The sun. [volume] (New York [N.Y.]) 1833-1916, 1915-05-26

republics so as to present q distinct
INIT in times Of emergency was ad-
vocated in the address OF Paul NJ.
Warburg Of the Federal Reserve
Board at the Pan-American Financial
Conference this morning.
Mr.. warburg said in part:
"Reviewing last summers events,
We may say that disruption OF ship
ming, trade and credit in the countries
o, this hemisphere might have been
less disastrous II, instead of relying
exclusively upon Europe for their
shipping and credit facilities, the
American nations had begun in time
10 develop and organize their own
large resources.
when the war began England
occupied a most advantageous stra-
tegic financial position. She had been
acting as the banker Of the entire
word, particularly by her system OF
acceptance credits. thus financing a
vast majority OF transactions inyoly-
Ing the importation and expectation Of
goods between nations.
But when the war broke out, all
countries were suddenly called upon
10 pay their debts and to finance their
trade from that time forward wherever
they could do 1t to their best advan-
tage. The consequence Of this situa-
ton was that England found herself
In the position Of q creditor calling
upon the entire world for the payment
Of debts due, at a time when shipping
and trade were d~isorganized. 1t was,
therefore. impossible within the short
time granted for such payment to
liquidate obligations by the shipment
Of merchandise, even though IL had
been previously sold under contract.
At the same time . British debt to
foreign countries was shielded by a
moratorium. so that the foreigner who
happened to be in debt to England,
yet unable to collect there any sums
due him. found himself able to settle
hk own debts to that country only by
buytng sterling remittances at most
txorbitant prices or by shipping actual
sold. British stock exchanges had
ven closed, and even those foreign
debtors who owned British securities
or securities which normally found a
market in England. by the sale OF
which. therefore. they might Rave
created balances with which to pay
their debts. found themselves debarred
from using these assets for the liquida-
ton Of their obligations.
Every Country In Confusion.
"Every country was thrown into con-
fusion. Not one remained sufficiently
undisturbed to be able to help the
others.
An English writer. now officially
connected with the British ExcheQuer,
has written a very able and interest,"
Ing book wherein he sums up the
condition then created as follows:
London was so strong that 1t did
rot know how strong 1t was. Conse-
Guently. being a little fiustered by the
suddenneSs OF the outbreak of the war,
on a scale that mankind had never
seen before, II made the mistake OF
asking its debtors TO repay it not the
thousands of millions that II had lent
IN the form OF permanent investment
but the comparatively trifing amoun
perhaps 158. 0o0. 900 or 200. 900, 900
pounds sterling)-that 1t had lent In
the shape of bills OF exchange dra wn
on Il and other forms OF short credits.
Thereby IL put the rest of the economi-
cally civilized world. for the time be-
ing, into the bankruptcy court. and 40.
finding that none Of its debtors could
pay, IL thought itself obliged to ask
for time from It's own creditors at
home
1T is not for us to criticise Eng
land for having acted in the premises
from a merely selfish point of view.
This may well have been her duty.
Her vital interests were at stake, and
In view OF the great catastrophe which
she had to face 1t was necessary that
she should muster from all parts of the
world not only her military but also
her financial reserves. Nor Is much
10 be gained by insisting, with the
British authority already cited, that
some Of the drastic measures which
England found il necessary to take.
and even her moratorium. might have
teen avoided II, Immediately upon the
beginning Of the disturbance, she had
been adequately prepared to issue
without hesitation an ample supply Of
emergency currency.
We must not blame England: we
must blame ourselves for having care
tssiy placed ourselves in this economi-
ealy dangerous position.
without venturing 70 analyze the
prohlems Of other countries, we may
ray with reference TO the United States
mat the responsibility for having been
caught tied hand and foot when the
crash came Is in two respects our own.
The chief lesson, however. which
sl American nations will a to learn
nom last years experience is that 1t
y nwis for the world to place its
financial dependence upon any single
nation. d
There IL no doubt that upon the
establishment of peace there will be
tendency on the part of many na-
IONS To emancipate themselves In this
respect, and we may add, with pro-
round conviction, hat IL is precisely
III tbs field that the United States
vii be destined to play an important
fature role.
Role for the United states.
This can be done in several ways:
FIRST, by the readiness Of our
%hks and bankers 10 enter this new
nela in a spirit of liberality and pa
p'ousm. They must he thoroughly
moued with the thought that 1t Is
neceSSary for the financial independ-
ence oil their country and for the Sc