AMERICA'S EXPORT TRADE

Evening Post, Volume XCIII, Issue 85, 10 April 1917, Page 3

AMERICA'S EXPORT TRADE

WHAT WOULD BE THE EFFECT

OF WAR ?

What effect would a declaration of war with Germany have on .the domestic and export trade of this country, ? This is what everyone, East or West, is • asking (says the Chicago correspondent of New York Evening Post, in its issue of Ist March). The question is answered differently Here by different people; indeed,.the whole situation,, even without a war, is one of the most-complicated with which business men have ©ver been confronted; The grain trade, for instance; 1 professes to see'abundant reason why prices. of grain and foodstuffs must go higher. Yet, at the same time, everyone recognises other disturbing factors (the trouble, in the ocean trade,' for instance),"' which might easily cause a decline in prices.

As most of our large Western ' producers and grain dealers-see it, we are in practically, a state of war already, and have been so for some time; so that conditions would not/be changed greatly in the immediate future, even were war to be declared at once. The speculative trade could hardly be made more ner,vous; it might even be revived, from present conditions, as business has waned greatly of late. Supplies are short, and the country is suffering from over-ex-porting and over-speculation in foodstuffs. War might check this tendency, whether wjth good or bad results; and yet war has usually had thei result of raising prices rapidly. ' TRADE IN WAR TIME. \ In case of actual war, the situation as regards perishable stuff would probably be rendered worse. It would not be so easy to transport it, and demand would be large and insistent. Production might be affected adversely, and make prices almost 'more prohibitive to many consumers even than they are at present. If troops and munitions were to be moved, the country would see a worse congestion of railroad traffic, as the movement of troops would occupy much of the-roll-ing stock, and general freight would be sidetracked. This is, perhaps, one of the 1 remoter, considerations; but if it becajne necessary to convoy our ships, or for, the Allies to convoy theirs, with supplies from American shores to Europe, exports wpuld undoubtedly be curtailed very, considerably. Here, again, however, the question really is, whether the situation in that regard would be any worse than it is, if we should call it war.

i As yet, the crisis has not become acute enough in the mind of general business to)suggest a more serious condition than at' present confronts the country. It is bad enough now and to make it any worse would bo borrk ing on the impossible so far as traffic conditions are seen. The trade leaders in grain are disposed to 100k N for higher prices for grain* and provisions war or no war. They expect breaks from time to time, but they predict that the trend will be upward. RESISTING POWER.' On the iwhole/ however, trade is in better shape to withstand sudden shocks and surprises than for months past. Heavy liquidation has been on, 'especially in grain, by interests on both sides of the market, which is more nearly "evened up" than at any time for months. This is one of the reasons why it has failed in tho face of recent disturbing news to show excitement, or make sensational changes like those of the Ist of February.; when whe^t broke 15 cents at the opening on the mere intimation of war with Germany. There is no such speculative interest outstand-' ing in any of the markets as there was j a month ago—even though many prices I are higher than at, that time. The action of the grain market, this week, jn advancing when it looked as though war were actually at hand, shows the difference between an "overbought" and a "well liquidated" market.

It is remarked on all sides that the response which impending war, almost invariably elicits from the money markets has on this occasion been entirely absent. It is true that Western' money; rates are slightly higher, but for this reason is wholly unconnected, with our foreign relations. Congestion in the grain trade, through the inability of the railroads to move supplies to the seaboard or from Western country elevators, has increased the demand for money and strengthened interest rates. SIGNS OF THE FAY. Yet loans have been generally made his week'in this market not higher than 4 to 4j per cent, on call, while time funds bring 4J to S per cent. " Grain that usually moves freely to tho seaboard from here and primary markets has 1 been delayed, and money has been tied up for a longer period, necessitating the use of a larger amount to handle a smaller business as the unloading is so slow. Taken as a whole, the banking situation is strong, but the merchandising situation less favourable. Manuafacturers and merchants have goods at higher costs than ever, which necessitates more caution and the use of more money; so that, with the present uncertainy regarding the international situation, there is a very general desire to go slow. But if one •is asked if any actual alarm exists over possible war with ■ Germany, or if preparation is being made' for a panic like that which swept over Europe when the Great Powers went to war in 1914, the answer is that no such condition has arisen. Fundamentally the financial, industrial, and economic: situation is very strong. We have had more than-two years for . accumulating, concentrating, and in many wjays mobilising our glreat resources, and can face whatever comes with at least reasonable composure.