426 REPORT ON COOPERATION IN AMERICAN EXPORT TRADE.

extent of millions a year with safety, bankers can do it far more readily. It
should be done under a system of cooperation between banks to meet the
losses, if any, and a small charge should be made, not exceeding 1 per cent.
A member of an exporting house which has been engaged in foreign
 trade for 28 years also replies that we should have—
* * * American banks with their own branches or agencies in the various
foreign countries, so that it will not be necessary to work through the Europeancontrolled
 banks. These banks, however, not to engage in loaning money or
accepting deposits in foreign countries, but only to exclusively handle the business
 of American shippers and importers; that is, not only to purchase and
collect for the goods which are sold by the American exporters to the foreign
countries, but also to negotiate the paper covering the purchases made by
American importers in these countries. Reciprocity agreements, by which
American goods may receive a favored treatment, will also help to create and
develop our trade.
Patriotic cooperation of German bankers.—To illustrate the point
he makes, a paper manufacturer narrates the experience a friend of
his had a few years ago in the matter of an inquiry from Germany
for street cars to be delivered to South America. As soon as he
secured the contract—
He immediately asked his New York bankers to inquire into the standing
of the buyer, who had given as reference the Deutsche Bank of Berlin. The
New York banker cabled the Deutsche Bank, who replied that the buyer was
good for all that he would buy. The German bank sent for the buyer, told
him they had received inquiry from the United States, and ssked the cause of
it. He told them that he had placed an order for some tramcars in the United
States for delivery to South America. He was asked why he had done it. He
said because price, delivery; finish, and style of product were all that could be
desired, to which the German banker replied, “ But don’t you know that your
company is financed by German money and German money can only be spent
in Germany? It is your duty to immediately cancel the order that you have
placed in the United States or your credit will be withdrawn.” This is an
evidence of the cooperation of foreign bankers who are very close to the
foreign Governments.
Suggestions for Government cooperation.—A prominent consulting
 engineer suggests that the Government could cooperate by—
* * x the granting of rights and facilities to American bankers for the
establishment of branches in foreign countries, under laws and conditions
equal to those under which other foreign banks operate.
In South and Central America our Government might consider the possibility
of taking loans of Central and South American Governments into our Treasury,
after proper investigations and protective measures, and issuing to American
investors our own Government certificates of deposit against such foreign
Government securities held in our Treasury. This would make a market in
this country, in a safe way to the investor, and the difference in the rate of
interest would be a profit to our Government for its services.
Banking and business develop each other—The vice president of
a national bank, who is greatly interested in the extension of our
foreign trade, replies that—

South American banking, for instance, will fall into the hands of our new
branches, being established down there, much more easily if our manufacturers
 are allowed to combine and make a business of developing that country.
They will work hand in hand with our banking facilities there, and each will
develop the other.
Suggestions in regard to our banking laws.—The manager of the
foreign department of a national bank replies that the securing of—
* * * Increased trade—both domestic and foreign—very logically brings
#bout a corresponding demand for credits, and while the Federal Reserve Act
permits member banks to accept bills of exchange, they are not at present