Show I I I Oil CANCELING ORDERS ORDERS' HARMfUL TO T. T U. U S. S COMMERCE Warning Against Repudiation Repudiation J tion tion on as as' as Relief From Falling Fallini Market ark t I. I Dec serious tea tea- NE NEW y Y YORE YORK A 15 A A ot ture of our our foreign foreign trade relations Is the increase in the number ot of cancell cancellations cancellations cancel cancel- l lations of or orders the repudiation of ot contracts and the protesting of irrevocable irrevocable irrevocable irre irre- credits upon credits upon technical grounds by some American import concerns ac according according according ac- ac cording to the review of International trade of the Guaranty Trust company compan company These practices whatever their Justification justification Justi justl- ha have ve assumed proportions lately that threaten to impair the standing of ot the country In lathe inthe the markets of the world It says says and points out that these methods have been resorted to in most cases because the recent decline in commodity pric prices s has occasioned occasioned occasioned occa occa- losses to Importers 1 Here ere who consequently are endeavoring to rei relieve relieve re re- re lieve themselves of O obligations ns entered entered en en- i 1 into with foreign houses I en-I A letter from one l Far ar Eastern bank I is quoted as typical of the general dis dissatisfaction dis- dis satisfaction in foreign fields over 1 the situation I LETTER LETTEn I To our extreme regret we must Inh in inform inform In- In form you t that lately lr both banks Inae and I merchants h here e feel s some uneasiness concerning the possibilities of con contin continuing contin- contin continuing Un- Un the close business relations which dI were established S li with your r country n during the war a and which U until l re recently recently re- re I have developed to the satisfaction satisfaction tion of ot all concerned says the letter I This uneasiness which we are sorry to observe almost everywhere Is due to I Idy the unfortunate o experience e e of late re regarding regarding re- re dy d garding the attitude of American e buyers buy buy- ers era toward their business contracts Refusals by American banks to honor drafts drawn under their letters o of credit because of ot quite Insignificant I deviations from the usual wording o of letters of credit have recently occurred i again I and again g notwithstanding that tha J the bankers a r here e eni ni immediately offered offeree i guarantees of redress for such small smal inaccuracies Obviously these refusals I were instigated by American buyers and one cannot help feeling Inclined to attribute the attitude of the American AmerIcan American Amer Amer- ican banks to the changed attitude o ot of American merchants GREAT HARM I lONE DONE I Although A it may y bo be that s such methods methods meth meth- I Iwho il ih yo od are practiced o only by merchants who have already acquired repute In your country for bar unsympathetic commercial com corn comi i mercial principles you will readily understand understand un un- un- un unI I r that the victims lr here naturally natural natural- U I ly generalize aW in et their conclusions n r I and ld thus great harm Is being done to the development of ot our trade with America I The Tho exchange banks of ot Java under the c circumstances f c are reluctant to take e American bills H Hence the e ex extent extent ex- ex I tent of our business relations ma may be i seriously affected which we are trying trying try try- I ing our best ri to prevent Oj In justice s to the American business businessmen men however the review points out I it should be said that most or them are living up to not only the letter I but also the spirit of their contracts abroad And it continues although we have no desire of course to excuse any American business man or bank from the responsibility of carrying ou oua out outa a contract in an honorable way it mus must be admitted in fairness that there are extenuating if It not wholly justifiable grounds for some of the repudiations of contracts complained about ON OX THE TILE OTHER HAND For instance it is asserted that Innumerous in innumerous innumerous numerous cases when an American importer has purchased sugar in Java the merchant there postponed shipment as long as possible on a rising market market mar mal ket and traded in and out to the Imminent im imminent imminent Im- Im risk of the American buyer and very frequently it is contended only when forced by a declining market market market mar mar- ket and by approaching expiration ol ot of the letter of ot credit under the contract has the Java merchant shipped the sugar It It is also alleged by American importers importers importers im im- im- im I porters that more frequently than occasionally oc occasionally occasionally oc- oc merchandise bought abroad has not actually been on board ship within the time specified and that bills of ot lading have been Issued dated back within the life of the credit Consequently Consequently Conse Conse- American merchants feel that they are entitled J to reject the goods goodson on a legal technicality to protect themselves themselves them them- selves against what they regard as commercial bad faith on the part them them-I of shippers American importers complain likewise likewise likewise like like- wise that contracts have been canceled abroad oftener than here citing large I numbers of such repudiations in South America and Europe Including Great Britain They point out that even legIslation legislation legislation leg leg- I has been invoked to make the entrance of their goods into port il illegal ii- ii 11 1 legal leg reference being made lI ly to the rice situation in id Cu CuSS Cuba 1 I HAZARDOUS Jr PROCEDURE American bankers can can testify that it has bas become a a. hazard to make advances on collections drawn on buyers In Inmany Inmany inmany I many foreign countries As Ai a matter of f fact ct so great has this hazard become become be be- I be-I come that most bankers in the United make advances advances ad ad- ad States are disposed now to vances on such on-such such sueh collections only in the case of or drawers of the strongest financial financial finan finan- cial responsibility And whatever the foundation for the complaints of or foreign foreign foreign for for- eign banks we are confident that It is not related to the action of ot any of tho the long-established long international American American American Ameri Ameri- can banks But nut in this critical readjustment period it is even more essential than thanin in normal times s to pr preserve t the e high tigh- est business ethics In foreign trade trace as aswell aswell well as domestic comma commerce Our who whole e commercial structure rests upon a a. contractual contractual contractual con con- basis which in turn is founded found found- ed upon solemn moral obligations We Ve cannot ever afford to impair the stabilIty stability stability ity of ot that structure and certainly not at this time of all times by permitting any weakening or deterioration of or its very cornerstone |