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The Columbia University Libraries reserve the right to refuse to accept a copying order if, in its judgement, fulfillment of the order would involve violation of the copyright law. Author: International Trade Conference ■ ■ mm m Trade thought of post Europe Place: New York Date: [1919] MASTER NEGATIVE « COLUMBIA UNIVERSITY LIBRARIES PRESERVATION DIVISION BIBLIOGRAPHIC MICROFORM TARGET ORIGINAL MATERIAL AS FILMED - EXISTING BIBLIOGRAPHIC RECORD i 40' Intermtlonal trade oonferenoo, Atlantic City, 1919. • Trade thpu^lit cxf post-war Europe} old-world needs and Anorioan opportunities as reflected in ; - addronsos and reports at the International trade oonferenoe, Atlantic City, 11. J,, Oci. 20,21,J?2, 2Z,?A, 1919, callod by the Chanber oooraeroe of the United States, Hew York, Irving national bank, ^1919 3 88 p. 20 cm, (irvins national bank, IJew York, cPonphletCj ^^v^S/ no. 6) RESTRICTIONS ON USE: TECHNICAL MICROFORM DATA FILM SIZE : REDUCTION RATIO: 10^ IMAGE PLACEMENT: lA UIA) IB DATE FILMED: IX- lb ' ^ TRACKING # : INITIALS : 30- FILMED BY PRESERVATION RESOURCES, BETHLEHEM. PA. > DO O m CD o o CO X > (0 O > V 1.0 mm 1.5 mm 2.0 mm o o Ui 1 O N3 1^ i;^ lUKLMNOPQASTUVWXYZ ^ 11234967890 ABCDEFGHIJKLMNOPQRSTUVWXYZ abcdefghijklmnopqrstuvwxyz 1234567890 ABCDEFGHIJKLMNOPQRSTUVWXYZ abcdefghijklmnopqrstuvwxyz 1234567890 ABCDEFGHIJKLMNOPQRSTUVWXYZ ^ ^ abcdefghijklmnopqrstuvwxyz 2.5 mm 1234567890 ^0 4^ V m 3 O o -o m "o ■2i 5 x" I ^ ^ m > D m 4^ 4 Vd. V DECEMBEB. 1919 No. 6 TRADE THOUGHT OF / POST-WAR EUROE NUMBER THIRTY-FOLR LIBRARY SCHOOL OF BUSINESS IRVING NATIONAL BANK WOOLWOBTH BUILDING NEW YORK LIBRARY TRADE THOUGHT OF POST-WAR EUROPE Trade Thought of Post-War Europe CMJO.WOKLD NBDS AND AMEUCAM OCTOa i U mT iM AS IKFLEGTKD IN ADDRESSES AND RKPOKTS AT TBE ATLANTIC CRT. NJ.. OCT. U, 21, SI. tt, U, 1919 CALLED BY THE CHAMBER OF COMMERCE OF THE UNITED STATES Irving National Bank WOOLWOBTR BUILDING, NEW TOBK iHit pamphWk iSttt tidrtj^bortli €if • Mriet pdblklidl 1»7 tlie iKfiMO NAimuL Bahk m m contoiMoa topdblicthmi|jitiiponqiiegtioMgfe» lating to natfawMil prosperity. For list of piili]icatioiia» which will be forwarded upon request, tae tlw final iMmaa irf thia hooticili in A sc. J 7 .■! _., V- CONTENTS I THE INTERNATIONAL TRADE CONFERENCE A brief review of the Atlantic City congress and what it accomplished towaids supplying Europe'a need few foods, raw materials and credits, n WHAT EUROPE NEEDS MOST ^ou ranain strangers to our efforts you will renuun strangers to our future— but you will not remain strangers to our sufferings'' 19 Ms. EuQENK ScHNEiDEB. ChftiniiAB, FmbcIi MiMioa; Pmidtat ol Ciwwt Sted Works, Pans, France. Mb. William G. HAU>oia, Governor, Federal BcAenre fioaid, Wuhipg- tttkt n*c» Sni Jambs Hopb Simpson, Manai^ing Director, Bank of Liverpool, liver- Ms. Jambs S. Albxandbb, Chairman, CobImwdcs CoBunittee on Ci«dil md ^ PfcBAisat.WBti0BBiBBBkqlC0BMBMBS,llwrYB^ Mb. Flobimond Hankab, rfcsiiMii. Bc^isa lliMioa: niraelor, NbIiomI Bank of Belgium, Bruiseb. Mb. Altbed C. Bedford, Chairman, Executive CoBUBittts cf Chairman, Standard Oil Company, New York. Mb. F. O. Watts, President, First National Bank, St. Loois. Mo. Mr. William C Bbbvibkb, Sessstaqr* PiipsilMial «f ton, D.C. Mb. Albbbt E. jANssmi Director. NbHobbI Baak of BelgiuBii ftyfiHij, university of Lonvam, Belgium. M b.^ Bbbcb bwbidqb Long, Assistant Secretaiy, DefMfCMBt of Stats. Ma. HOMBB L. Fbbodsoh, Pretideat, Chamber of Commerce of the United III HELPING EUBOPE TO BUY 'There is a great, world-wide seardty of capital: for five yean the world has devoted its energies to the destruction of capital." £8 Mr. Alfred C. Bedford, Chairman, Executive CoauaittiB bI Chairman, Standard Oil Company, New York. CONTENTS Helping Europe to Buy — Cont. lb. Mtbon T. ISmamm. niiiiiiiii, DUm OulUt mi Gute C o f i f. Ifm. WnuAif 6. H4niiM» GvfWBor. Mml It nii w Bovd, W i rth i g Mfc DanMnoo Gdcwi. Repcwwtnttw «t ItalM T^MMiy im VmM SliiHb Mmt Ywlu Ml. Uhlxam C. RaoriBLO, Secretary, Department of CfMUMrat, WmUw taii.B.C Mb. F. O. Watts, President, First National Bank, St. Louis, Mo. Sir James Hopk Smmm, MMMgH^ OuMtor* Buk cl limpooL Ufm- pool, England. Mr. James S. Alexander, Chairman, Conference Committee on Cftdil and Finnace; President. National Bank of Commerce, New York. Mb. Norman F. Dayu, Prendent, Trust Company of CnU, Nop Toik. IV WHAT'S BACK OP EUROPFS CaiEDIT **If you want to loKiir what a nation will do wiien put to a test, ask what it has done in the past, even obtuse Germany knows that" Mb. Dwran W. Monow. 1. P. Morgaa * C om p inf. NMr Toik. SiB Jambs Hops SmraoM, Manayng Director, Bank of^Liverpool, Liver- pool, England. Mr. Alfred C. Bedford, Chairman, Executive Committee of Conference; Chairman, Standard Oil Company, New York. BaaoK Du Marais, Yieo-GkMrama* Fknck Miimob; Director. Credit I^TM- nab, Paris, France. Mr. Myron T. Herrick, Chairman, Union Carbide nad Catb oa Ctafaif. Cleveland, Ohio; formerly Ambassador to France. Mb. Ferdinando Quartiert, Chairman, Italian MliiiBBi Pfwid— t, IlaMaa Ckemkal Ukdiutriet C<»poration; Milan, Italy. lfa.y.aWAfi^FiMiJMt.fiwtNatiQ«dBMJuatUak Ma. Albbbt E. Jawibbn, Director. Natioaal Baak af Belgium, Br a m li t Pipa- iMor. Pai f mAj r of LawraiB. Bi|gia« Mb. Eugene Schnbioeb, Chairman, French Miiikm; Priiideat of CfoMal fliael Watkt. yinaeib Mb. Nobman H, Davis, President, Trust Company of Cuba, New York. Mb. James S. Alexander, Chairman, Conference Committee oa Cndii aad Finance; President, National Bank of Commerce, New York. Mr. Domenioo Gmmi» lipNMMlfaai UaKaa Trnmrnf im UwktAiMtm Naw York. CONTENTS V LABOR'S ATTITUDE OVERSFAS '"The abuse made of the words socialization and nation- alisation has brought about a f onnidahle leactkm in publie opinkm." Sir James Hops Simpson. Maaagiiv Diicctor. Baak d LiviipoQl, livafpaoL England. Mb. Flobimond Hankab, Chairman. Belgian Mission; Director. Natioaal Baak BB , Chairman, French Mission; President of Creusot SImI Wadkib fiaia - - Umu p. O. Wati% Ptandeat, Pint Natkiail Bank, St. Loon, Mo. BygM«ll|r]^ French Mission; Director Credit Lyon- Mb. AimD C Bedfobd, Chabama, EMCvtiTo Coaunittce of Coafeteace: CkMTBwa. Stawiaid OU Ccmp^^lhw TariL Mb. Albert E. lANaamr, Director, NatioBal Butk of Bfhiiiai. PkafflMor. University of Louvain, Brussels, Beigium. Mr. John H. Fahet, Vice-Chairmari, Executive ConuBltlBB e are great and varied* and she will remain for a long time one dt your best customers. Suppose that, on account of the rate of exchange, we should buying you. How would your industries be affected? Would there not be overproduction? Would there not be considerable unemployment? Would there not be a wide economic disturbance, with all its consequences^ The gold heaped up in the vaults of your banks must not give you too much confidoice. Bear in mind that gold is a fiction. Its values arise from its being a medium of exchange. n II se- iMlity. An abundance of gold may be as evil in its o quences as a scarcity of gold. Your interest, no less than ours, is involved in the finan- 19 INTERNATIONAL TRADE CONFERENCE cial problem of the Old World, and if only loans can bring the rate of mdhange down to a ffionnhlci level, that should be one reason the more for Americans to invest in such loans.*' Mr. WUHam G. Hmdint, Ckmmmr, fMml Bmmm Bomdp It is the view of the Federal Reserve Board that the need of Europe is for long credits, and that the situation, there- fore, is one which appeals to the investment market. Many of the problems whidi now confiroiit European countries are present in an acute form in this country, and there is a great need for larger production, reduced consumptioUt more eeonomy and thrift The liquid wealth of the world as rspm- sented by goods and conmiodities has been reduced to an alarming extent by reason of the war, and the volume of credit throughout the worid is out of all {Hroportion to the volume of goods. In order to bring about more normal con- ations, it wiU he neosssary to restore the proper balance be- tween credits and goods. This process will necessarily be a slow one, but it is essential that a beginning should be made and the restaration can be made only by rigid application of the principle of work and save. ''We must economize in consumption. There should be conservation of capital and credit in orts. In the ten moodM pswediog the aimislaoe, so ftf as the pufalisfaed figu^ 21 INTERNATIONAL TRADE CONFERENCE go, our exports exceeded our imports by about $248,000,000 a month. Since the armistice the figures have risen. In Janiiary our caqport balanoe was $409,000,000 ; in April it was $442,000,000; in June it rose to the astonishing figure of $62S,000,000. Exports in that month were $918,000,000, and imports were $293,000,000. Om* average export batanoe for the first eight months of 1919 was around $400,000,000 a monlii. All of this excess and somethiDg more has bem in our trade with Emt^. " When the situation is viewed from the other side, even more striking figures appear. France kiq[M3rted over 12,000,000,000 francs' worth of goods in the first six months of 1919 and e3q[>orted only a httle over 2,000,000,000 francs' worth of goods, leaving her an adverse bakmoe of trade of neariy ' 10,000,000,000 francs. Similar proportions appear in the export and iipport figures of Italy. Great Britain has had dmring the ftrst months at 1919 an adverse trade balance equivalent to something over $2,000,000,000. ''Our e3q[>orts to Europe have changed in character radically since 1913. Brfore the war we sent Europe largely crude foodstuff's and raw materials. Today we are sending Europe very largdy foodstuffs partly or wholly manufac- tured, and finished manufactures. In other wards, we have been, since the armistice, sending Europe chiefly goods for Bumediate consomption rather than those thingn wluch she could use setting her industries going.'* Mr. Florimond Hankar, Chahrman, BelgjUm Mission; Mr^ctor, ''You know all too well what happened to my country during the war. You know dT our destroyed cities and towns, our wrecked industries, our workmen taken away into slavery, and the miles of devastated f aimiog and fruit lands. But there is a new story of Belgium beginning. Belgium's wrecked towns and cities are being set in order. Her roads are being rebuilt. Hor shdl-tom fidds are being plowed and 82 WHAT EUROPE NEEDS MOST planted and crops harvested. Here and there, manufactur- ing plants, which were not despoiled of their machinery by - the invad&ig foe, are q^miting again* Throughout the land there n industry — where industry is possible. The people of Belgium want to work ; they want to pro- duce. Let me say to you that just aftw the armistice there were 800,000 unemployed in Belgium. And today there are less than 200,000. The spirit of the people is there, but the needed implements and supplies and some foreign credit are lacking. We look to the United States to furnish those nec- essary factum for the de veloimient of Belgium, for the build- ing up of a new Belgium that will be more prosperous, more productive than the dd." Mr. Alfred C. Bedford, Chairman, Executive ConmUitee e/ Om^ /wanes; GMmim, SUmimrd OU Cem^mtf, Nem York. '*Some of the early econmnists used to teach that a nation grew wealthy in proportion to the difference between the amount of goods it sold to other nations and the amount it purchased from them. In othor w<»ds, the siae of the export 'balance of trade' was the measuring rod of national progress. Later, Adam Smith and those who followed him taught that a nation miwt not only sdl to the world but that it must buy from the world, and that the ideal situation was not repre- sented by a huge 'balance of trade,' but by a large volume of trade at a virtiud equilifariimii between what was sold and what was bought. "This war has taken us a step further in the developaient of cur thou^ts. We now realixe that it is not only necessary to sell to the nations of the world and to buy from the nations of the world, but that we have a direct interest in actually promoting on its own account the prosperity of the world, not alone of that part of it comprised within our national boun- dary Imes, but quite as ttmck the prosperity of lands remote from our own. In a peculiar sense is this true of our immedi- ate interest in the reconstruction and revival of the lunawmnr 2S INTEBNATIONAL T RADE CONFERENCE heaUh and prosperity dt those oounlries who have been our AUies during the war. Mr. F. O. Watts, President, First National Bank, St. Louis, Mo. ''What is the esteiit and what is the nature of Eut^m's needs? Europe has had far too modi in the way of goods from us since the armistice. We have sent her a relatively small percratage ci raw materials. The great bulk of our exports have been finished manufactures and foods, articles for inmiediate consumption rather than those which could be used in further tvoducticMi. Luxuries should not go and many of the goods which we consider the comforts of life are of doubtful advantage. Food in adequate quantities Europe must have. Raw materials Europe must have. Our FVsndi firiends teU us that they do not expect or need machinery. They plan to produce raib for e(i|M^ They plan to prodnoe locomotives. As far as possible, Europe should produce her own manufactured goods and should produce manufactured goods far export. No doubt considerable madiinery is needed by certain of the countries to the east of Germany, where the destruction has been great and where establisb- ments for producing machinery are less adequate and in less satisfactory condition." Mr. William C. Redfield, Secretary, Department oj Commerce, Washingjtan, D.C. 'The dtuaticm is even worse than I thoag^t at tha* time, for I did not then recall what ought to be really in your imnds as business men; that when wt say we are aocuBHh lating now a balance, as we call it, in our favor of about few ' billion dollars a year as things are now running, that balance is ipedkoned in American dollars at par. If it is reckoned in the currencies in which it must be paid by those who owe it, you must add something like twenty or twenty-five per cent. So the four bilHons of dollars in our favornow,redLoned from the standpoint from which it must be considered by UMist. of Eraopct is the equivalent of about five biiyons. 4 1 WHAT EUROPE NEEDS MOST ''As I see it, the obligations d the wosld to the United States are, as a whole, understated. The figures are so very large that perhaps one is afraid to put them where they really are. But it is just as well for you and me to get the facts as they seem really to be, in order that we may know just what the problem is with which we have to deaL Theten billions of ddiyt due us firom dvroad is government debt To that must be added soon, if not at once, the amount of a hiUion and a.half dollars, bemg ^HMraodmately tbree years* hiterest on this great sum, which it is inrobable we shall fund for the nations abroad, making the total government loan eleven billion five hundred imllions when so rediOBed. To that must be added an accumulating balance at the present rate of four billions per annum on merchandise account* mak- ing a total of fifteen and a half byiions. To that further most be added another biUion by reason of the diflference of exdiange of which I have just spoken. So, if wo stata the proM^ as one whidi involves the earlier or lat^ meeting of obUgations of at least fifteen billions, we shall know pretty well wh^t we ham to fim.'* Mr. Albert E. Janssen, Director, National Bank qf Belgfum; Prqfesior, University qf Louvain, Belgium. **What we must have in the future is long-time credit — ten to twenty years. As late as February, the exchange rate on the dollar was five francs sixty-six. It mounted to as hi^ as nine francs, and now is about eight francs fifty, which is a 70 per cent increase over the normal rate. Uncter such condi- tions, it is natural we should buy in the United States only the raw materials and food products which are absolutely needed by us; for the reason that the inciease of 70 per cent in exchange rate is equal to a 70 per cent export tax which slu^uld be imposed by the United States on exports to my country. We are all interested, you eaad we, in reducing the price of the dollar so that trade may get back to normal. The only nMMs by which the pcioe of the doUar ffw he le^uoad INTERNATIONAL TRADE CONFERENCE oonrists in the credit which the Umted States ehould allow to Europe for some years. You must do today for us what we have done for you in the past." Mr. J l recfcti i rlrfig Lmg, AmiOmni S&am$arf, Ik fmiu m m €f ''Today thoreiaadifferaMe. Our Mfe ie complicated. Our commerce is intricate, and its channels vary. We produce m<»re than we need, but not all of the things we cooeiBiie. We export mndi and knport a variety of the products other lands and of other cUmes. Such things as balances of trade have come to the intimate acqpiaintaiioe of every banker and every large producer, and have made it the con- cern of each that good relations of one government with 0th» govemments shall be cultivated mai maintained. Dij^kmacy has been popularized, in that its practice has a direct bearing on the ordinary aiFairs of life. ''AH this demonstrates condusivdy that the isdatkm of former days — a condition which prevailed in every country — has been exchanged for a national interdependeooe. The isdation was physical. Space and the lapse of time created it. The interdependence is mechanical, for by such agencies have qiace and time been reduced in conseqimice. The very processes of reduction have«ade it the concern of those who are most affected by it, and the mien who do the bartering and setting and tranqMMrting, the dealers in eidiange and. the more numerous producers, the spinners and toilers, are brought face to face with diplomatic situations which may affect adversely thdr means of fivdihood. "Today it is a matter of business that there shall be the fewest possible number of disturbances to prqdiiiliin and to oommeroe. It is equally a matter of business, and for business men, to devise that conditions at home and abroad shall be soch as to keep qpen the mml p r o c es ses of prodnctioii and trade. Labor and capital have an interest in common with the government, for each will be affected in the same degree." 26 WHAT EUROPE NEEDS MOST Mr. Hommr L. FcrgiiMMit JhmUmU» Ommkm of Commmrtm 9§ the VtHted States, PresklerU, Nei^pori Nem SU^uOdlmi Com$^ pany, Newport News, Va. ''We have asked you hm to meet business mm from all over this country, representing every line of industry, and you are here to discuss with Uiem our mutual problems — not only yours of Europe, but ours of America. We feel sure tfiat tbegreat tisskof gettingthewiMrld on its businessfeet again is no greater than the task which has been met. It cannot be more difficult than the tremendous struggle we have gone through. All of the forces ot govemments and all of the credits of gOYemnmits were enlisted to save the civiliied world. To do this the governments dropped the reins of business. These governments are now attending to their normal functions, wad it remains for the business men of the world, as rqiresented by your Missions and by the men come here to meet you, to help get this old world of ours back again into the normal paths of peace and of production. ''We hope that in our relations with you aod in our inter- course wilii you, to typify, in some small degree, the vfini of our soldiers who fought with your soldiers and showed that, even though their languages and national training and circumstances might not be the same, yet, when the minds and hearts of men are united by the same purpose, they can work together for the common good of aB and win in that way the triumphs of peace as well as the triumphs of war.*' 97 s INTERNATIONAL TBADB CONFERENCE • III Helping £urope to Buy **There is world-wide scarcity of capital: for jii>e yews Ike world has devoted its energies to the destruction of capital.*^ Mr. C IBsdtfoirdp Chakmmn, Emeutius Omnnditm €f Cm-' /MfMt; Chairman, Standard Oil Company, New York. ""This oonfcrenoe, if it aooomplishes nothing else, will, I hope, result in giving to the business mea of the great nations hflfe iqpresoited BMxe than ev«r befon a A lealizatkm tJiat business in the future will call for the highest standard of efficiency and co-operation, will make for tiie destruction of ignorant selfinhnew and merely personal profit, and will be recognized to have succeeded just to the extent that it makes men of all i^tVm realize their inter- depeiidenoe one upon the other, and acts upon the faith that an intelligent self-interest commands upon the part of each of us an active regard for the happmeai and wMn of every land on this sindl earth. ''At a critical moment of the war, Ckmencean said that victory would lie with the side which hdd out the last quarter of an hour. But at the moment when the armistice was signed Chwadame, another Frenchman and an authority on international rdations, very aptly remarked: *The last quarter of an hour is b^inning now/ **Tlie end the war has been only the beginning of strife and we must face the problems as they come with stead- fastness, courage, and with an open mind in the realization that only those nations can remain or become great who are willing to face and solve these problems and who do not hesH tato to endure m order that find success may be achieved/' fg HELPING EUROPE TO BUY Mr. Myrni T. HsrHck, Chairman, Union Carbide and Carkan Company, Clov^kmd, Ohio. ''The establishment of im ii^emitional credit sygtem is absolutely essential for the restoration of the world's economic equilibriumu Without the aid and co-operation of the United States this cannot be accomidished. Inthesdu- tion of this problem, the United States is as necessary as she was in the wmimig of the war. "We were late in recognizing our manifest duty then; let us compensate now, as far as possible, for our tardiness then. Let us not delude omselves as before with the idea that what we do in this direction is simply helping Europe, for it is just as necessary for our proqierity weU4wng that this eeonomic stru ctu re be restored— -not mily restcned, but built on new lines — as it was for the war to be won. 'VBut the proiKisltion to be laid before the AnMnbm peopfe by the Convmtion has a far deeper significance than a mere banking proposition. The rearing of this new credit struc- ture is just as mudi our job as it is that of the nations so ably represented here. Our stability and our future prosperity depend upon it. We have the resources, thi" brains, and we have tike patriotisBL What we need now b organization and quick action/* Mr. William G. Hardini, Gayemor, Faderal Meserm Board, Washinffon, D.C* ...» - « * '"The Federal Beserre Board appreciates the importanbe from every point of view of promoting our foreign trade, and believes that the banks of this country generally understand that longer credits than can safety be granted by banks are necessary if we desire to export our surplus of essential com- modities. . Under the Fedual Beserve Act^ national banks having a capital and surplus of not less than one million dollars are authorized either to establish branches in foreign oonntiiea or to take stock to the extent of ten per cent of their capital and surplus in banks or corporations prindpally 29 INTERNATIONAL TBADE CONF£B£NC£ aigaged in foreign banking. Under a raoent amendment to the Act, all national banks, regardless of their size, are authoriied ta subscribe not more than five per oent of their capital and surplus to the stock of corporations principally engaged in such forms of financial operations as are necessary or oonduoive to the export goods. *'The Edge Bill, wUch has recently passed the Senate and which has been reported favorably by the House Committee on Banking and Cifffency, provides Idr the Federd tion of foreign banks and of corporations to finance foreign business. The latter are authorized under the terms of the biH to issue their own obligations or debentures against securities acquired abroad which they may offer to the investing public These corporatic^is will be under the gen- eral supervision of the Federal Reserve Board; as thdbr funds will be drawn directly from the investment market, their operations wffl not inqpair the liquidity of the assets of the Federal Reserve Banks." Mr. DmMidco Gidoni, R ipMmntuH f m ci Italian Traaniry In VmUad Smm» Nam Ywrk. ''The state of exchange is one of the gravest problems of I)eace. It pictures graphicaOy a naticm's finandal condition, of which it is the most visible sign. A depreciated exchange is directly iiqurious to a ooimtry in its oooomardal relations with other countries whose exchange is at a premium. When the rate of exchange passes the 'gold point' and there is no possibility of meeting external debts in gold, so as to bring exchange to the normal, a further depreciation cannot in any effective way be halted. 'There is me initid cause for tiiis depreciation below the 'gold point,' that is the inability on the part of the country wUdi has depreciated currency to pay its foreign debts either in gold or commodities ctf trade. Hie degree isi de- preciation depends upon material and psychological factors. The material fMStors are the amoimt of p^ier currency and SO HELPING EUROPE TO BUY gold reserves, the country's d^t» its balance of trade. Hie psychdlogical factors are the valuation of economic resources, political and social conditions, latent national foroea, the forecast of future proqpects. **This is why countries which are all equally unable to settle their foreign liabilities in gold or goods, and so are all technically on the same monetary plane, still differ in various degrees from the depreciation of their currencies. The pound sterling, for instance, has dqmciated mnch less than the franc, because both material and psychological factors are favorable to England, where a rapid return to the normal is more certain. Conqiared with the poud stetlmg and with the fraiic, Italian exchange has fallen to a lower level becau3e of certain less favorable factors." Mr. WUHam C. Rad^kU, Sacratary, Departmani of Oatmmerce, Wasidntton, D,C. '"How are we to deal with the core of this whole problem? That core is this: To help others who owe us large sums into a position-where payment will not be burdensome, and mean- while to provide them in addition with the thousands of things they need but for which at the moment they have not the means to pay. That is a problem worthy of the very best thought of the American business man. Consider, that at the opening of our part in the war two years ago in April, there were considered to be but three hundred thousand investors in securities in the United States, and that over twenty-one million persons becune subacribera to Liberty Bonds. That was a revolution in thought. Now, just such a revolution in thought has yet to take place in the business circles befcre we shall get the means of dealing adequately with this fraternal problem. We have not been accustomed to buying the securities of foreign lands, and these is no to educate one hmidred and ten mOlicm people. The prob- lem is too urgent; the needs are too great; they are here. We have got to do something far more elective than that. SI INTERNATIONAL TRADE CONFERENCE ^It has seemed to me that a new organization mmt be created, or organizatioos one or more of a kind, as yet novel to oar {Kility, but yet glowing aotm^ I do not wholly agree with some of my wise and conscientious friends when they say that our banka are able to deal witb it. I doubt it ibmt is either correct, or wise. What we must do if we can is to bring the entire credit-giving power of the oountry to bear on this pfobkia. We plaoed our gieat loans because every household became a partaker in them. We must place our great credits on the same principle. I hope #e abatt get an oiganiiatkw whiA shatt conribine within the bamker, the manufacturer, the merchant, and every other group of our people, which shall represent the whole round qshere of American Kfe and American econoniiic power. Because it does that, it may be made the center of an appeal in every village in the country, and in that way we can get the very heart and mind of the United States with you and for you." Mr. W. a Waii$, FmsldmU, Win$ Nmikmtd B&nk» Si. Loub, Mo. ' ' Eurqpe lias hem used to a low intmst rate at home, and it C(Mnes with a distinct shock to many of the finanders and industries of Europe to learn that higher rates must be paid in the United States. 'Mm rule is that interest rates in rap- idly growing countries are high, and that in rich and well- developed countries they are low. A borrowing country, too, must eikpect to pay mora tor money obtained in a foreign country than the rates ruling in the loaning country. An investor naturally imfers to place his funds at home. Interest rates and security bdng equal he will invest at home. He will invest with corporations with whose personnel he is ac- quainted and with whose operatiom he is iuny^ It is an inevitable economic fact that a borrowing country must pay more than the market rate for money on a large scale. ''Further, there is a great* world-wide soardty of capitaL The world has devoted its energies for the past five years to HELPING EUROPE TO BUY the destruction of capital — Europe has done it and we have done it. There is, therefore, an iinp«y^f4ffltf^ Am^nH for capital in the United States, and interest rates on long-time investments are correspondingly high. The rates which must be offered American investors in connection with European investments must be high enough to tempt the additional saving which will be required if America is to supply capital both for her own and European neechu If we want the inves- tor to save more than he is now saving, we must offer him additional inducement to do so." * /rniat Hop€ Shnpion, Managing Director, Bank of Liverpool, Uverpool, EngkukU "And now that the curtain has been rung down on the war, how do we stand in Great Britain? Our pre-war national dd>t was about three and one-half Inlliaa dollars, ft is now thirty-eight billion dollars. Of this we owed at the beginning of the war nothing abroad. We now owe seven biUioo dcUaia. But against the seven billion we have to set this fact: There is owing to us by our own colonies and by foreign countries about nine billion dollars. I am not authoriaed to say any- thing on behalf our Government, but speaking as a citizen, a private citizen of the British Empire, I do not hesitate to say that while we shall require tune to pay our debt it will be paid. The nation is determined to set our finances in order and to foot the bills, as was said in our House of Loids yesterday, the nation must follow the road of sacrifice and hardship, but in the road to honor and safety. ''Finally we are faced with very heavy ti^x^tMMi. I thin^ that every (me in England will be poorer than he has been. At any rate, during the rest of my business life I cannot see any chance of relief for the taaq[Miyw. But I feel that if we are to OBurry out as I know we will, what I have called the setting in order of our national every one of theae tasq^yera will have to bear a greater burdm than he has ever contemplated, and a greater burden than he cw with 3S INTERNATIONAL T&ADE CONFERENCE oomforlbe«r. HoifVWt it wiU liave to be iMXiie and it will be borne, I hxsfjpe^ with lAeerfuIness and resignation. "'Sununing up the whole thing — ^I try to make this balance- dieet in an infomal way— ^aniiiiiiig op all, I think it comes to this: That we are justified in the strong conviction that we shall recover from our war damage, that we shall recover faiily rapidly; but it will entMy depend, as Mr. Alexander said, upon working and saving upon the part of individuals. I fieel with ooniMience that a country which has already paseed through go niany severe criees win not soocnimb to th^ crisis and that we may look forward with couiideQce to our economic future." Mr. James S, Alexander, Chairman, Conference Committee on Credit and Finance; Fre$idmt» National Bank c|f Commerce, New York. ^But we know our friends from Europe well enough to believe that they very generally recognise the fact that it is best for them to get money on a basis that is determinable and permanent. Our good-will insures our making every possiUe ^ort towards reaching a speedy solution of present uncertainties. But the solution itself must rest not upon a basis of sentimrat» but rather upon a foundation of economic fact, of common sense, and sound commercial practice. **The nations of Europe want credit; but they are not seek- ing primarily credit for today, but rather a ftmdameotal credit understanding, a system of credit which they can trade upon and make commitments iqxm. They want to know they can count on hdp based not upon a generous impulse <^ the moment, but upon the more permanent, if more impersonal, desire of men to trade with one another on the basis oif mutual profit and satisfaction. This is a staff they can lean upon. Any commercial arrangement grounded solely upon the un- commenaal and shifth^ element of good-wiU and fi^^ timent no matter how firm and true that sentiment may be, will in the end prove unsatisfactory/* S4 HELPING EUROPE TO BUY Mr. Dwight W. Morrom, J. F. Mor^ U Gatngm^ Nem Yarlu ''Can the people of this country extend $2,000,000,000 of credits to Europe in a single yearP That, to my mind, involves two distinct questions: First, will the people of this country have that much capital to lendp Second, will they be able to find people in Eurqpe to whom they are willing to lend itP ''The first questicm is fimdamentally a questioii oC our own ability to produce and to save. The central figure in that part of the problem is not the manufacturer as such, nor the producer of raw material as such, nor the banker as sudi, but the man who saves. '"The one fundamental thought that we must hold on to is that while there will be many min(»r actors in the great enter- prise of the restoration of Europe, the indispensable man in that enterfMrise, the hero of that ent^nP™e, will be the plain, old-fashi(nied man who spends less than he produces and thus creates the fund without which all of the plans for res- toration of Europe must come to naught. He may be ridi or he may be poor. He may be a banker, or a merchant, or a school teacher, or a wage-earner. But he must be a saver. For it will be true in the future, as it has Yueea in the past, that there is only one way for the capital fund to increase, and that is by the accumulation of savings." Mr. N o r man Hm DawU. Frwtidenim Truet Camaane id Cukm. Nem ¥otk. "'The foreign exdumge situation, of comrse, lias increased the difficulties, but that is a question that cannot be properly settled by abnormal and economically unsound methods. It seems to be the general impresslcm that the present low rates of sterling, firanc, and lire exchange have been caused by the sale of exchange for dollars required to covar purrhsaes hers. Such is not the case. England, France, and Italy have, up to the present, covered most, if not all, of their purchases here with dollars obtained thvoui^ credits, and not by the safe I INTERNATIONAL TRADE CONFERENCE of their exchange. The United States Treasury has, since the armistice, loaned to the Allied gOYemments approximately 12,500,000,000 to oo¥er their oommitiimits and pindiafles in this country, and the War Department has sold to them on credit materials to the value of about $S00»000»000. *"Tlm assistaiioe has gone far tofwaid supplying their urgent requirements and to carry them through this transi- tory period, and has aided most materially in avoicfing the necessity of selling their exchanges for dollars. The present low rates in their exchanges, therefore, have not been caused hy the pnrdtiaae of dollars, but by the sale of theur exchange for other currencies. The present rates of exchange reflect the sales of exchange in other markets, a liquidation of neutral balances during the war, a certain amount of dis- trust in the world's poUtical stabiUty, a considerable deficit in the present trade and financial balances, and a cortain inequality in dixnestic and ftrj ^Tirj^l ccxiditicHis.** 86 WHAT'S BACK OF EUROPE'S CREDIT? \ IV Wliat's Back of Europe's Credit? ^^IJ you want to know what a nation will do when put to a testj ask what it ha» done in the part* Even obtuse Germany knows that.** Mr. Dwight W. Morrow, J. F. Morgan & Company, New York. When we think of a Europe with much of its accumulated savings gone, we must not forget that, with the war over, char- acter and cafMMaty and skill in organization will still be the qualities by which the worth of nations will be judged. ''Have the nations of Europe that character and capacity and skill in organization which will attract our increasuig suppUes of accumulated savings? Can any one of us who is fandliar with their whole history doubt itP Can any one of OS who has watched thdr conduct during the mcMre than four years of war doubt it? In my opinion the same energy and capacity that they have shown during the war will be directed to the performance of the great task that confronts them. 'They come to us now, not seeking charity on account of their weakness but asking us in our strength to co-opmite with them in their strength to rebuild and restore their pro- ductive capacity. Their own capital fund will be gradually restored by fresh savings and — ^what is more those savings will be protected by their own free govern- ments. The same courage and energy and thrift which will create and protect their own savings will attract and protect savings of foreign countries/' Sir James Hope Simpson, Managing Director, Bank of Liverpool, Uuefpooi^ KnglamI **With regard to the general conunercial conditions of Great Britain: We have lost five years of economic development of the ooontry ; for five years tiie otdSmary rciplaotiwent cl woro- »7 > INTERNATIONAL TBAD£ CONFERENCE oat materials, madunery and so on has had to go by the board. The replacement of merdmnt ships has had to stand oiVir. The savuigs of the peqple which would, ui ordinary course, be devoted to the development of eommeraal enter- prise have had to be devoted to wartlike enterprise. But against that groat km we hare to set the groat incroase in the class of machinery required for the manufacture of mu- nitions of war and an increase in the machinery in our textile fact^NMS. I think, on the whole, it may be taken that the increase due to war requirements is a good set-off to the idiseiloe of the usual eccmomic saving and devekyme n t. **Then we lost some of our fmagn mvestments; and cor loss was your gain. It is estimated that at the beginning of the war we heU about tw»ty faillkm doyars' worth of forai^ investments, but we now hold only fifteen billions. Inas- much as we used the interest on those investments to pay for hnports abroad, to that extoit we aro arq^ded for the future. We had a vast rise in prices, including the prices of raw materialst machinery, food and clothing. It led to an enor- mous disturbance m tiie wage market. It led to the very vital consideration that everything that we buy abroad in the form of law materials has ridsed the cost of production against us. But now that we aro actually manufacturing and getting again into the export markets we shall gain a corresponding rise in the prices we shall obtain for our eiported goods. •*We had an enormous loss of shipping also, not only by natural causes, but by German submarine attacks. When you leaKae tibat sliqn^ ^ ^ ^ ^ ^"^^ realize that we cannot sit down under that loss. Already our fKl phiiilHing yards aro full of new merchant steamers in process of ccmstruction, and we hope in oonrse of time to overtake the terrible losses which we sulFered during the war.'* Mr. Alfred C. Bedford, Chainnan, Estecuthe Commiitm 9$ Omi- ference; Chairman, Standard Oil Company, New York* Strange economic conditions confront us on every hand, . bul we oamiot he suifmed to find that this great wnr, fike S8 WHAT'S BACK OF EUBOPE'S CBKDIT» other wars, has encnrmously displaced the ratio between conmiodiUes and money, reducing the supplies of commodities and enormously augmenting the pap^ currency and deposits set off against them. We have to deal with the outcome of this situation, which, as was inevitable, is high prices, or rather one (tf the fumfamMntal causes ctfhie^prioeB. Itseems to me that much of the success of our efforts just now wiH depend on how we regard this stepchild of the war. "You are probably familiar with the annual review of the Swiss Bank Corporation for the year 1918, which in its sum- mary shows that, leaving Russia out of consideration, the note circulation of the belligerents increased during the war by 447 per cent, which during the same period their gold reserves increased only 45 per cent. "To me the existence of this great mass of paper currency precludes the possibility of a rapid fall in prices, even if such a trond woulkl not find fonnidabfe dbstades m tte of national debts and the determination of labor to keep wages high. High prices may be regarded as a symptom of unsoundness, but we can all appredate the danger wfaidi would accompany any rapid fall in prices which would cause goods to sell at less than they cost and the r^yment in dear money of debts which had been contracted in cheap numey. For these primary reasons, it seems as if we must be recon- dled for the time to a dianged vahiation of moi^ ourselves to a permanently higher level of prices." Bman du Marais, Vice-Chabrman, Wranch MMom IMroctar* OmMi Lyonmde, FmH§, Vrmme* "Several weeks after the signing of the armistice, I met one of our best-known generals. As he knew the terrific strain which our country had undergone, he asked whether France, victorious in arms, could still muster up su£Bicient strongth to bear the financial burden that five years of con- tinuous warfare had imposed upon her. I simply replied: " 'During the most trying days of the struggle you never doubted your soUisfS. The signing of the anustiee haa not INTERNATIONAL TRADE CONFERENCE ended the war. It has menly tnmqKMed the field of battle. Why not have the same confidence in the worker of France as we have all bad in the soldier at France. He is one and the same man.' Mr. Mymn T. Herrick, Chairman, Union Carbide and Carbon Ctmi pmy, Oevekmd, Ohio: Jonnmrly Ambassador to France. "You ask, 'Is the credit of England, France, Belgium and Italy good?' Yon inquire, 'What is their collateral upon which to base credit?' The late J. P. Morgan once said in a great financial crisis that character was the best collateral; that he would not accept the best material collateral indees it was backed by character. Mr. Morrow, who sat at his feet» told you last nic^t that character was the best collateral upon which to base credit. This has beonne an axiomic truth. In fact, it is afiBrmed and understood by all bankers. Permit me to inventory to yon the collateral ctf ered by our aUies of the world war. ''When the lire of the world was focused upon Belgium, when the German Army, forty years' carelol, siaiBter building, rushed her border, the value of your Belgian collateral was then tested. You witnessed the reincarnation of France and England. True to thcaor history they have shown you what they could do in war. Is this not an earnest of what they wfll do in peace? "At the beginning of the war, Italy was bound in national alliance with Grermany. When the malevolent designs of Germany were disdoeed, she broke that alUanoe and joined the Allies. The Italy of Cavour and Garibaldi, the Italy of today needs no endorser of her note. '*If you want to know what a nation will do when put to a test, ask what it has done in the past. Need anyone ask what Belgium, Italy, France and Enc^and have done in all thecmturiesP Fot the purposes of character credit, you need only know four and a half years of their history — ^and even obtaiae Geimany knows that!'' 40 WHAT'S BACK OF EUROPE'S CREDIT? Mr. Ferdinando Quartieri, Chairman, Italian Mission: Presi" dmu» ItoUan ChmniaU Ituhutriei Cofporatkm; MUath iUU^ ''Before tbe war Italian industry and thrift had placed the economic life of our country on a solid basis and ianned its steady progress. The rate of exchange, constantly at par, was the best proof of this. A careful study of the situation win, I thnik, show tlmt there k no reason why we diould not again stabilize our position. ''In studying the items which now turn the balance of that they fully justify IIILI trade so heavily against us, we confidence in a rapid economic recovery. The excess of im- ports is accounted for mainly by raw BMterials for which there used to be but a limited demand but whidi our new factories now require to transform into manufactured goods whidi Italy formerly imported from Eurqpean countries, mainly from Germany. As for our food imports, they wfll gradually be reduced now that our men are retumiog £rom tiie armiei to the farms. "Our industrial development and our agricultural revival therefore justify the belief that in a few years' time the balance of trade will once more be sudi as to make Italy the self-supporting country she was before the war. She will then be able to pay off the dd»ts she has iocuired with foreign countries without being unduly hampered by excessively high rates of exchange. She is convinced that her co-opera- tion will be as valtMble to her fldlies in the industrial qphsre as it was on the battlefield. She is confident that with your help she win be able to devek^ more fully her resources and to IIIU ner abundant supply of employment m her own ootantry for h labor, the value of which you will be the first to appreciate. ''It is this lalxNT which awaits your co-q[>mition to become a bountiful source of wealth and prosperity to the whole world. If your co-operation does not fail us — and it will not — the Italo-American understanding will yet enable us to wrile jointly a page in the annals of history not unworthy of the oouD^ries of Washington and oi 41 1 • INTERNATIONAL TRADE CONFERENCE m. W. a. WmiU, Fmikhni , Fini mHomml Bmnk, Si. UmU, ifc. 'The wmMucM of Enfope are very great ancU bdng wmkf handled, will pull Europe out of its difficulties. But we must not reckon these difficulties lightly. Against the assets there are heavy Ittibilitiee. Floanoe and currency are in grave disorder in most of the countries of Europe. The volume of production k low« mqiorts have been mormous and esq[>ort8 have been small. Hie burden of ddbl, bodi internal and external, is very great and the volume of taxation is far from adequate to meet the eodsling conditioiis. *'The European currency situation is distressing. It is, of course, closely linked with the public finances of the Govern- ment. GoM redemption in aU beUigerent countries of^Con nental Europe was suspended when the war began, and they went at once on an iiredecgnable paper money basis. The value of irredeemaUe money is at best an uncertain thing. Sound currency divorced from immediate redemption, dkectly or indkectly in predoua metals, is an inqpossible thing. The value of such currency goes up and down wifli the credit of the government, and the prospect of redemption in gold. If the vokme of sudi paper money is very great the prospect of gold redemption becomes remote, and the value of the paper is at the m^rcy of speculation, rumor, political occurrences and social agitati(m.** Mr. Albert E, Janssen, Director, National Bank of Belgium, BnmeU; Prqfessar, University qf Louvain, Belgium. "I know that credit must be based upon confidence. I wH say to you that you may have confidence in Belgium. Bolshevism cannot exist in a victorious country— with our free constitution and our democratic institutions, the oldest on the Continent. We rapidly getting back our old stride. We have a great division of property in Belgium. The farms are nearly all very smalL Four hundred million dollars are dqpotfted in the savings banks of Belgmm, wiiich have three million depositors, mostly of the poorer classes, out of a WHAT^S BACK OF EUROPE'S C BE PIT? popuktion - lems seems to demand as a chief element the maximum of industry and thrift withm the nations; it calls for the restora- INTERNATIONAL TRADE CONFERENCE taon of a gmter d^giw of eqaiyfarimn in the oommercial ioterchange between the United States and the countries of Europe; the cessation of our Govenunent's fiiHMMw>|^ of foragn prndmam hⅇ the enoooragemrat of private enter- prise and initiative in place of government assistance, and the provision of a largo: measure of kng-tune credit to finance the foreign pordlmees of American goods until such time as Europe can pay for what she buys approximately by what she sends us in the fofm ot products.** Mr. Domenico Gidoni, Representative qf Italian Treasury in United States, New York. ** It is, of course, impossible to guess how long the economic disorders produced by the war will last» and when the ex- change situaticm wiD be restored to the normal. There is no precedent in history for this war. Before it the slaughters of Cffisar and Niqpoieon pale in memory* ^'StiU, there is one positive reason to hope for the future — the energy and economic resources which the peqple of the world leveded ki the Um of the crisis. Bismarok in 1870 tiiought that he had reduced France to financial impotency for at least twenty years by imposing on her a wv mdem- nity of 5,000,000,000 francs. But France paid the entire debt in about three years and within two decades loaned Russia far greats sums. Spain, on the brink of bank- ruptcy after the Spamsh- American War of 1898 completely re-established her financial position in a little over ten years. 'These precedents are not ncaHed to dednoe fitmi them a prophecy of an easy and quick return to normal conditions. The economic crisis and tests that must be met aie f ull of difficttltieB, but we have a growing assurance that Italy, just as she won the victory of war, will also win the victory of peace.** 46 LABOR'S ATTITUDE OVERSEAS V Labor^s Attitade Overaeaa **The abuse made of the words soeialization and nationalization has brought about a formi- dable reaction in public opiniorC^ Sir JrnnM Hope Simpson, Mmia0nt Dtmcim, Bmk €(f U wrn p o oi, ' Lherpoot, Mniland: ''I would like to refer for a moment to the labor unrest in England. We find ourselves, owing to the war, in a v&cy difficult position in regard to labor. I will not cover the grouid which was so well covmd yesterday by Sir Arthur Shirley Benn, but I would like to confirm from my own ex- perience and inquiries that what he said when he said that in spite ol all the strikes of which you read, them seons to be growing up a distinctly better feeling between masters and men. There seems to be a recognition on the part of labor that lestnction of output is a national calamity, and a reoo^^ nition on the part of the employer that the workman must have a greater share than heretofore in the profits of his work as well as greater opportunities to enjoy the social advant- ages of life. ''When you get that attitude on the part of berth cosplofyer and the employed, I do not think it will be beyond human skill and wisdom to find a means of solution to the difficulties which still confront cor country . Of course, we hava had w awful loss of labor through the death of so many young men, but we have discovered a great reservoir of strength in the torn oi female labor. When you take that into ocmsideration and add to it the fact that we are well equipped now with machinery of all kinds, espedally that we are eoqploymg more automatic machinery than we did before, I do not think we need to be anxious in England about the future of the labor problem.'' 47 INTERNATIONAL TRADE CONFEBENCE ^^l^^'^^'f^!^ Hankar, Chairman, Belgian Mission; Director, National Bank of Belgium, Brussels. •Tn op^g this Conference last Monday, Mr. Bedford asked: 'What are the menaces to social order aad stability in the different countries in Europe today? Have the dangers of Bolshevism or Sociahsm passed? Is there any danger any- where of the confiscation of private property, the non-iecog- nition of the rights of ownership and business management or the annulment of law? ' "To the first and seecmd questimis I will say that there is no trait of Bcdshevism in my country. Our people are resUess and m many cases dissatisfied, it is true, but what people rendered homeless by war and facing th^ problems of life lesultant from a great war would not ber' But that does not mean they are indined against lawand order or aie Bolshevik intendracies. *Xet me assure you also that there is no danger of confis- cation of private property, non-iecogmtioii of the rights of ownership or annufanent of laws, which fundamentally depend on successful reciprocity in commercial intercouiae between Belgium and the nations *'la undertaking the great task of economic reconstruc- tion, an imperative duty is imposed upon tiie people of Belgium. They must stand united to produce. Production mnst be the ruk of alL There must be strict eoonomy on the part of individuals and the govemm^t. It is necessary that we produce to the maximum of our power and consume as little as posnble so that oar eaqport trade may grow rapidly and the returns from it meet the deficit in our payments on international debts. *'That is the fundamental principle upon whidh industrial and commercial restoration must be based in our country. 51 INTERNATIONAL TRADE CONFERENCE whose sources of production were so rutlilessly destroyed by Atbkymim. WearoiioteasilydiMoaraged* OntlMcon^^ we have confidence in ourselves, in the industriousness and thrift of all Belgians, characteristics which the people of Bdgiura evor have posBesBecL Oar oomitry wfll rapidly recover. You have proof of that in what we akeady have fif )^y >iif^pl{i|li 4^ i^iiAA the aimislioe* "We hope and firmly believe that ten years from now, when Belgium in 1930 will celebrate the glorious centenary of its indepeodenoe, we shaU show anew to the world, as we were able to show in August, 1914, what the energy and the devotion of the people of Belgium can do to make a pros- perons and progresshre natioiL'* Mr. John H. Fahey, Vice-Chairman, Executive Committee of Conference; St. Johns River Shipbuilding Company, Boston* "The aftermath of war in some of its aspects is quite as terrible as the struggle itself. The death of the sokUer on the battlefidd, whm he gives all for love of country and hu- manity, is one of the most inspiring things we know. The toll of death which eomes from battle is qiectacular in extreme and quickly impresses itself upon the mind; but as a sequence of war there are tragedies quite as terrible but less appreciated. UndflfiMmriahnient^ starvation and disease denamd this awful tribute from the war-swept countries and those affected by its ravages. The process is slower and more subtle, yet it may be no less destroctive in its results. It is not death and sorrow alone that are involved, but the threat to all we hold dear in life as represented and protected by modem civiliiaticm. "Hopeless men, unable to work and to secure food and shelter tor their f amilie»-4okUers who have risked every- thing in the zeal of patriotism for the benefit of their fellows — quickly turn in despair to the belief that the Amt^t^g iocial order imsl be wrong wUiA takes no cognisuee of their sufferings or brings to them no adequate rehef . Men who M LABOR'S ATTITUDE OVERSEAS are starving, men deprived of opportunity to work, can hardly be patient and f (urgiving. The issues which brought ns into the war, theref(»e — freedom, justice, the mainlenanee of civilization — are just as much at stake today as they were in the qiring of 1017 when we plunged into the stmg^'V Mr. Homer L. Ferguson, President, Chamber of Commerce of the United States, President, Newport News ShipbuUdiilig Com" pMf, Newport News, Va. "Production of commodities in factories and mines and the carrying on of the transportation which Is vital to pro- duction — ^this is all just as essential to us as it is to our friends across the sea. While we are discussing labor troubles and internal dissttisioiis, it is just as well to wmemhwr thai labor troubles follow upon industry; they do not precede establishment of business but fallow it. Without businesSt wiihoat manoliBcturing, time can be no labor tronbles. "We believe that here in the United States, without our foreign trade, without the safety valve id our foreign faisiness, our enormous production not only (tf foodstuffs but (^manu- factured articles would recoil upon us and our labor troubles, seiioiis as they are now, would be magnified tenfold by an over-production here of manufactured goods and by unem- ployment. We are just as interested, therefore, in keefung op our foreign trade as omr friends in Europe. Onr infernal affairs, our labor troubles are not only deeply influenced by simihir conditions abroad— there is an intimate connection— bat are also influenced deeply by our conuneroe with oar friends abroad. We depend vitally upon the continuance of that commaroe." Mir. Breckenridge Long, Assistant Secretary, State, Washington, B.C. of **The sinister consequences of the conflict through which we have passed permeate aU lands and all conditions of life. Devastated viUages, barren fields, the anDumbored graves of INTERNATIONAL TRADE CONFERENCE those who gave their lives for a cause or who died in war's maelstrom, are visible and accountable reminders of the great dertmctkML But the amMtmral purpoees to which bar best manufacturing efforts were directed under the necessi- ties of 111^ 1 disturbance to political institutions and the impairment of CM^Bdfiice, these and many others are not disoernihle by the eye, nor measurable by set standards, and are consequently appreciated with diminished understanding. *'Yet, these and smiUar matten are the most qppalfing of the results of war. In the destruction of a village there is definiteness and esiactitude. It is capable of measurement in as to the coal mi Ml 111 Taioe. It 18 sosoqptftle of emet of reconstruction. If the village is destroyed, it is destroyed. Its status is oertauL The time and labor necessary to rebuild it can be learned. But, in the complicated industrial life of today the effect of a great shock is not measurable by any known method. The oonseqoeiices of the shocka appear inter- mittently and serve to magnify our fears, in the same manner as t^iose of the superstitious and ignorant— frightened by manibstations wUdi surpass their simple undendanding. Recurrences of disturbance in the economic and industrial worlds cause us anxiety, because we, too^ are ignorant of the trend of their development*' 54 FINANCING EUROPE'S NECESSITIES VI Financing Europe's Necessities Report of Committee on Credit and Finance urges formation of corporations to extend long-term commercial credits to ContinenUd countries THE Commitlee on Credit and Finance was invited to meet here to confer with business and fimncial repre- sentatives of England, France, Italy and Belgium, for a frank discu88]orts upon the {Hrogress of our Committee already have been provided tor the Chamb^ and we assume will be made available in proper time. For the present pur- pose and briefly, the following summaries are submitted: The Belgians need from us, first of all, money, then tools, coalt coke, (hI, mining machinery, raikoad locomotives and 63 INTERNATIONAL TRADE CONFERENCE lumber. Their representatives state that because of the imfinrcvaUe rate of eandiaiige and because of our higher prices, expensive freights and slower deliveries they probably will be obliged to purchase in Germany goods which they would mudi prefer to purdiaae fran us. They tell us that the work of reconstruction in Belgium is pr opeediug rapidly ; that their peofie have gone back to wodL in a gratifying manner; that the present working day has been shortened to eight hours because of pressure from labor, but the unit effidency is quite 19 to the pie^war standard. Itaiy Requires Agricuiturai Implements Italy's reconstmetioii proMem is principally agricaltaralt due to the fact that about 90 per cent of her people are engaged in farming. They need agricultural machinery in eonsidmMe quantities, also machinery for ditch-digging and drainage work. They also need assistance in the rebuilding and re-equqyping of their fishfiriee. Their need in the matter of housing is very great and they stress tiie importance of the employment of American expedients in rapid construction of workmen's houses. They need coal, oil and a wide variety of materials, in the jNToviding of which the United States should be able to play a most important part They also need eirtensive assistance in connection with harbor improvements. In general, their needs for our goods are oonsidmUe, and not the least of fliem is their need of money. England, as stated by their Reconstruction Supplies Com- mittee, has no reconstniction problem which , they are not fully qualified to take care of themselves. The housing of British labor was discussed at length, but without leaving the impression that we were to have any part in its sduticm. Their Committee also discussed most interestingly the labor conditimis in En^^and, and, in a gmend way, those existing throughout Europe. The impression was conveyed that the labor problem in Europe, while serious, will be EUROPE'S MATERIAL NEEDS solved, and that the radicd ekmei^ thoo^i active at present, must in time yield to the recognized power of law and ofder^ Ref^ence was made also to the general problem of financing the requirements S AD irf the foreign ddegations pointed out the difficidties arising out of the present acute exchange situation, which was fully reoogniaed by the American Comnuttee. The following resolution was adopted: That it is the belief of the Petroleum Committee that the petroleum industry of the United States w9 participate in any plan that may be worked out and will take its share of any type of international bonds or other forms of security created under such plan* A report in detail covering the proceedings of the various meetings will be prepared and may be had upon application to the United Stales Oiamber of CkinuMroe or tiie American Petroleum Institute. Committee on Chemicals T^EMOBILIZATION of war industries has been proQceding -^rapidly — particulariy in the diemk»l hidustry , which was so greatly stimulated during the war. Much of the chemical plant eqpiqpinent needed for war production has gieat value in peace times. This is especially true in agricultural chmi- icaU and dyestuffs. By a strange coincidence, plants and cannon eat the same food, and nitrogen compbunds, adds, phosphorus, potash and other alkalies and chemicals are basic commodities, both in war and peace. We are still forging swords into plowshares," as in biblical tunes. One of the difficulties of readjustment and use is that war needs stimulated a plant equi|»nent in certaiii lines away beyond immediate peace requirement, and years of n<»rmal growth have been discounted. On the other hand, c^dditional equips ment will be needed to round o^t development m peace- time lines which were held back by concentration on war needs. Before the war, Germany had a practical monopoly in several chemical lines, and as it is easier to buy than to make, other countries had not ig[>preciated the bapk) natwe of ch^nical productfon in its rdbition to national safety and its 77 INTERNATIONAL TRADE CONFERENCE peculiar ''key" poeitkm with regard to the making of many articles not at all rdkited in the piABc nund to dMBical production. War developments brought home sharply the need oC a telf-cfxitaiiied national cbmiical productioat and of an army of trained chemists. Since the war, mannfactuimf freqpiently supported by their governments, have been work- ing to ehsntfi over war plants to peace pioduotion and to round out the output to the end that their countries need not go abroad for the bulk oi their chemicals. National diemical mdependenoe is reoommended, ptthaps to an es- aggerated degree, for the reason that international chemical ixunmeroe is important. The two countries sending representatives of the ohemical industry to the Conference were France and Italy. The Fiendh pivpose is to develq[> f urthv and c(»npletely its chemical and electro-chemical industry, particular atten- tion bdng paid to dyestuib. Following a strike extending through the early smimer months, their (^anneal labor situation is satisfactory. Aside from the procurement of wood distillation prodncte, thero is little we could supply them« Wm Taktt M F^^h Wnmm am On th«r part» the main output hi tonnage and value will be potash from Alsace. The French ddegation was informed that the United States was prepared to take for the coming spring planting att the potash Alsace could ship; that a small importation was now being received, but that sti&es» interior tranqport and ocean shipping difiBculties had so far prevented any large movement The ocean ahqpping difficulties should easily be overcome as many ships are letnndng in ballast. It wm intimated that at least 50,000 tons of pure potash, contained in, say 200,000 tons of mfaBsd product, could be spared by French sources, for winter and spring movement, tf it coidd be shipped. War chemical plants are being changed over to peace OSes. FtodnctioB in considerable vohune would be secured 78 E U ROPE'S MATERIAL NEEDS as socm as necessary raw materials could be obtained. A large tonnage of American phosphate rock could be used but for the hie^ ocean freights now prevailing. Especial attention is to be given by the Italian Government to furthering the use of fertilizers in crc^ production. Mr. Qoartiari was strongly of the (^inicm that American capital could find profitable and helpful occupation in Italy in partnership with Italian chemical manufiscturers* and that it could contribute experimce, machinery and administration in the further development and rounding out of Italian dionical manufacturing. Italy possessed ine chemists, skilled engineers, good workers and relatively cheap electrical power. He stressed the fact that Italy intended to deYelq[> her dyestnffs and general dmnical industry to meet her own needs, and that she might be able to do an export business. Italy possesses sulfdiur, pyrites, salt and other raw materiab in abundance and woaM call for litde raw material from the United States, benzol being one of the exceptions. As to sales by Italy, there was not much we oodd knport beyiad that now coming here, such as citric and tartaric acid, etc. There was much of general interest discussed at these meetings, such as reasonaUe uniformity in contract terms, specifications and methods of analysis in selling for export. Committee on Textiles T^HE Textile Committee had the lurivikge of discusmg in *^an informal, frank and intimate manner with the re- presentatives of France, Great Britain, Italy, Belgium and Portugal, the problems of the re-estaWishment of the textile industry in order that the world-wide shortage of clothing may be remedied in the shortest possible time.. In general, the European nations have hem the manu- facturers of textiles for export, while until recently America has abso rbe d the entire production of the American taxtila ndOs, It was the desire of your Ckimnuttee to ascertain: 79 J I N T E B NAT I ON A L T R A D E C O N F E R E N C B FIrsI: Wliat they irelied on America to supply in the form of (a) raw materials, (b) semi-manufactured products* (c) mamifactured megrJlandiae, Second : What the real situation is in the textile industry within their own countries. Third: What exportable surplus they are now able to provide after caring for tbeir own consumer needs* Fourth: What suggestions or recommendations they would offer looking to the financing of sales of teartile prod- ucts which would be secured in the United States. A general summary o£ the views gathered by the Commiltee in the conferences indicated that practically the aeiy textile product required from the United States would be raw cotton. The large textile manufacturing plants of these countries have recovered their equilibrium, and home requirements have been met and a considerable exportable surplus pro- duced* Early in 1920 normal pre-war operatioDB will be established subject to (a) the securing of necessary raw material, (b) the adoption of a 48-hour week as against the 54 to 63-hoar wedL of the pre-war period. Cm Finance Cotton Importations In general the mills and merchants were amply able to finance thdr importatioiis of raw coMon even at the depre- ciated exchange since the world demand for textiles is great enough to absorb their entire product at prices which will cbmpensate for the extra cost Of materials. The Committee has drawn up recommendations for the Finance Committee based on the belief that d^eciated Mijiange fal a imrmm hardship to the importing country wh^ the product is to be consumed in the country. Conversely, tXKh it ii 10 much of a handicap to American ^dport trade when our products come into competition in the world's importing markets with products sold for currency costing the teyer iM than the American dolto 80 PLANS P£&MAN£NT CONF£&fiN€£ vni Plans Permanent Conference Organization Committee lays down the lines on which a permaneni internatim^ trade body should ' be formed and defines its functions nPHE Committee on Permanent Qrganiaation begs to mport ""-that it has given careful consideration to the subject referred to it and, by unanimous action, joins in making the following recommendations; I. Need — ^That the need of more comprehensive organiza- tion of the commwrial and financial interests of the various nations is imperative and that the present International Trade Conference should serve as the foundatiom m whiob to cnstract a pennannt organisation. II. Purpose — The Committee has adopted and recom- mends Hm UikmBg statsmtet of general purpose; To Promote and Co^rdmaie Trade SMottt The purpoee of the organizaiion is to promote inknudumat commerce J to facilitate the commercial intercourse of nations, to secure harmony of action on all international Viestions ineohirvg coinmeree and peace, progress and cordial relations between the countries and their citizens by the eo^peratim of business and the associations demled to thedenhprnerdof cornmereeandindaslry, III. Specific Aintf— Your Committee beUeves that theq^ dfic aims ^ the organimtion should be: (a) To create a permanent intiematiooal headquarters whiA wfll oentraUae all (d) To put at the disposal of all official organizations the reports and conclusions prepared by these t^J^n*^^^ esqperts and bosinesB OMn. Worn and Membership of Conference lY. Plan of Orgmwdumr^T^ Committee presents the following suggestions as the basis for a plan of organization: (a) This ofgamiation shdl oonsist ol the following ele- ments: (1) A board of directors consisting of two members selected by eadi nation. Intheeventof the inability of such cBiectors to attend the meetings, they shall be represented by an equal number of alternates. The board of dneetors shall have general charge of the business of the organization, supervision of its policies and direction of the activities of the intematiimal headquarters and its staff. It shall determine the questions to be placed upon the agenda for all meetings. (2) An international headquarters shall be located at the seat of the organization. One representative of each member nation shall be attached to the international headquarters* who diall be resident at the seat oi CMrganiiation. and may have such necessary technical assistants as the board of directors may determine. (3) There ahaD be a c orr es po n ding national bureau in eadi country, which will maintain constant relations with the international headquarters. (b) Tliis organization may indudie all countries that are ^ members of the League of Nations, but subiject to election by the Board of Dnedeit. « ^■■■■■■BiHBBaBBBBnaaBBBBBBBnBHB^ PLANS PERMANENT CONFERENCE (c) The membership of the (^^ganiieation shall consist of chambers of commerce, commercial organizations, banking associations, and shnflar associations, the votes of wUdi shall determine all questions of poUcy. Firms, corporations and individual bankers or business mra shall be eligibie to admission as associate members by vote of the board ot directors and under regulations to be prescribed by the directors. Such associate membera shall be entitled to receive the reports and bulletins of the organization and shall be privileged to attend meetings. (d) In any nation having a national board or organization of its commercial interests the members of the board of directors shall be chosen by that organizaticm. In countries where sudi national board or organizatmn does not exist, the plan of permanent organization to be later prepared shall reoommffafid some equitable method for choioe of dtreetora. General Conference Every Second Year (e) The regular meetings of the generd niemberridqp of ^ organization shall be held at intervals of two years, except that provision shall be made for the caUing of special meet- ings when necessary. At such international ccmferences eadi organization represented in the membership shall be entitled to send not more than five delegates, who shall have the privilege of discussing all questions presented to the Congress. (f) In taking a vote at the Congress each delegate shall be entitled to one vote. The vole shall be taken in the first instance by a show of hands and the questions shall be decided by a majority of the votes recorded; provided, how- ever, that delegates rqmsenting any two countries nuiy ask for a vote by nations, in which case any decision previously recorded shall be final if the resolution proposed by tbs mi^iority of the delegates is ratified by a majority of the countries. (g) In aU countries having a national board or organisation of the commercial and financial interests, the applications for INTEENATIONAL TRADE CONFEEENCE membership in the international organizatioii shffB ba pnimcid IQKHI and BffpKfvtd by the national board or organization. (h) The Committee on Permanent Organization ahftH cooaider, and, if posaiUe, report as a part of a pnmanent plan of orgamsatkn, some imctical method dt securing the opinions of members on important international the intervals between the wM>^4M7fff of the Congress. (i) The Committee on Pmnanent Organization shall also recommend a locatioii for the permanent headquarters. Five NoHom in Tm^ormrf Or§miamtkm V. Temporary Organizatim—ll is the recommendation of the Commitlee that the nations represented in this ccmfer- ence, namely, Great Britain, France, Belgium, Italy and the United States, shall ccmtitute a temporary organiiation, and that a jdnt ccMnmittee be appointed representative of these nations to prepare a plan for permanent organization; that as soon as practicable, a meetmg be called by ^ mittee on Organization of the representatives of such nations as they may unanimously determine to invite, at which meeting the plan for permanent organiiation shall be i»e- sented for adoption in final form. The Committee recommends that the delegates in conference from eadi of the five countries shall select imme- diately two members of a joint conmiittee on permanent organization to present a coiuplete plan of organisation ior s u bmiss i on as provided above. 84 WOULD REMOYB TRADE RESTRICTIONS Would Remcive Trade Restrictions Committee on Resolutions urges that freedom of action in business be restored and materials and commodities he interchanged THE varioas Conferenoe Conunittees for the most park were organized to represent particular industries and groups of industries in the United States whose direct aid and oo-operation ware desired to restore the normal processes of commerce. The members of these Committees, being representative of aU the factors in their industries, were in a position to say what could or eooM not be done in their pai^ ticular hnes in meeting immediate needs of Europe, and like- wise wherever it wm possible to secore prompt vssiibSi Hms were in a position to influence action. Hcports from the Conference Conunittees have been re- ceived and adopted by yon. In general* they have covepsd three phases of the questions before them: GiMifsfitfics PlroMsnif in TIm^ss GhHMi First— Matters which the Committees could take up with their industries and secure action with little delay; Second — ^Matters caUing for legislation or m which it is necessary to obtain the co-operation of governments, and Third — Questions calling for further study before the Com- mittee is dthar aUe to act or make recbaimendaticiis. Through the instrumentality of this International Con- ference, accurate and dependable statements as to commercial, industrial and sodal conditions in the varioas countrfes reive- sented here, have been placed before the public of the United Slates for the An* tiflM. Mnoh nsur inl w nnatioB has hssa 86 S9SSSSBSBSB5BSSBaBBBS^ INTBBNATIONAL TRADE CONFERENCE made availaMe. The prdblems myohfed are so many and so complicated that no business man of experience would e3ii)ect the CommitteeB to make oonqmhennve reports and laoom- mendations as a result of the comparatively brief considera- tion they could give to the data presented to them. It is, theref ted by you. This action makes unnecessary qpedal resolutions on most of the subjects involved. Committees Wiil Contimse InmeHaetkmi Each Committee iqfxxrts the need ol furtbor woA and investigation in order to follow up the results of the Con- ference and to deal with questions which could not be dis> posed of immediately. All of the Comnnttees of the Confer^ ence will therefore continue their work in co-operation with the permanent organizatkm proyided for the International Trade Conference and the Chamber of Commerce of the United States, whidi wiD do everything possifale to forward their purposes and efforts. All ot the rqpcvts made by the Committees and the proceedings of the Conference will be published inunediately and placed at tiie diqposal of the delates to this Co nfa ren c e and the business and financial organizations of the country. The same comree wiU be folkwed as soon as additional rqK^ are received from the Committees. For these reasons, your Committee on Resolutions finds it necessary to prasnt for your consideration only a few resolutions which are feoeral in dharacter and which may be sqparatdy considered. The following two resolutions were presented by the PetfoleiBn fioBHWittftttj considered ttid n F^f^nH d by the WOULD REMOVE TRADE RESTRICTIONS ■ I I II 11 1 I I I I— — 1 n il . I ! I , I I _ II i m mmmmmmmmm m m, » , H i m Resolutions Gkmunittee, and as am^ided are recommended for adoption by the International Trade Cosi&rence Eedprocai ReceinUkm €f NatknuOs Resolved, That it is the sense of the International Trade Ccmference tiiat nationals of each country should be accorded reciiNrocal recognition in foreign countries identical witii that accorded in their own country to nationals of other countries. Go9eiiU»UiUai Cantroi of hkbtetriee Whereas, During the period of the war the conduct of commerce and industry throughout the world was largely placed under governmental control— the fieedom of trade and the law of supply and demand being set aside — and WHWHRAft, It was generally mderstood that this sitaiatiaii was purely temporary and would come to an end when nor- mal conditions should be re-established; Therefore, Be It Resolved, That it is the sense of the International Trade Conference that all restrictioDS on natural economic laws dKNdd be lifled as soon as the exoq^ tional circumstances growing out of the war will permit. The following resohition was sobmitted by the Coal Conmiittee, considered and amended by the Resolutions Committee and as am^ded is recommraded for adoption by the Conferaice: Restrictions on Coal Industry Whereas, Our conferences with the European Coal Com- mittees have devdoped the need <^ extending and continuing exports of coal to Europe from the United States ; and Whebbas, Various restrictions by agOKsfes of the Ameri^ and European Governments prevent the most efiTective measures being taken to provide suitable coal of sufficient quantities under conditions mutually advantageous; and B7 INTERNATIONAL TRADE CONFERENCE Whereas, The need for several particular classes of coal in Euiope and the production of mtny diffierant kinds of ooal in the United States make it necessary that the purchase, shipment aud distribution of these coals should be handled throughout by practical and oupemnoed bonneaB men familiar with the details of such business; and Whereas, Governmental lestricticms seriously interfere with the develqiment of permanent and deranUe trade relationships between the American coal industry, and European consumers; Therepobb, Be It Resolved, That we urge the abandon- ment of governmental restrictions on the purchase, shipment and distribution of codl from America ate soon as ever the circmnstances of the respective countries will permit. And Be It Further Resolved, That the Conference request the Directors of the Chamber of Commeroe of the United States to bring this resolution to the attention of the proper American authorities, and that the members of the foreign Missions be likewise requested to bring it to the attention of their respective Governments. The foUowing resolution originated with the Resolutions Committee itsdf and m the form here submitted is recom- mended for adoption by the Conference; Interchange qf CommodUies and Raw Materials It being in the common interest of nations that there be the widest possiUe devdopment of industry and 1 J rce, and that p r o sper ity shooM everywhere prevail, the International Trade Conference deems it to be of prime importance that there should be the widest practicable inter- change of commodities and in particular the freest practicable distribution of raw materials; and that at the present moment oonsidsraticn should be given to the ({ueslion of a fair dis- tribution of raw materials in connection with any financial plans {(x the revival or rehaluUtaticm of industries which have been mtemipted or prostrated by the war. List oj pamphlets published by the IRVING NATIONAL BANK Volume One No. X. The Trade Acceptance a National Aflset. No. e. Federal Tax Law of 1917. No. S. Inflwwioe of the War on Trade — Domflstic and Foraifii. No. 4. The Trade Aoo^tanoe in Nataonal Preparedneit. No. 5. American Banking in Foreign Trade. No. 6, War Time Finances. No, 7. The Trade Acceptance Nationally Launched. No. 8. Govenimi^t Price Filing and Profit Taxation. Volume Tv» No. 1. The Financial Aspect of Cotton. No. 2. Practical Questions and Answers on Trade Acceptance. No. 3. The Relation of Industrial Chemistry to Banking. No. J^. Trade Acceptance Progress. No. 6. Federal Reserve Act as Amended with iUgulatione. No. $. The Effiaeocy oC War and Pteoe. Ne. 7. Gav e ni m ent Loam and Iniatioii. No. 8. A Trade Acceptance Review. No. 9. Trade and the War. Volume Three No. 1. Bioedemng the Ykkm of the A nwrioa n Badmm Man. No. f . Trade Acoeptanoe GonMrvmg the Natioa*t Reeouroea. Ne. S. The Course of Bond Prices. No. 4. Foreign Trade Thought of 1918. No. 6. Ck>-operative Organization. Vohme Four No. 1. Business Problems of Reconatruction. No. e. Federal Tax Law of 1918. No. 3. Co-operative Service in Foreign Trade. No. J^. Industrial Issues of the Times. Ne. $. Fofeign Trade Thought of 1919. VoLvme Fiee No. 1. Trade Thought of the Two Americas in 1919. No. 2. Some Factors in American Prosperity. No. S. Wanted: American Spirit in Our Foreign Trade. Ne. 4. What ia Wioi« With the Electric Raawaya. ffa» 5. Hofw Banka are Keeping Abieaat of Fofeign Trade. h I Hi I A., NEH International trada oonferanca. Atlantic City, 1919, Trade thought of poat^Mr Europe CD < Ho IT COLUMBIA ^M',yf.?S'''"Y LIBRARIES 004 436105