lOJO.I 



THE INDIA RUBBER WORLD 



273 



i.>ii was, "How can those— to use the popular term— various 



:>:u)ns be functioned?" Simply by enlarging the American 



■A'j; system, just as we establish a bank here or in a small 



iir a large town to-day and do a domestic business and 



ip the business there; enlarge our banking system so that 



>ii do business with them. They are doing it in England 



i I hey are taking the South American trade, and they are 



- Ill- lo beat us right to it unless we get busy. Somebody ought 



•. > t.ike advantage of the world's great opportunities. It is the 



I (tiiial evolution from the great World War. 



INTERNATIONAL TRADE BANKS. 



Wo passed a bill providing that we can 

 now establish, under the Federal Reserve, 

 trade banks for international banking. What 

 do they do? The man abroad wants to buy 

 SIOO.OOO of your products. He has not got 

 the money. He has a mortage that he 

 can give you or something else which per- 

 haps he can give you. He has got security. 

 You cannot take it over. We have pro- 

 vided, how-ever, a banking system so they 

 can take those securities after investigating 

 them, issuing on those securities bonds and 

 debentures to the American public, giving 

 you your cash. Off go the goods, and we 

 are doing business all the time. 



RATE OF EXCHANGE NOW PROHIBITORY. 



What else does it do? To-day the rate 

 of exchange, as you all know, if you are at 

 all interested in export business, is abso- 

 lutely prohibitory. In France they have to 

 pay two to one. .'V franc worth 20 cents is 

 ten cents. In England a pound sterling was 

 never so low as in the last month or six 

 weeks. They have to pay 25 per cent off 

 the normal. Don't live in a fool's paradise. 

 They are buying now simply the goods they 



won't pay any such tremendous premium as the present rate of 

 interest makes necessary because they won't have to do it. 



We have simply got to arrange over here so that we can 

 equalize trade balances or credit balances in order that the rate 

 of exchange will naturally decrease, so that normal times, at 

 least comparatively, can come back in the near future. And 

 when we establish these banks and take these securities from 

 abroad and bring them over here and send the goods over, then 

 we are gradually building up — just the same as imports would 

 build up — so that the trade credit balances gradually equalize 

 and the rate of exchange automatically goes down. That is one 

 of the natural advantages of dealing in foreign securities. 



THREE WAYS TO EQUALIZE EXCHANGE. 



There are only three ways that I ever heard about by which 

 you can equalize exchange or trade conditions ; one is by the 

 importation of goods, another is by the importation of gold, and 

 the other is by purchasing securities. We are now trying to 

 arrange so that we can purchase their securities — they haven't 

 any gold to speak of. Imports we want as we want them, but the 

 main thing is to buy their securities and to send our goods over 

 and for the American business man to make a profit on the 

 goods and to use Mr. Schwab's merchant marine as a practical 

 proposition, rather than simply a sentiment. 



The Government now has provided the way and the method. 

 And I believe that in the countries abroad, if the Government 

 will continue to cooperate and hold business, rather than to run 

 business — wc can retain the position that the world apparently 

 is ready to accord to us. 



IMPORTANCE OF PEACE TREATY RATIFICATION. 



Touching with approval upon the recent activities of the 

 Department of Justice in dealing with some of the diseases now 

 infecting the country, and offering "Export. Import and Deport" 

 as a Jimely text for the nation, he passed (.-n to the need of 

 ratifying the peace treaty: 



Charles M. Schwab. 

 They 



Speaking personally, I hope that Congress expeditiously, and 

 without unnecessary partisan rancor or playing for position, 

 gets clear of the peace treaty and ratifies it. As a Republican 

 I have stood, however, and will continue to stand, for the follow- 

 ing position : when the Constitution was adopted — we had noth- 

 ing to do with it— it charged and delegated to the United States 

 Senate certain responsibilities. It is not empty; it means some- 

 thing or we should abdicate our position. I believe and stand 

 for very positively— as I hope my record has testified— that we 

 must protect beyond any question of future doubt the indepen- 

 dence and sovereignty of our own country. But in doing that— 

 and that can be done very easily — we should 

 not evade any responsibility in times of 

 pc.ice as we have not evaded any in times 



WOULD END BUSINESS HESITATION. 



[ think inucli of this business hesitation 

 will be behind us and men will go forward 

 with a determination and an energy that 

 has been just a little lacking in the last 

 twelve months because of uncertainty as to 

 what would happen in Washington. I be- 

 lieve it will go forward with renewed 

 vigor, and perhaps the vacation of a year 

 won't be so bad for us after all, if Con- 

 gress will decide, if the Senate will ratify 

 the treaty, properly reserved, so that there 

 can lie no question of the honor and integ- 

 ritx of our country when it comes to future 

 crises or future decisions to make; that 

 they will dispose of it, and thus send the 

 message out to the industrial section of 

 the country, which means practically all 

 parts of the country ; that then it is up to 

 the business men of the country to get 

 busy. 

 National prosperity depends absolutely on national content- 

 ment. National contentment depends to a great extent on em- 

 ployment, and employment, of course, depends to a great extent 

 on the demand for production. You can't increase production 

 unless you have the market. You can't increase production if 

 you narrow the market. That is the reason I am so interested 

 in the exportations, the development of exportations. 



FOREIGN CREDITS THROUGH TRADE PROFITS. 



We loaned nine billions of dollars during the time of war 

 abroad, and we should have loaned it. We now are not even 

 getting our interest. Perhaps we will. I hope so. I am forgetting 

 it. But we are asked to extend more credit. Isn't it better to 

 develop our own export business and send the goods abroad 

 and iTiake a profit on them, than to receive more money only 

 by taxation? That is the only way we can raise it — in order to 

 lend it abroad. In one way we tax you to lend the money. In 

 the other way you make a profit and we do business. That is 

 the difference between the two systems. I hope Congress recog- 

 nizes that, and I believe they will. I do not want to be too 

 critical of Congress. They have great responsibilities facing 

 them to-day in the relationship between Congress and the bus- 

 iness of the countr\-. We ask for your cooperation, we ask for 

 your advice, and above all. we ask for your confidence. 



MR. SCHWAB'S ADDRESS. 



In presenting tlic chairman of the board. Bethlehem Steel 

 Corp., New York, who. spoke on the tendencies and the future 

 of American industry, its opportunities, needs and duties, the 

 toastmaster very aptly and eloquently introduced him in these 

 words : 



.\ general of indusiry, who rose from the ranks; an exponent 

 i)f the square deal for labor, capital and the republic; a notable 

 example of the opportunity that America offers to those of her 

 citizens who use and develop the gifts that God has given them; 

 a dreamer of great things, but not visionary; a leader of men, 



