< ſº- J.I.i.5 l'Aix-Y of THE SS - 1 J sº JFT ...A. ----- ~3- \s- rº. * ** º y ſ š). ;RSITY OF MICIIIſ, Mºnº }{ ºfrºzºvºyºrº. ſiſſiºniſmſ. rºº Gºº … w ~ --~~ | rºw New York, March 18, 1918 Guaranty Trust Company of New York 140 Broadway, New York Taking Stock of the Future The Guaranty Trust Company of New York presents herewith the first of a series of papers upon the subject of financial and economic conditions in foreign countries. It is believed that such authentic information, concisely presented, will be of much value in view of the necessity of holding and increasing our foreign trade after the war. The present article sets forth a general view of the existing conditions that will affect profoundly the future of American production and distribution. In subsequent articles more specific instances of the changes that have come about during the last few years will be given in connection with an account of the measures for meeting them which various countries now have under advisement, and of the principles to which they intend to adhere in the work of reconstruction. Finally, it is proposed to submit information concerning trade opportunities in various foreign countries which will be of interest to Americans desirous of extending their business into new and profitable fields. VERYWHERE throughout the world, men and nations are preparing for peace. Their prepara- tions are going forward not in the belief that peace will come in a month, or a year, or within any other fixed period, but rather in the conviction that no matter how far off peace may be, its known problems are of such magnitude and importance as to require immediate consideration. Even those countries which at the moment are chiefly concerned with war measures are taking stock of the future, and are seek- ing with all the prevision they can command to glean from its uncertainties some understanding of the principles that must obtain in reclaiming the wreck that this conflict has made of the activities and rela- tionships of mankind. THE WRECK of WAR The extent of that wreck is incalculable. It is only when one turns to the problems of eventual peace that some realization may be had of the destruction of the last three and one-half years. The money cost alone has been estimated at $100,000,000,000. Liter- ally millions of men, women and children have been killed, have died, or have been rendered physically useless. Entire countries have been laid waste. In every warring country equipment for the produc- tion and distribution of goods, other than war sup- plies, has been deliberately scrapped or allowed to deteriorate beyond hope of rehabilitation. Trade routes on land and sea have been abandoned and new ones, to meet temporary needs, have been estab- lished. The demand for ships has taxed the re- sources of every country in material and labor. Wherever the inquirer turns he sees evidences of war's ravages among the material things which are the indexes of man's advancement. There is no less of tragedy in the destruction of a host of ideas, feel- ings, beliefs, sentiments and personal attachments through which the moral, social and spiritual aspira- tions of mankind were accustomed to express them- selves. - SoME BENEFITs On the other side, however, there are certain indis. putable advantages, and in these are the seeds of restoration and future prosperity... As never before in the world's history, individuals and nations have been driven to a marvelous development of their personal and economic resources. Nations which have been among the most luxury-loving and care- free, have turned to the business of war with an en- thusiasm, a fortitude and a capacity for sacrifice that have astonished the world. To provide for the fighters and for themselves those behind the lines in every walk of life are toiling incessantly in farm and factory. The sheer necessity of preserving life and property has forced them to a more efficient use of their own talents and of the resources which nature has provided. The easier habits of peace have given way before the stern demands of war. Thrift has become a necessity as well as a duty. - A.C. \ O(, , º, G-4 A- SELF-RELLANCE Neutral countries, no longer able to import the things they require, are turning to their own fields and mines for food and raw materials. They are increasing their manufactures and developing their foreign trade. Out of this is growing not only an understanding of the wants of other peoples, the extent of their resources, and their methods of doing business, but also-and more important—an under- standing of their own capacities. Accordingly there is observable a growing spirit of enterprise and prepa- ration not unlike that of the Renaissance which swept over Europe at the close of the Middle Ages. WHAT PEACE MEANs To come to any appreciation of what part the United States may play in world affairs at the close of this war, and by what means it is to hold its posi- tion, a clear idea must be had of what the coming of peace will immediately involve. The warring coun- tries for a considerable period must direct their efforts largely toward taking apart, or demobilizing, the vast and intricate war machine, and toward rearranging society, not according to pre-war standards, but according to the new requirements which a long and disastrous war has made unavoidable. ORGANIZING FOR PEACE It is beginning to be realized that the individual nation must organize for peace just as it did for war, if it is to give effective aid to mankind in reconstruct- ing the structure of a civilization which it took 1400 years to build up and less than three years to break down. The first step toward such an organization for peace, however, must be the clearing away of the debris of war. In this America will have the advan- tage of being able to turn more quickly to what may be termed development as distinguished from de- mobilization and rebuilding. PROBLEM OF READJUSTMENT It has been estimated that 85,000,000 men are under arms or are directly connected with the mili- tary and naval services of the nations of the earth. How many more, including women, are engaged exclusively in war work it is impossible to estimate. Then come others whose talents and energies are directed toward supplying goods and services that are needed only because so many men and women have been withdrawn from production and distribu- tion. These are merely indicators of the vast multitudes who are now doing things they did not do before the war, and who may or may not continue to do them after the war. In itself the demobilization of the fighters and their return to their own countries is a huge problem; but there are wartime industries, wartime railroads and wartime trade and shipping routes which will cease to serve any useful purpose when peace comes. NEw INDUSTRIES There are governmental policies, financial arrange- ments, legislative and military restrictions of all sorts in nearly every country which have created new forms of industry, developed new methods of doing business, established investments and set up impor- tant obligations. To eliminate those no longer essen- tial, to readjust relationships and make them suit- able for peaceful pursuits—to clear the field for prog- ress—is a stupendous undertaking which will de- mand all the wisdom of mankind. Moreover, for Europe especially, must come the period of rebuilding—a replacement as well as read- justment. Outside the matter of rebuilding, in itself tremendous, there is the equipment of farming, mining, industrial and transportation enterprises, small and large, which have been destroyed or dis- organized by the war. The needs of every European country along these lines must be studied, and studied carefully, by those who would fully appre- ciate the opportunities for service and for gain which they offer. RENEWAL of PROSPERITY After this period during which they will reorgan- ize their forces and lay the foundation for future efforts, the nations affected by the war see a new era of prosperity. Countries that are heavily in debt will desire to reduce their obligations and eventually to turn the balance of trade in their favor. To this end they are planning an intensive cultivation of the soil, a diversification and enlargement of industry, a development of their merchant navies, a general outpouring of energies of every variety such as the world has never known before. Every resource of nature and human ingenuity will be requisitioned in the interest of this development. It is a program to touch the imagination of the dullest. EUROPE's ADVANTAGEs While America will escape the burden of rebuild- ing, while her demobilization problem, difficult as it will be, is insignificant compared to that of the European nations, and while we shall accordingly have a very important advantage over our commer- cial and industrial rivals, it should be remembered that the European nations will also have certain very material advantages. First of all they will have the impetus given by their colossal national debts. To pay these will be the proud ambition of every honorable nation. None of them will care to face the world with a record of repudiation. To their purpose to pay they will bring a skill in manufac- ture bred through many years during which competi- tion forced them to produce cheaply and quickly. They will have colonies, rich in raw materials, which have developed during the last three years a higher degree of productive efficiency. They will have an intimate acquaintance with the conduct of foreign trade and the framework at least of an organization upon which its success depends. Théy will have a system of foreign banks with staffs of trained men in charge. They will undoubtedly have a degree of Governmental assistance and support with which American traders have heretofore been unacquainted. These are some of the disadvantages with which America must reckon. No American will admit that they are discouraging. They are suggestive of the roads to follow—the paths that lead to our commer- cial empires of tomorrow. AMERICA’s STRATEGIC Position Aside from a favorable position at the opening of this race for commercial supremacy, America has certain other advantages of importance. At the foundation lies a huge gold reserve upon which can be built a structure of credit sufficient not only to finance our own enterprises, but also to give aid to those of foreign countries. To guide and assist these credit extensions we have a banking system charac- terized by some of our rivals as ideal. This system will lend itself to the extension of American financial houses into foreign countries. Already a beginning has been made, not only by the setting up of branch banks and foreign offices—establishments which may be termed money and credit depots for the advancing trade army—but also by the organization of mer- chandise banks, institutions with the usefulness and working of which European nations have long been familiar. PoliticAL POSITION On the political side of the situation America is fortunate in possessing a form of government which the vast majority of her citizens believe in and intend to cherish. Considering that we have a population of more than 105,000,000 the efforts of the disloyal or the misguided to overturn the fundamental things in our national polity are not likely to make much impression. With few exceptions the nations of the world understand that America is actuated by no policy of territorial aggrandizement. Suspicions engendered by Germany in Mexico and South America are rapidly giving way before an under- standing of our purposes in this war and after it. Finally this country is not, and is not likely to be, cursed with a class struggle. Despite all their pro- paganda the Socialists have had little success in convincing us that the future of America depends upon the domination of government and industry by one class. The prospect seems to be that for many years to come the Socialists will be extremely busy explaining why their theories failed so disastrously in Russia, the only country that ever had sufficient disregard for its own interests to try them. EconoMIC STRENGTH Economically the position of America is solid and inspiring. With an immense population, com- pounded of many elements, she is assured of a rich- ness and variety of productive effort that rightly directed will give her preeminence in satisfying the multitudinous wants of her world neighbors. An abundance of untilled farming land, inexhaustible mines, rich forests and ample water supply both for power and transportation invite this population to their conversion into wealth. Our inventive genius in the past has revolutionized the forms of industry. For the research worker in the industrial field there were never greater opportunities than now. Back of these powers of production stands the fact that we shall have at the close of the war a merchant marine and facilities for maintaining it such as America or any other nation never has known before. To bring all these factors of industrial, commercial and finan- cial strength into complete coöperation is a task for which the American faculty for organization is excel- lently fitted. SoLVING THE PROBLEM This, in broad outline, is the situation. To the solution of these problems every great nation of the world, with the exception of the United States, is already giving the thought of its most able men. Under the auspices of their Governments, financiers, manufacturers, traders and workmen are being organized for the purpose of investigating and report- ing on what will best serve to lift their respective enterprises out of the ruin of war. When all the resultant mass of information and opinion shall have been accumulated and organized it will be coördi- nated and will form the basis of policies which the Governments are expected to adopt. Already it is evident that some of these policies may shatter traditions and ideals long adhered to, and will be bitterly opposed both by those who live in the past and those who dream of the future. Certain it is, however, that these problems of peace must be solved and the nation that solves them with the largest measure of vision and practical insight will soonest get out of debt and resume a prosperous career. War is now the supreme effort of the na- tions. After the war, all will be concentrated no less vigorously on the work of reconstruction. THE TASK BEFORE Us In the United States there has been, so far, no organized undertaking on the part of the Govern- ment looking to the solution of these problems. The future political and military relations of this country to the rest of the world have been set forth by the President, but neither he nor the Congress has ap- proached the question of financial, industrial and social reconstruction as a whole. Here and there in war measures or in the proposals of Department heads may be discerned evidences of individual in- vestigation and thinking, but thus far there has been no coöperative and avowed effort along this line as in other countries. No special body to enter upon this work has been organized here and while it may be fairly assumed that such Departments as those of the Treasury, the Interior, Agriculture, Commerce and Labor are devoting much of their time to re- construction measures there is as yet no agency for the coördination of their findings and the suggestion of general policies unless it be Congress itself, a purely political body. CoopFRATIVE EFFORT Up to the present time the task has devolved largely upon individuals, corporations and associa- tions who have no official standing. A great deal has been done in a desultory, detached sort of way, but no medium for interchange of opinion except the press, or for coöperative effort, has been created. This country seems not yet to have sensed the fact that the day of individual efforts and purposes, as dis- tinguished from coöoperation and public service, has passed; that this war has established not only the interdependence of nations but also the interde- pendence of individuals and classes within the nation and that common understanding, counsel and coöper- ation are surely to be the watchwords of the future. UNIVERSITY OF M!CH GAN ||||||||| | | 3 9015 O7472 7697