WILL NEW YORK BEAT LONDON?

Gisborne Times, Volume XXV, Issue 2033, 19 March 1907, Page 1

WILL NEW YORK BEAT LONDON?

A QUESTION OF CREDIT SUPREMACY.

Mr. J. Horbort Tritton contributes a noteworthy article to the Now York Times annual financial supplement on the ronsons for the credit .supremacy of London. -He says: Hie growth of the United States of America, docado by decado, in population, in trade oxtornal and trade internal, and in accumulated wealth, is a continual marvel to us as wo look across the ocean; while it compels the acknowledgment that it is destined to bo continuously greater in the futuro. No wonder then that the question arises: Is Now York now, or will it ever be, the financial centre of tho world? Tho question is not one which is of academic interest only, nor is it ono which is asked in Now York alono. On tho European coasts of the Atlantic and on the American coasts of tho Pacific tho interest in this question- is keen to-day, and likely t'o bo keener in tho futuro. . . London knows well onough that the daily New York cloaring bankers’ settlements aio in excess of hors, but this does not disturb her. What would disturb her equanimity would bo to find that in tho great marts of the world a bill of exehango drawn in dollars and payable in New York was more in demand than one drawn in British sterling payable in London, but she sees as yet no sign of this. “Thero can be no doubt that-Lon-don has boen the financial centre of the world since Venice, and, later, Amsterdam, successively lost that proud position, and that she holds it rather by force of circumstances than by either good fortune or good management. I:Ior supremacy does not, to my mind, seem as yet seriously threatened, though Paris, Berlin, and New York have each made great strides of late years in the international race. I postulate the following reasons for her position, and I predict that when they are found united in any one or other centre, whether in the Old World or in tho New, London will have to bow and confess herself beaten: —

“1. to be a financial centre of tho world it is necessary that a city should bo tho unquestioned financial centre of its own country. “2. That its own country should sell to all nations, should lend to all nations, and should buy from all nations. “3. That it should have large accumulated resources seeking worldwide outlets. “4. That it should have a mercantile marine as large as, or larger than, the aggregate of any other two or threo countries combined. “5. That its sons should be able to hive off to distant shores, retaining their citizenship, and be proud to administer and govern dependencies and colonics, not as separate units, but as parts of a great whole. “6. That cost of production and consequent power to export not bo enhanced 1 by unnecessary legislation. “7. Last, but not least, that a well - grounded confidence exists throughout the world that her coin of the realm—that in which values are computed—her money of accounts bo a definite and unchanging weight of gold, and that there bo a certainty that all holders of documents wlioroby is assigned to them at a given date such and such a valuo expressed in that money of account, shall bo ablo, without lot or hindrance, to obtain if tlioy desire tho equivalent weight in gold of tho prescribed fineness at tho moment when they aro entitled to claim it.

“A treatise might be written on eacli of these propositions, but it suffices now to enquire how far id the case of New York these conditions are fulfilled. “1. It may bo presumptuous in one who has not recently visited tho United States to ask whether New York is really the financial centre of the country. . Apart from Stock Exchange transactions, I am under the impression that Chicago - might put in-a claim, but I readily admit that I do not believe it could be substantiated.

“2. Tho United States is, from its geographical range and climatic conditions, so self-contained, and its magnificent resources demand such a vast capital for their development, that the incentive to foreign trade is not nearly so strong with lior as with us.

“3. If we except from the mercantile marine tonnage of the United States that employed on the rivers and the Great Lakes, her sea-going tonnage is, save in the North Atlantic trade, quite insignificant. Tho example of France is not encouraging to the advocates of bounties either in tonnage or mileage. “Great Britain and her dependencies own more than half the aggregate world’s tonnage. “4. The colonial policy of tho citizens of the United States has not yet had much elianeo of assorting itself ; it seems still to be of an experimental order. “5. The fiscal system of the United States, which has admirers on this side, and not only admirers, but advocates strenuous and persistent, is admittedly a factor in keeping up tho cost of production. For fifty years this country has gone on opposite principles, and has no reason, judging from tho roturns of exports and imports, to pegret tho free admission of the greater- part of the latter.

“6. But it is in the last of rny propositions that I find the chief reason for the predominance of London as the financial centre of tho world. “A banker of many years standing, I look back with pride and satisfaction to the ‘part played by the city of London during the raging of the bi-metallic controversy, when, as it is generally acknowledged, ‘ono square’mile’ stood apparently ‘contra niunduin’ and conquered. . . . “The more clearly the' true conditions affecting the trade of the world that exchange of goods against goods perpetually in progress—are understood, the hotter for international trade. It is possible that we may see a sort of duality established between New York and London, oacb keeping a central stock of gold subject to tho issue of gold certificates, against it current on either side, and thus the actual transmission of bullion across the Atlantic and back again may he minimised. In this way New York would undoubtedly make a great stride toward financial supremacy. “I feel tempted to add the conviction of an old freetrader, held for many years, that when, if ever, tlie United States adopts external freetrade, though the shock to her internal trade would at first he great-, while the benefit at first to this country would bo as great, in tho long run she would so effectually undersell Great Britain that our supremacy would ho wrenched away from us in spite of other and unfavorable conditions. Absit- omen I”