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396 of $2,800,000,000 to London, has brought home to us the extent to which the London money market and the British investor have been our friends, indeed, our partners in what might be termed this colossal Canadian enterprise.

Continuing, he throws an interesting but thus far little-noticed side light upon the effect of this sudden change upon the foreign trade of Canada and in fact of South America and all relatively undeveloped countries. He well states that

Thus it would appear that, at a time when we ourselves are fearful of having to repurchase securities from England, our Canadian, and perhaps also our South American neighbors, are looking to us to maintain our foregnforeign [sic] trade with them, in a measure taking the place which England has heretofore held, by investing money in their enterprises.

It would be well for economists and bankers to read at this time Sir Robert Giffen's celebrated essay on "The Liquidations of 1873-76." This advice is especially apropos for those who see such rosy prospects for advantageous trade in South America and the other relatively undeveloped areas of the world. If history repeats itself the greatest danger, in a financial sense, will occur after the close of the European War and will be particularly great in the countries of South America, Central America, Canada, in fact all of the relatively undeveloped areas of the world. I do not want to be understood as discouraging the development of South American trade, but American manufacturers and exporters must proceed with great caution. They must look carefully to their credits; they must not manufacture goods without understanding the conditions of these markets; they must not overstock, nor put too large a portion of their capital into this field: they must be prepared to take losses and look for a larger proportion of losses than in the territory with which they are already familiar. Crusading for business of this character is expensive. It means no immediate profit. It is an investment which will yield dividends in the distant future. In short, it is the sort of business which can only be handled by rich, well established, prosperous concerns, which take it on as a side line, and which go into it upon the assumption that it is not an El Dorado, but that it involves a long and perhaps expensive campaign, the profits of which may be delayed for years.