The Wyandotte news-herald. (Wyandotte, Mich.) 1943-1963, 1945-05-03

Continued from Page y
likely to exist in much greater de-
gree at the END Of the present
struggle. These conditions will be
temporary, although their influence
may continue with gradually dim
force for a number of
years. 1t is on the longer-term out
look that the chief interest and the
principal difficulties center.
FINANCIAL NEEDS
Too great reliance upon credit as
a means Of swelling foreign markets
for American products is certainly
to be avoided. Capital exports un-
doubtedly can and will be made.
Their volume should be determined,
however, strictly from the long
term investment point of view, with
due weight given to their probable
broad economic effects and the
prospects of repayment. There will
be a strong temptation to use credit
as 1t was used after the last war,
as means of stimulating merchan-
disc exports without considering
that In the end imports and serv-
ices must pay for both the loans
and our exports. If such practices
should be adopted again, they would
probably end, as they did before,
in a general international collapse
Of credit and trade, with heavy
losses to American investors.
Most emphatically, we believe, the
solution Of the credit problem does
not lie in the establishment of an
international Monetary Fund Of
the sort contemplated in the Bret
ton Woods proposals. Much more
effective as means of providing
such credit as may be needed to
promote exchange availability and
finance rehabilitation would be the
proposed International Bank for
Reconstruction and Development.
Such q bank. under proper manage
ment, could be Of service in sup
plying credit of types not suitable
for private investors.
POSTWAR
To a great extent. it appears,
postwar international trade will be
dominated by new set of forces,
some favorable and some 'unfavor-
able: and whether their net effect
Is good or bad will depend In no
small measure on the steps that
are taken now to build a sound
structure Of international economic
relations.
The greatest problem to be solved
In connection with this trade will be
to restore the means and mechan-
iSms for payment and shipment
without the hindrances created
during the war years and the pre-
ceding decade. Our postwar for
eign commerce must be carried on
with nations whose economies have,
in most cases, been much more Sc
verely dislocated than our own. In
some countries, economic life has
been brought virtually to a stand
still. In some. quantities Of curren-
cy in circulation have increased so
greatly that either drastic valua-
ton or drastic deflation will be
necessary.
Systematic Axis looting In occu-
pied countries has not only impov-
erished national economies but
raised questions of legal ownership
that may, In some instances, take
years to settle. Almost everywhere,
the war will have resulted in such
broad fluctuations in prices and
costs that the establishment of
an approximate harmony between
exchange rates and price levels will
be a difficult and time-consuming
process.
These obstacles arising from the
war viii be added to the maldis-
tribution of gold and capital funds
that was in process of development
for several years before the war be-
gan. To certain extent, this mall
distribution will tend to correct It
self; for the disproportionately
large share Of the worlds gold now
held by the United States Is partly
offset by abnormally large foreign
balances held here.
As political and financial order is
restore abroad, 1t Is reasonable
to assume that the foreign balances
will either be spent for American
goods or repatriated until they are
restored to normal levels. In the
first case, they will provide a
means Of payment for American ex-
ports. In the second, they may give
rise to gold movements that will
tend to correct the unduly large
accumulations now in this country
and supply the countries of origin
with additional gold reserves to sup
port their currencies and furnish
means Of making international pay
mentS. Meanwhile, however, the
gold stock of the United States has
become the reserve base for great
ly increased volume of currency and
bank deposits; and the prospect of
a large-scale outflow can no longer
be regarded in the same light that
1t could a few years ago.
Arabs and Moors plundering Chin
csc Turkestan brought back captives
some Of whom were papermakers,
and as the Moslem law provided