Evening Republican, Volume 22, Number 75, Rensselaer, Jasper County, 31 March 1919 — REMOVAL OF FOREIGN EXCHANGE CONTROL [ARTICLE]

REMOVAL OF FOREIGN EXCHANGE CONTROL

Britian and France, our leading control of foreign exchange. How much will this restrict our exports and depress our inflated prices? “The removal of the control of foreign exchange means more than a (cessation of the ‘stabilizing’ process,” rays an eastern authority. “It implies that foreign countries no longer think it necessary to spend the immense sums which they had to invest der to keep exchange level. This means in another sense that they will no longer attempt to borrow m the same proportion as here to fore, and that business men will be more and more driven to private financing whereby they will regulate their own relationships with their customer m other countries. No bank or business house can command the immense volume of credit that can be had by government action, and none can count with safety upon a future which must take its chance with commercial events, becoming prosperous as buying and demand are strong and unprosperous as they wane, is to be expected therefore that our foreign trade will not be so “good as it has been, due to the fact that it is no longer being artificially supported as in the past. “All this is merely an element m the general ‘readjustment’ process through which the world must pass in order to work ’back to its original position. It cannot be expected to settle itself quickly. There still remain the embargo on gold which exists in nearly every country today, and the enormously inflated condition of prices and bank credits which is practically universal. These conditions must be eliminated, as has been the -control of foreign exchange, before we shall even approximate to stable and satisfactory international relationships. They cannot be eliminated immediately because of the dependence of governments upon the banks for the financing of their current indebtedness. A start must be made, therefore, through the curtailment of government expenditure, thereby enabling the bankers, of the world to limit their obligations and so to get into position to pay tmir creditors abroad as well as those at» home. When that time comes gold embargoes will be abolished and exchange relationships will return to normal. There may and probably will be a period or disorganization intervening; in winch some business men and trades will suffer severely. “One thing to be borne in mind by the United States and its representatives is that the sooner a country works out of its high price and inflation regime, removes its gold embargoes and becomes a free market for exchange, the better off it will be. Such a country will be able to attract to itself the business of others, since it will be able to sell them goods at a profit and at the same time to offer them better terms for their financing than can be made by competitors. The United States today is the strongest country in the world financially speaking, yet it acts as if it were weak. It has established and maintained an extremely drastic gold embargo and a control of foreign exchange dependent in some sense upon the action of foreign countries, but nevertheless present. It should take prompt action to remove these shackles and let business begin the process of getting back to normal. Great Britain has set a courageous example in this matter. Why should not the United States do likewise, especially when its own immediate advantage is at stake,.