW WORLD BANK
TO AID !. S. TRADE
Both American Exports and
Domestic Business Face
Greater Expansion.
Special Dispatch to The Star.

Special Dispatch to The Star.
NEW YORK, July l3.-Wider mar
kets for American goods shouts result
from the new reparations pm and
from the investment functions of the
Bank for International Settlements, ac-
cording to a review published by
Frazier Jelke a. Co.
This larger market will be found in
more stable Europe as whole and
particularly in Germany, facing a new
era of progress; 1t may also be found
in those regions outside of Europe
where the Bank for International Set
Elements may invest its funds in order
To stimulate industry. The result
should be helpful to American export
trade and hence to American domestic
business; and the United States has
another reason for confidence in the
economic success of the year 1929.
Bank Granted Broad Powers.
"a non-political institution. the bank
is to be granted broad powers In the
field of international banking which
seem destined to give it a new and
unique position among central banks
Of issue; 1t can apparently assume
nearly all the functions associated
with regular banking except the receipt
Of deposits on the part Of individuals
and the handling of individual trans
actions.
THE functions of the bank which
are of greatest significance are those
concerned with its investments. In its
loan, discount and investment opera
TONS It may deal directly with central
banks or. through central hanks acting
as its agent, or with banks or individual
bankers of any country. The bank Is
thus given certain possibilities of profit
making associated with commercial
banks and becomes an instrument OF
potential importance in opening up new
fields of commerce.
1T has been pointed out that the
bank might invest funds from time to
time in the industrial development of
certain countries. The funds which the
bank might invest in the industries, for
example, of Russia or Latin America
or Africa would make very vital con-
tribution to industrial progress in those
regions and might be followed by
marked increase In world trade. The
activities Of the bank in this direction
would, however, be limited by its COM
parative lack of funds and by the fact
that the central banks themselves might
be opposed to any too great development
along lines that might interfere with
their own operations.
Functions Carefully Safeguarded.
1.-THE investment functions of the
bank are indeed, carefully safeguarded
by the provision that the bank may not
conduct transactions in any money mar
ket except with the consent OF the GEN.
trail bank Of that country.
THE bank will also act as an agency
to aid in the coordination Of the CEN
trail banks of issue. Heretofore this CO.
ordination has largely been based upon
personal relationships, with the heads
of one or two of the central banks act
ing as leaders. Now. however. DEFINITE
and permanent medium for this CO.
ordination is established. AS such the
bank adds a new fundamental stability
to the structure of our civilization.
The reparations settlement as
whole should mean an economic revival
in Germany. 1t opens to Germany two
new sources for the capital funds which
its industry has so urgently needed.
First of all, the new annuity reduces
Germany's payments by about $l03.000,-
600 as an average every year without
considering payments which might have
been required under the operation Of
the index Of prosperity. Second, the
final signing of the agreement and the
elimination of the question of priority
will make it possible for Germany to
borrow new capital in increased
amounts, principally In the United
States, but also in other countries.
Increase in Investments.
"It is probable that there will be an
increase in American investment in
German industrial and municipal secur-
tiles. This will not only result in the
expansion OF German industry, but will
make 1t possible for that country to pro-
coed with construction projects which
have been for some time deferred. While
this may make Germany a stronger
competitor of the United States, 1t will,
to an even greater extent, enlarge the
German market for American goods"