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Show FINANCING OP EXPORT TRADE TO LIMIT SPECULATIVE FUNDS European Recuperation Is Expected to Be Comparatively Com-paratively Quick; High Money Rates Are Expected. mean a much, more speedy resumption of large exports and capacity for t lie reestablishment of sound economic relationships re-lationships in international trade. Other factors, too, of a like nature will undoubtedly be found to exist when the actual adjustment of our business occurs. The solution of the foreign trade problem lies in the granting of longtime long-time credits to Kuropean consumers. Up to the present time there has been a general feeling in many parts of the country that this business of arranging credits is entirely up to the bankers. The bankers feel differently about it, maintaining that they cannot attend to the matter without receiving the cooperation co-operation of all interests concerned, which includes manufacturers and producers pro-ducers of all kinds of goods that Ku-rope Ku-rope needs, and the investing public. The manufacturing and producing interests in-terests have thus far failed to display the active concern and willingness to cooperate that are essential if any of tho plans so far discussed arc to prove successful. Loan Is Exhausted. Appeals to "Washington can accomplish accom-plish little unless congress sees fit to authorize the treasury to advance new and very considerable sums to European Euro-pean countries. The $10,000,000,000 authorized to be loaned to cobclliger-ents cobclliger-ents is about exhausted and the government govern-ment has no other funds for the purpose. pur-pose. Furthermore, the attitude of official of-ficial Washington is said to be against any new advances for foreign trade; the federal reserve board, in a recent circular, stated its belief that business of this sort has now passed out of the stage where .government aid is longer possible and that it is entirely in the hands of banking and commercial interests. in-terests. All the important trade and business barometers report a brisk resumption of activity in every line of industry. Business momentum is so great and demand de-mand is so heavy that reflection must soon be found in every remote section of the country. The crop situation is perfect, never has nature been so bountiful boun-tiful and never has the buying power of ithe agricultural districts been so great as at present.. The labor situation situa-tion is serious, additional unrest and labor strikes making their appearance in sections which have heretofore been blest with more than their ordinary share of business sanity. But the whole country is so prosperous and demand is bo far-reaching that these troubles exercise as yet only a slight influence. Fall buying this year has begun much earlier than usual, buyers of goods complaining com-plaining only of slow or partial deliveries deliv-eries and manufacturers of staples and of luxuries are straining to fill orders while handicapped by lack of wholly or partially manufactured materials for their industries. More than ever before, be-fore, the list of things active is practically prac-tically a roll call of the country's products, prod-ucts, such few lines as, for instance, iron and steel, which lagged earlier in the year, now showing growing strength in buying, in prices and in output. At most iron and steel manufacturing centers, cen-ters, old material is higher and. pig iron shows a firmer tone, despite increasing output, while in finished lines, wire products, pipe and plates, the latter largely for oil trade uses, tinplates and bars .are active. Export trade is gaining, gain-ing, especially in tinplnte, and a form of large possible indirect export s revealed re-vealed in reports that a big French order or-der is pending, which may mean heavy sales later of plates to the builders. NEW YORK, July 27. It is only .logical that the violent fluctuations fluctua-tions in foreign exchange, which have excited wide comment in recent re-cent weeks, should find reflection in an unstfady development in other departments depart-ments of t he financial markets. It haa drawn attention to the acutenesa of the foreign trade problem, and to the necessity of quick and decisive action on both" aides of the Atlantic in formulating form-ulating plans for the financing of foreign for-eign trade. It was coinciden tally with the rc-Humption rc-Humption of trading in exchange on Berlin and other German cities that the Hp-tacular break in sterling and francs occurred. There has been a tremendous increase in the offerings of sterling bills in our markets, many of them representing rep-resenting hold-over cotton and gram bills which former holders had been keeping in expectation of a better market mar-ket following the actual signing of the peace treaty. Seeing their hopes fast disappearing, they concluded rather reluctantly re-luctantly to get from under on the best torms available. Suspension of business in Berlin exchange ex-change was ordered in March, 1917, lust prior to our entrance into the war. Prom a normal of 23.82 cents to the Gorman mark, the final quotations about that time were 17.31 cents. The rate at which the mark sold last week, S!i cents each, was therefore about one-third the normal price, or a discount dis-count of 64 per cent. Considerable confusion has been caused by reason of the fact that bankers in this country are unablo to determine whether or not the balances which they had in Germany Ger-many on the outbreak of the war are still available. The latest information is that American balances in Germany have been attach'ed by that government, but not confiscated, and there is reason to hope that these balances may be drawn upon the resumption of trade movements. In the meantime, American Ameri-can bankers and exporters can avail themselves of the balances and facilities facili-ties of European neutral nations, which are able- to offer reichsmark exchange in any quantity. Foreign Trade Problem. There is a peculiar reason why the stock market should fall and break during dur-ing critical periods in the foreign situation, situa-tion, and this is related directly to the financing of the two lines of enterprises enter-prises referred to. While there has been no official announcement of the methods meth-ods to be pursued in financing our export ex-port trade, it is evident that something is to be done, and that that something will draw off a large sum from the domestic do-mestic market. Bankers have estimated that to keep up our present foreign trade for the balance of the year will require from $3J)00,000,000 to $4,000,-000,000, $4,000,-000,000, and it is most unlikely that this vast sum can be obtained through private channels; add to this the $5,-000,000,000 $5,-000,000,000 needed by the treasury and an idea may be had of the drain to which the money market will be subjected. sub-jected. With the necessity of furnishing furnish-ing this amount of money for special purposes, Wr1 street has begun to realize re-alize that ?unds for speculative purposes pur-poses will be somewhat circumscribed during the balance of this year at least. Two phases of tho subject may be considered in passing; first, the strong position of the average investor, who has made big profits since January lj and is therefore able to finance himselt to a larger extent than during any previous pre-vious bull market; second, the possibility possibil-ity of arranging for government and private credits on this side of the water wa-ter through powerful syndicates of in-ternational in-ternational bankers, the proceeds to be emplo3red in the purchase of our commodities. com-modities. It is obvious that if we wish to extend our trade to foreign markets we must make every reasonable reason-able effort to assist in the financing of the export movements. Money in Demand. At the present time there are demands de-mands upon the money market not only for foreign financing, but for crop moving, fall domestic trade, income tax payments, government financing and excessive speculation. This presages plenty of use for surplus funds and insures in-sures a period of high money rates reaching well into the new year. Recuperation Re-cuperation after past wars has been very much more rapid than has been expected; and, while the depression in the latest war has been greater than on any proceeding occasion of the sort, it is reasonable to expect that the process of recovery will, relatively at least, be a quick one. Some recent estimates have been to the effect that Europe may be expected to be "on its feet" by the middle of 1920. This should |
