otherwise meet the trade conditions of different countries. Growing out of this will be a stimulus to exporting business. Firms can hold goods for an indefinite period without the payment of customs taxes, often equal to the cost of the article itself.
3. Such ports will upbuild our banking and financial relations with other countries. It will shift to America an increasing share of international exchange. It will make America what, by reason of its size and natural resources it should be, the clearing-house as well as the financial reservoir of the world.
This is an opportune time for the development of the free port, even though only one or two experiments are made. A large part of the shipping of the world has been driven from the seas. English, German and Belgian bottoms are in danger of capture. Old trade routes and commercial connections have been destroyed.
In addition the opening of the Panama Canal will still further dislocate trade routes, just as did the opening of the Suez Canal. It places New York, New Orleans and San Francisco in a far different relation from that which they previously occupied.
The recently inaugurated Federal Reserve Bill makes possible the development of branch banks and the working out of international credit, which will go hand in hand with the upbuilding of over-seas traffic and the merchandise and consignment business that exists in countries where free trade prevails.
Finally, America is the natural country to be the counter or clearing-house of the world. Our seacoasts face every other continent. This country is the greatest of all reservoirs of raw material and food supplies. It has unlimited iron, coal, copper and other mineral resources. In the iron and steel business and in other industries that are easy to standardize we are in position to compete with the world. But these advantages are of limited value to us so long as means of cheap and expeditious transportation are denied, or so long as it is necessary for our products to pass through foreign hands. And these conditions, the upbuilding of our marine, the development of our foreign trade, the extension of international financing depend upon means of clearing away the obstacles which now place America at a disadvantage in comparison with the free ports of Great Britain and Germany, which are the present clearing-houses of the world.
| ECONOMIC IMPORTANCE OF AMERICAN NEUTRALITY |
By Professor GORDON E. SHERMAN
YALE UNIVERSITY
NEUTRALITY, regarded as a conception of international law, "consists in abstinence from any participation in a public, private or civil war, and in impartiality of conduct toward both parties"
