Svenska Kuriren -- January 01, 1920Trade Exchange between Sweden and America
The Swedish Consul General in New York, Mr. Olof H. Lamm, requests us to correct a faulty statement contained in the telegram from Stockholm, which was reprinted in our newspaper. The telegram in question stated:
"The administrative commission, which examined the economic situation, supported restrictions on imports to restore the trade balance."
The Consul General has received the following telegram from the foreign department in Stockholm:
"No such control has been introduced in Sweden. The proposal made by the finance counsel has for its aim, mainly, to limit the importation of luxuries, which measure, likewise, has been discussed in Norway and Denmark, but no decision has yet been arrived at by the administration in this matter."
The only error we find in our reproduction of the first telegram appears to 2be that such a measure has not been acted upon (to restore the balance of trade). That this statement be quickly corrected, seemed important to the Consul and the correction is hereby gladly made.
Mr. Lamm felt that if the impression were created here that Sweden was limiting imports from the United States, it would be harmful to both countries. No legislation against American goods is, in any way, contemplated in Sweden.
The same issue of Svenska Kuriren (The Swedish Courier), in which the incorrect telegram appeared also contained a longer article by Mr. Hal O'Flaherty, correspondent of the Chicago Daily News, the New York Globe, and a number of other American newspapers in Stockholm. Mr. O'Flaherty speaks of the imminent difficulties in trade relations between Sweden and America. He appears to know that many shipments of goods purchased in America for Sweden are to be refused by the consignees, because heavy loses will be incurred, due to the drop in the rate of exchange, on the Swedish Krona (crown), since the purchases were consummated.3
O'Flaherty maintains, also, that the Swedish merchant, in such a case, will follow the example of the Danes. He relates in this connection, that American goods, arriving at Copenhagen, were shipped back to New York by the Danish buyers, and there sold at a profit.
The case mentioned does not indicate that American shipments were refused by the Danish consignees, but reveals the highly remarkable circumstance that certain American commodities rose in price in America, in a few weeks or months, so that it was possible to pay double ocean freight charges and sell the commodities at a profit in the country from whence they were originally exported. But it is taken for granted that the Danish buyers accepted the goods. Otherwise, they could not command them and sell them on their own account in the United States.
The American correspondents charge that a number of shipments consigned to Gothenburg are going to be refused by the Swedish buyers has created a sensation among our countrymen here who are interested in seeing that trade relation between Sweden and America not only continue undisturbed, but that they be developed as much as possible.4
Protest against the insinuations of Mr. O'Flaherty have been proposed. For our part, we regard them as hardly worthy of consideration. We have no fear of discord in international relations for this reason.
As a rule, American exports are a "cash transaction." In unusual cases, when credit is given, one may be absolutely sure that the security for the fulfilment of payment is perfectly good. Besides, it is reported, truly enough, that hardly any Swedish buyer, making purchases abroad, cares to jeopardize his credit by refusing to meet his obligations due to a fear of losses unforseen at the time the deal was closed.
No Swedish court would release him from a contract for such a reason. It would be entirely different if the merchandise did not come up to standard. Such cases may very well occur, and there are, of course, quite a number of dishonest merchants even here in America.
We consider that we may leave Mr. O'Flaherty's story for what it is worth, which in our eyes is very little.5
Consul Lamm's writing gives us, in the meantime, reason to comment on the vexatious deterioration in Swedish monetary values, and possible remedies for the evil. It does no harm to recall that Swedish monetary values are much better than the Norwegian or Danish, not to mention many other European countries. But Swedish stands noticeably poorer than Switzerland and Spain, two neutral countries.
Despite the many scientific articles which daily offer "certain cures" against price increases, drop in monetary values, and for the balancing of the international exchange, we believe that only time can work a restoration to economic health, just as only time can heal all the other "sores" of the War.
Financial leadership in Sweden is still greatly to blame for the unparalleled drop in monetary values due to an indefensible program of continued inflation.
Whatever the status of Swedish money in relation to the dollar may be, it is, of course, clear that the condition cannot be improved if Sweden continues 6to buy commodities from America out of proportion to her own sales in America. This is a circumstance which was brought to light by a prominent Swedish man of industry, Chief Engineer A. F. Wahlberg, on a visit here, when he said:
"There soon must be an end to alarm (sic). It should be recalled that the remark was made quite a few months ago, when the exchange was about normal, 26.70. It is now under twenty-two, has been still lower, but appears to have improved somewhat in the last few weeks. The prophecy may come true.
We believe that Sweden can import as much as she wishes of American commodities, and can pay for them. The fear that American merchants must be treated kindly so that they will continue to export commodities to Sweden for cash need not worry us. Instead anxiety should be directed toward the opposite quarter. How can we increase the Swedish production level and export a surplus at prices which may prevail in world competition?7
To work out this problem, all Swedish businessmen, manufactures, labor leaders, and financiers should give their attention. Without a doubt this is also the prime mission of the Swedish trade representatives in all other countries.
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