In the establishment of American houses in these countries, as in many other respects, much may be learned from the Germans.  They bring out carefully selected young men.  These, if efficient, have sure promotion.  The partners retire before old age to make room for those who work up.  The inefficient are dropped.  It is a little like the principle of a good foreign service.

I think the most minute study should be given, first, to the nearer countries, say those north of the Equator, including the republics of the Caribbean.  Each country must be separately studied.  Primarily, there will be found a cry, sometimes desperate, for capital.  Public works, concessionary and otherwise, have stopped for lack of funds from Europe.  New developments in railroad building, mining, harbor works, plantations, are arrested.  Where European credits have been customarily used to handle crops, there is distress, and no less so in cases in which such credit has previously been given by ostensibly American houses operating really with European capital.

American capital may come to the rescue by advances upon good security through local banks.  It can establish banks or buy controlling interests in existing banks, many of which pay their stockholders 15 per cent. or more.  It can relieve the stagnation and make profitable investment by an active campaign for public and private contracts and for sound and fair concessions, not visionary or get-rich-too-quick schemes.

Supposably, the repairing of the destruction brought by the war will make European capital scarce for some years, but an effort will doubtless be made to retain for it its former preponderance in these countries; and so it is important that, whatever the war’s effects upon our own money markets, use should be made of such an opportunity as does not come more than once.

To be sure, the scarcity of money in the United States makes this difficult, but the same worldwide money scarcity will secure an especially high rate of interest in Latin America, where even in normal times money can often be placed on excellent security in some of the countries, and at a rate very high indeed compared to that prevailing now in the United States.  For safe investments with such a margin of profit, it is to be hoped that money, even if dear at home, will be forthcoming.

Undoubtedly the purchasing power of these republics has been hard hit by the cutting off of credits and markets by the war, as their Governments have been hard hit through the falling off of revenues from import duties.  Some of the Governments will require foreign loans.  Capital, I repeat—­and I mean really American capital—­is the urgent need.  We are not asked to make them a present of capital to buy our goods with, but if we do not help finance them and buy their products they will have nothing with which to buy our goods.