China | 8,402,995| 6,352,337| 125,106,020| 80,041,851 British East | | | | Indies | 20,992,304| 17,138,997| 259,629,897| 201,190,844 Japan | 23,692,557| 17,268,621| 253,669,709| 182,090,737 Australia and | | | | New Zealand | 7,403,284 | 1,682,769| 32,002,203| 55,826,228 Philippine | | | | Islands | 4,633,395 | 2,718,912| 62,386,641| 34,162,081 Egypt | .... | 2,944,041| 27,352,444| 29,533,795 -----------------+-----------+-----------+-------------+------------- It will be seen from this table that our commodity trade balance with Spain was in our favor by fifty-five million, five hundred eighty-seven thousand, six hundred and ninety dollars. Therefore, Spain needed fifty-five million dollars more than was due her on the difference of shipments to Spain from the United States of commodities, and the shipment of commodities by Spain to the United States. Why, then, was not the dollar at a premium instead of the Spanish peseta being at a premium? The reason was that the United States had loaned to her Allies two billion dollars more than the favorable “trade balance” of the United States, and these loans in terms of dollars had been used by our Allies to settle their debts with Spain, as an international commodity trade creditor to an approximate amount of over a hundred million of dollars in value, who did not need these dollars, or pounds sterling, or francs. The Spanish banks did place substantial balances in Paris, London and New York, but there was still due to Spain for commodities a large amount which had to be settled in some way. Great Britain, France and the United States had an embargo on gold and we could not settle these balances by gold because of the gold embargo. If we had settled the balances in gold the dollar would have gone to par and so would have the pound sterling and the French franc, but we were compelled, because gold was not available, to borrow this money from Spain in some form or other, and it was borrowed in some form or other from Spanish merchants, business men, and Spanish banks in many ways, but those who borrowed the pesetas from Spain, or those who loaned our people the pesetas in Spain, sold those pesetas to the citizens of the United States at a tremendous price. The credit extended is taking advantage of war conditions to extort an unendurable price for the use of this Spanish credit during the war, and fully justifies adequate steps being taken to correct it. PENALTY OF APPRECIATED CURRENCY