Prior to World War I, almost the entire export trade of the United States was handled by a dozen New York foreign trade firms, with branches and representatives in major trading centres of the world. American manufacturers sold directly to these exporting firms and received payment from them. The reason for these arrangements were the hesitancy of U.S. manufacturers to extend credit terms to foreign buyers, and the unwillingness of foreign buyers to send cash with their orders. Export merchants were responsible for buying and selling, undertaking credit investigations, invoicing, drawing and negotiating bills of exchange, and holding foreign currency balances.1 In short, they enjoyed a strongly entrenched position in the foreign trade field.
KeywordsForeign Exchange Foreign Trade Foreign Currency Large Bank Business Development
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