FOREIGN TRADE OF THE UNITED STATES 365 



FOEEIGN TRADE OP THE UNITED STATES 



By a. B. FARQUHAR 

 manufactdeer, york^ pa. 



THREE years ago it would have been a comparatively simple matter 

 to address you upon the foreign trade of the United States and 

 how best to promote it, the topic named in your secretary's courteous 

 invitation. But a change came with the Balkan war and the resulting 

 strained financial conditions, accumulation of public debts, private 

 hoarding of money, and curtailing of loans in fear of a general Euro- 

 pean catastrophe. One of the prominent business men of Europe wrote 

 me at that time that we might look for a great war, involving most of 

 the European continent, about 1914, and he added that he was prepar- 

 ing for it. Well, his war has come, the most inexcusably diabolical 

 that has cursed the world since the creation, involving the heaviest loss 

 of life and of property. European statisticians estimate the average 

 daily cost of it, including property and trade destroyed, from fifty to 

 seventy millions of dollars, and the killed and wounded at from twenty 

 to thirty thousand a day. 



The nations now are so closely linked together that our hemisphere 

 has already had to bear a portion of this heavy cost, and more yet 

 awaits it, but our yoke will be easy and burden light compared with the 

 crushing weight that has fallen upon Europe. Our country is on the 

 whole happily situated compared with any of the warring nations, but 

 when it is considered that three fourths of our exports had been taken 

 by the nations now at war, and that they had financed most of the other 

 fourth, it will readily be seen why our export trade is crippled, except iru 

 articles needed for war purposes. 



At the outbreak of the war our indebtedness to Europe, mainl}'- for 

 loans to aid our railroads, amounted to over five thousand million dol- 

 lars, several hundred millions of it falling due within four months. 

 Thanks to the Federal Reserve Act and our improved currency system, 

 which came at just the right moment, even as a godsend, to restore 

 confidence, we were saved from the throes of a great panic. The Stock 

 Exchange remained closed, fearing a large unloading of securities from 

 Europe, but there never was any real danger of that. Our friends 

 there felt that their money was safer when invested in this country 

 than anywhere else. 



That the causes of financial crises are largely psychological is almost 

 a truism, so abundant are the proofs of it shown in every business panic ; 

 and even, as at present, without a panic. For instance, people are jubi- 

 lant over the New York bank statement of over a hundred millions in 

 excess of legal requirements on the 18 per cent, basis, when under the 

 previous 25 per cent, basis the same reserve would be some millions 



