important and most sensitive one. At present we have a market called upon to respond to seasonal demands of a most widely varying character, and a currency lacking to a remarkable degree the quality of elasticity. Our deposit currency, though elastic in the absolute sense of the term, is one of the most inelastic deposit currencies to be found in any country with a highly developed banking system.

The securing of elasticity of currency and credit, not only in the infrequent panic periods, but from January through December of every year, is the big problem now before the National Monetary Commission.

Cornell University.

E. W. KEMMERER.

THE PROMOTION OF TRADE WITH SOUTH AMERICA

In the past twenty years and more, attention has been frequently called to the small share of the people of the United States in the trade of the countries of our sister continent to the south of us, and many writers and statesmen have urged our manufacturers and merchants to push into this territory. Indeed, Mr. Blaine, when Secretary of State, originated the idea of occasional Pan-American conference, or meetings of the representatives of the countries of the American hemisphere, for the purpose of promoting a better understanding, not only in political matters but in trade relations. Little result flowed, however, from his effort, and public attention seemed not at all aroused for the twenty years following 1884. But within the past five years

there has been more interest in the matter. The reasons for this revival of interest are numerous. Probably the most fundamental are the facts that we are having a decreasing surplus of agricultural produce to export, and that our manufactures show a growing excess over domestic consumption. Moreover, the digging of the Panama Canal has directed our eyes in the direction of our South American neighbors, and has called attention to the trade possibilities of that part of the earth at a peculiarly opportune time. Again, the revival of the Pan-American conferences in 1906 and 1910 has done a good deal in the same direction. These conferences cannot be said to produce very tangible or direct results. Indeed, they are mostly pour parlers into which some people seem to think it impolite to inject discussion of such base matters as trade. They have done good in making the representatives of the various countries better acquainted.

The conference of 1906 was especially favorable to the promotion of good feeling, because of the attendance of Secretary Root and the happy faculty he showed in winning the confidence of the peoples he visited. There was an aftermath of this good feeling at the conference of 1910. The indirect results of these conferences therefore, if they are continued long enough, will surely be good, although as yet little has come from them. of themselves they do not go far toward establishing a PanAmerican hegemony, either in political action, international trade, or political ideals. The establishment of Pan-Americanism in

And

any sense of the word, if it is ever established, will have to be on a sounder ground than sentiment based on the fact that we all happen to call ourselves Americans. The continuance of interest in these occasions will depend upon our success in convincing the people of the countries of South America that it is to their interest, as well as ours, to bind ourselves into closer commercial relationships.

One result of the efforts of Secretary Root in matters South was a renewal of interest in what has been known as

American, the Bureau of American Republics, but is now the Pan-American Union. Under the able direction of Mr. John Barrett this Bureau has attracted wide attention, not only in this country, but in the countries of South America as well. The monthly bulletin published by the Union is full of interesting statistical, descriptive, and pictorial matter. The erection of a beautiful building at Washington to be the home of the Pan-American Union, through the beneficence of Mr. Carnegie, has made a physical center of activity and interest which did not exist before, and doubtless will do much to promote friendly relations among the representatives of American countries.

It is not the purpose of this article to recite the oft told story of our failure to develop a large trade with the countries of South America. The statistics have been often published and are accessible in government publications as well as in general works. The purpose of the present article is rather to discuss some of the causes of the previously existing condition, together with some of the suggestions made to change and improve them. The constant iteration of the facts is of little importance, unless an examination of the conditions shows a motive for action on our part. Just as the political, commercial, and social ideal of Pan-Americanism can never be established by conferences, so trade cannot be extended by constant reminders of our failure to extend it. Many of our manufacturers and merchants who produce goods for foreign consumption, have been and are better informed, than either government officials or students, of the possibilities for trade in the countries under discussion, but under existing circumstances have not thought it worth while to enter the field.

Nevertheless, it may the general facts of South American trade. The figures are not available for all the countries for the same year, but a loose estimate of the exports and imports for 1909 is in the neighbor

make the situation clearer if we recall