The sun. [volume] (New York [N.Y.]) 1833-1916, 1915-10-21
SOUTH AMERICAN CREDIT.
Federal Reserve Boards Refusal to
Establish Agencies Com mended.

To THE EDITOR OF THE SUN-Sir: The
action of the Federal Reserve Board in
refusing to approve of the establishment
of branches and agencies of the Federal
Reserve banks In South America Is GER
tainly co~inmendable. Approval of this
project, which had the sanction OF Presi-
dent Wilson. would have so placed the
United States Government as seemingly
to Justify Intervention to collect loans
and debts due such agencies or branches
for funds advanced by Federal Reserve
banks. Just why the United States
should approve such extension at this
time 1t Is hard to understand. Certainly
IL would be dollar diplomacy" of the
most questionable sort.
For the present the various South
American States are able to secure such
advances and financial assistance as
they may reasonably require OF private
banks and bankers To make this sort
OF business a United States Government
transaction would he casting doubt and
suspicion upon the assertions Of the
President as to the extent OF American
political. financial and commercial as
pirations In the control OF The policies
of those republics In their political.
financial and commercial relations with
Europe as well az with the United
states. IN dealing with South American
loans and credits IL Is we'll for the Gov
to let American banks and
bankers do the business on a safe bank
ing basis n keep the Federal Reserve
banks at home.
THe United States Government would
hardly care to enter into competition
with foreign banks in south America,
where credit information is almost UNI
obtainable and usually unreliable. There
competition il so keen that rival banks
lend II customer the entire amount OF
credit 10 which he is entitled. and the
borrower gets the same amount from
four or five other banks, thus overeX-
tending his credit because of lack of CO.
operation among foreign bankers
The development OF American COM
merce Is not dependent upon the estab-
lishment of Government banks in for
elgn countries so that tie customers
may be able to borrow American money
to purchase our goods. As markets
develop there will always he American
bankers 10 take ADVANTAGE Of the con-
ditions 10 open branches in South
American cities.
1t would be wise for the United
states Government to remember that
offers of excessive financial assistance
to South American states may have
an evil Influence. We have hardly lived
down with the South Americans the
charge made by Europe that we were
only awaiting the opportunity TO con-
troll TIE countries Of Latin America In
our W Interests regardless Of the peo-
pie or the financial and commercial In
~tcrcstS OF other countries
The Mexican middle 's SIN fresh in
the minds Of South Americans. and they
are fully cogn!zant Of the fact that the
\ Il g arbitration cane from Washing
ton and not from the Argentine. Brazil
and CHILE. \ leading editor in Buenos
Ayres has laughed at the statement that
the proposal came from tie three South
American Governments He believes
that Mr. Bryan was playing politics and
had got into trouble that threatened
seriously to affect American trade with
South America when the \ y c idea
came To his mind as a happy way Of
settling the business
There are men Of ability in South
America who are not u%ntrlendiy 70 the
United states. ana they are watching
American policies with regard to { cir
Countries with the kecnest interest. The
Washington Government cannot be too
careful II our trade with Latin America
Is not TO he seriously Injured. 1, il
eisier to send South America back 70
Europe for manufactures after the var
II II "a TO hold what trade We have
ana N't more FRANK y. WEST.
VINEYARD HAVEN. Mass, October 10.