New Britain herald., 1915-10-18
EXPLAINING THE LOAN.

by fourteen leading financial men in the nation, setting forth just what the Anglo-French loan means to the United States, it would be difficult to find any person of open mind to enter objection to this transa ction. To complain, after all the ramifica- tions have been brushed aside by fourteen such men as those over whose signatures the explanation of the loan was presented argues oneself but a tool of some particular interest that has already discredited itself by issuing falsehoods against this great loan.
 There is no reason to doubt these men when they affirm that the se- curity upon which the loan Is based is absolute; that We are loaning the money so France and Great Britain may purchase from us things which we want to sell them; that not one dollar of the money will leave these shores; that some Americans, directly, or indirectly, will come into possession of it in cash payment of goods sold; that a commercial credit will be established in this country to be used for increasing our trade and taking care of our surplus products; that in order to further American trade it is absolutely necessary the United States become, a creditor nation.
 AS a teacher of economics unfolds tc his class the intricate workings of laws pertaining to that subject, so these financial men have put into a nut shell the various reasons for Americans subscribing to the $500.- O00,O00, loan. Pointing out that this country has not been accustomed to extend credits upon so large a scale to foreign nations, and that many people do not understand what such credits mean to the maintenance ot our agricultural and commercial in terests, the fnanciers express their opinions by setting forth the follow ing plain facts in the case:-
 During normal times Great Britain and France purchase from us, every year, about $75O,O00,O0O in farm products and other commodities, and We buy heavily from them. Ordin- arily the payments by one coun- try to the other are accomplished
 without the shipment of coin,
 the indebtedness of one country
 going to offset that of the other;
 and the difference, usually con-
 stituting small balance is cov-
 cred by gold shipments or other
 wise. ''"' '...'' '"' l'~'"3ft-. ~. Now, owing to the war, our
 two chief customers, have fallen
 off, and their purchases from us
 nave increased enorm ously. Thus the total trade balance in our 1aVor Tor the year ended last June was over one billion dollars:
 of which $947, 100000, or over
 86 per cent, was represented
 by the trade balance against
 these two countries It is clear
 ly impossible for these countries
 to continue to meet these heavy
 balances through the ordinary
 channels of international ex-
 change. Such heavy shipments
 of gold as would be required,
 for instance, are not only diffi-
 cult, but in these days unwise to
 undertake. Moreover. this coun-
 try already holds a stock of gold
 larger than it's immediate uses
 require.
 America must, therefore. find
 a solution of the problem of fin
 anc1ng for time this favorable
 trade movement; or else run the
 risk of losing a large part of it's
 export business; for the United
 States appears to be by no means the only country in the world
 where Great Britain and France
 can buy, on favorable terms.
 the grain and other commodities
 they require. If these two great
 nations are obliged materially to
 decrease tn cir purchases from us.
 the result may be lower prices
 for our farm products, and less
 work for our factories"
 To put the thing in terms for the layman, the United States wants France and England to remain tue same good customers they have al- ways, been, so they may add to the prosperity of our communities, and, to do this, we must allow them to settle by some system of deferred pay- nents for the commodities they buy from us." This loan, amounting to only two-thirds of what France and England purchase from us each nor- mai year, is merely a system of de- ferred payments. We are simply lend ing them money so they may buy from us things which we really want to sell.
 Coming from Americans whose