COMPETITIVE CONDITIONS IN INTERNATIONAL TRADE. 65

American banking facilities abroad have been considerably extended
 since the Federal reserve act was passed; but the movement
has not been confined to national banks.
In June, 1914, the National City Bank of New York sent agents
to make investigations in South America. In November, 1914, it
opened a branch at Buenos Aires, and a little later a branch at Rio
Janeiro. It has since opened branches at Santos, Sao Paulo, Montevideo,
 Santiago, and Habana. In June, 1916, it announced that
arrangements had been completed for opening branches at Valparaiso
 and at Genoa, and that agencies had been determined on
at Bahia and Milan. The National City Co., formed and controlled
by the National City Bank, has bought a controlling interest in the
International Banking Corporation.
The Commercial National Bank, of Washington, D. C., has established
 branches at Panama and Colon.
W. R. Grace &amp; Co. have established banking agencies at Lima,
Callao, and Arequipa, in Peru; at La Paz, Bolivia; and at Valparaiso,
Santiago, Concepcion, and Valdivia, in Chile.
The Continental Banking &amp; Trust Co. of Panama, a West Virginia
corporation, formed by New York, New Jersey, and Pennsylvania
men, has branches at David, Bocas del Toro, and Chorillo, Panama.
and at Santa Marta, Colombia.
The Mercantile Bank of the Americas has been formed by Brown
Bros. &amp; Co. and J. &amp; W. Seligman &amp; Co. “to provide financial and
other facilities in connection with American trade to and from Central
 and South America.” It began by making connections with existing
 banks and bankers in Nicaragua, Costa Rica, Honduras, and
Venezuela.
The new enterprises appear to be practically confined to Central
and South America. The International Banking Corporation is apparently
 still the only establishment with headquarters in the United
States and branches in the Far East.
The Federal reserve act contains a provision which may be ‘as
important in its ultimate effects as the authorization of branches;
namely, the authorization of the purchase of commercial acceptances.
Such acceptances have heretofore been almost unknown in the United
States, while they constitute the bulk of the paper in the banks of
the commercial countries of Europe. It is by discounting such paper
that the long credits allowed by European exporters in Latin America,
Australia, South Africa, China, and elsewhere are financed. Under
the Federal reserve act, and the regulations issued by the Federal
Reserve Board, Federal reserve banks may discount acceptances, based
on importation and exportation, up to 50 per cent of the unimpaired
capital and surplus of the member banks by which the paper is
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