58 REPORT ON COOPERATION IN AMERICAN EXPORT TRADE,

The establishment of a network of German banks oversea has
saved to Germany a considerable portion of the tribute formerly
paid to England in the negotiation of foreign bills.
London, however, is still the leading center of financial exchange,
and in dealing with countries like South Africa and Australia Germany
 still must look to London for mediation. German banks are
compelled to maintain banking connections and branches in that allimportant
 financial center.

In Japan also a close connection is believed to exist between foreign
 trade and direct banking connections with foreign countries.
Japanese financial writers give much credit to the Yokohama, Specie
Bank for the growth of Japanese commerce. “Tt is scarcely necessary
 to dwell upon the fact,” says the Japan Financial and Economic
Monthly,* “that the development of foreign trade is attributable to
this banking organization.” The Yokohama Specie Bank opened
a branch at Sydney, New South Wales, in the summer of 1915; and
iu this connection it was remarked that the lack of exchange facilities
for direct dealing between Japan and Australia had been much felt,?
Yet it is doubtless easily possible to exaggerate the importance of
this matter. Mr. Wolfe, who has just been quoted on the advantages
the Germans have in their foreign banks, adds the following paraoraph
 of caution:

In certain countries Germans have no banks of their own and
some of their competitors are provided with such banks. Nevertheless,
 the Germans are doing a tremendous business there. This particularly
 refers to foreign markets, which in the’ preceding pages
have been left out of consideration, not being “over-sea markets.”
In Russia, French banks maintain branches and Germans have no
banks of their own; nevertheless they are far from being hampered
by such a lack. The establishment of banks abroad is not a sole
solution of success in foreign business in general and of the credit
problem in particular.?

No doubt it is true, as Mr. Wolfe implies, that the value of homecontrolled
 banks is greater as the countries concerned are more distant
 and as their own economic organization is less complete. The
commercial importance of branches of New York banks in Canada,
or of branches of German banks in Russia, would be less than the
value of branches of either in China.
Extension of credits.—Beyond the financing of oversea shipments
in transit, the problem of credits arises. Foreign transactions are
necessarily time-consuming, and under earlier conditions of transportation
 they were much more so than now. Partly to this, perhaps,
may be due the tradition of leisureliness which prevails, especially in
trade with the less developed countries. In that trade credits of
6, 9, and 12 months are common.

t March, 1915, p. 45.
? Financial America, New York, Sept. 27. 1915, p. 8.
3} Wolfe, op. cit., p. 48.