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independent warehouses or 'godowns, so that a check shall be kept upon their custody and sale.

Manchester has several strong and ably managed local banks, together with the branches of most of the great jointstock banks whose head offices are in London, both alike thoroughly conversant with the whole course of such trade. Many millions of pounds provided by these banks are constantly employed in financing the great export cotton goods trade of Lancashire. Perhaps less care has been accorded by these banks in replying to anonymous complaints than may have been advisable. The first-hand knowledge of the immense amount that has been and is being done predisposes to a disinclination to discuss matters of which the complainants do not so much as know the first elements of the situation.

The woollen goods trade, largely centred in Bradford, supplies another striking example of the use of bankers' funds for the encouragement of foreign trade. Here, as in Manchester, several local banks, as well as the branches of the larger jointstock banks, have financed a great volume of the export trade -much of it to Germany. A detailed account of the methods employed is hardly required. The general system will be understood from what has been said above, but probably in this trade a greater proportion of goods is sold without the drawing of drafts. Open account,' that is to say the sale of goods from (say) Yorkshire to Germany, for payment on certain specified dates, was common-and here, it will be noted, no tangible security (unless other cover were required and obtainable) could attach to bank advances. The goods passed, no acceptance was received, a lively expectation of the due receipt of proceeds on the prompt date alone remained. It is right to say that it was seldom disappointed. The European buyer paid promptly, for the shrewd Yorkshireman sold wisely. But to say that there was any hampering of the Yorkshire woollen trade by the withholding of banking facilities is simply untrue. If proof be required, it is to be seen in the large amount of German bills unpaid and open accounts undischarged when war broke out; both being in large measure still carried by bankers until such time as a settlement can be arranged.

The hardware trade, a description which includes a multitude of articles from costly machinery to the cheapest wares, is carried on very largely in Birmingham and the Midlands as well, of course, as in countless places all over the country. In a trade with so many ramifications, it is impossible to indicate the many different courses and methods of foreign sales. The credit given may be long or short, bills may be drawn or open credit arranged, but in every kind of such trade the assistance of the banks is called for and freely given.

In taking the foregoing four leading examples of British export business, the methods by which they are carried through, and the extent of banking facilities extended, it is necessary not to overlook the almost countless varieties of other trades which are financed by means of banking moneys. One of the greatest is the export of raw materials. We have an enormous trade in unmanufactured jute, hemp, cotton, and wool. These commodities are either shipped to British ports and then re-shipped abroad, or are shipped direct from the port of origin to foreign ports. In both cases the financing of the trade is arranged in this country, as a direct consequence of the facilities given by English banks. The number and variety of our other export trades are legion. We send herrings to Russia, codfish to Spain, steel rails and rolling stock to half the world, needles and thread, mustard, biscuits and sauce, ploughs and traction engines, toast-racks and bedsteads, axes, tools and anvils, jewellery, timber, and a hundred other commodities to every part of the globe. Year in and year out British manufacturers and merchants and brokers are engaged in this multifarious and world-wide business, ever with the friendly co-operation of the bankers to whom they are known and by whom they are fully trusted. For if the banks are of use to their clients, it is equally true that the clients are of value to the banks—the service is mutual, and nothing is of greater satisfaction to both than the establishment of such connexions, resulting, in innumerable instances, in the building up of individual firms, of partnerships and limited companies from small beginnings to positions of financial strength and world-wide reputation.

Before leaving the subject of foreign trade, there is one important remark to be made which bears upon all that has been already said and which may have emerged from the particulars given. Foreign trade has its peculiar difficulties and dangers, and its finance requires care and foresight. The cataclysm of war-universally overlooked prior to August 1914—the elementary considerations of honesty and ability to pay on the part of foreign buyers, the possibility of broken contracts and rejections, the length of credit, the intricate question of 'exchange,' and many other difficult problems must always be in the minds of exporters and no less of their bankers. Here are three or four instances of cases known to the writer, which are examples of what may easily occur in export business. It is not for a moment contended that they are other than exceptions, but they have their lesson and their warning.

A merchant, in a European country, ordered a quantity of nuts from an English fruit dealer and exporter at the price of £200. The parcel was shipped and duly arrived at the foreign port. The conditions of sale were cash against

documents, which means that the goods were to be paid for before delivery. The foreign merchant refused to pay, on the ground that, having sampled the nuts, he found they were largely bad. But he offered to buy at £100. The English exporter knew that his nuts were in good condition, but that the expense of bringing them back to England and the risks of his market might well result in an equal loss. He was only prevented from accepting the offer by a sense of resentment. Rather than submit to injustice he brought back his nuts, paying the return freight and insurance, and by good fortune succeeded in selling them in this country at a greater profiteven after two freights and other expenses had been incurred -than he would have obtained if the foreign buyer had made payment. The nuts were in perfect condition ! In ninetynine cases out of a hundred a considerable loss would have been made.

Another case, involving a much greater sum than the trifling sale price of the nuts, concerned coal cargoes. These were ordered for shipment abroad, and were so despatched and landed in the distant port. The foreign buyer repudiated his contract on the ground of quality. To engage shipping and bring back the cargo would have involved very heavy expense, and the seller determined to sell his coal by auction where it lay. The result of the auction (so called) was that the original buyer became the purchaser at a very much lower price than he had contracted to pay, his fellow coal merchants conveniently standing aside from bidding—no doubt for a consideration.

A third case—all these three incidents occurred in European countries—illustrates the more or less unanticipated dangers which may accompany foreign trade. A cargo of timber shipped abroad arrived at its destination in advance of the bill of lading. The port authorities took charge of the cargo, and on the arrival of the delayed letter containing the bill of lading, less than a week late, claimed £5/600 for their trouble ! This loss fell on the English shipper, by whom, admittedly, the documents should have been forwarded in time to meet the incoming cargo. But so monstrous a charge by the port authority for doing, in effect, just nothing, was equivalent to a 20 per cent. loss upon the price of the timber. This ridiculous charge was eventually halved as an 'act of grace,' but it turned the transaction from a small profit to a considerable loss. Nor was the fault, in fact, upon the part of the shipper. A delayed mail was the simple and unavoidable cause of the late arrival of the bill of lading.

The foreign trade of this country is vital to its welfare, and, difficulties and dangers notwithstanding, must be maintained. Its position is stronger than some of our newspaper critics imagine. For example, certain so-called ' captures' of our foreign business have been brought about by the deliberate refusal of our exporters to cut prices, and to extend the terms of credit in competition, say, with German firms. In this they were not remiss, as is so often complained. They were entirely right in refusing to take undue risks for the barest profit, and it is within the writer's knowledge that in granting such terms the German exporter lost money in the particular business so 'captured. It is to be hoped that the English exporter will not undertake risky foreign business merely because the traders of other nations are foolish enough to do so. On the other hand, failure upon the part of our traders to meet the legitimate requirements of foreign buyers, by sending out intelligible price lists, by adapting the goods to the buyer's demands, and by the employment of thoroughly equipped agents and 'travellers,' may have had a distinctly adverse influence upon our foreign trade.

Though Scotch and Irish banks have not been specially named in connexion with the great trades specified above, it is

VOL. 225. NO. 459.

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important to state that they are also doing their part equally with their English confrères. Glasgow and Belfast have not attained their greatness apart from foreign trade, and no traders and no bankers are at the same time more enterprising and more prudent.

Banking facilities are forthcoming in other quarters than these. The South African, Canadian, Australian, Eastern, and South American banks, with head offices or agencies in London, have an immense volume of foreign trade transactions—such business indeed being, unlike the foreign trade of the purely English banks, probably the chief part of their activities. The absurdity of the charge that any support is lacking to legitimate foreign commerce could in no way be more easily demonstrated than by the knowledge of the funds employed by these institutions in this precise direction. They, too, have the same knowledge of and interest in just such business, and, equipped as they are with their own foreign branches and their own very capable managers therein, compete not unsuccessfully with the joint-stock banks at home. So far from its being the case that the exporter cannot obtain adequate banking assistance, it were truer to say that there is keen competition among bankers to get his custom.

But even this is not the whole story. Beyond the ordinary bankers there is a great body of merchant bankers who undertake foreign business to an extent that can only be guessed, but which is certainly immense. This is not the place to explain the peculiar and vitally important business activities of the great Accepting Houses—or, more correctly, “Merchant Bankers '-of the City of London. Perhaps no men have done more than they have to establish the wealth, the good repute, and the adaptability of London as the money centre of the world. Notably well informed, of large means, and of the highest integrity, through their hands largely has passed the finance not only of British export and import trades, but of the trades of the world. So much, indeed, was this the case that the outbreak of war necessarily inflicted a severe shock to an activity so far-flung and so delicately poised. In the opinion of the present writer, few things, if any, are more to be desired in the interests of this country's commerce than the unimpaired maintenance of those facilities for trade which the Accepting Houses of London were able to give, and skilled in

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