The Washington herald., 1918-08-20
REPAYMENT OF
LOANS ABROAD
Holland Says Interest Can
Only Be Collected by
Reinvestment.

4Shtael MOnlez. VINO mas Dcen sO-
tourning in New York City for sew
eral days. accepted the invitation OF
the Pan-American Association TO be-
come its guest at a dinner. the date
of which was ixed for the nine
teenth OF this month. This Is the
last and perhaps the most import
ant Of many courtesies which have
been extended to ex-President Mon
tez and, In fact, he has had so many
j INVITATIONS which reflect the esti-
nation in which he is held in New
Work. that had he accepted all of
them he would have found little or
no time for some important busi-
ness which had in view the increase
OF our commercial relations with
Bolivia. Within a few days ex-
President MONTH"; will be in Paris.
for he has been appointed by the
Bolivian government minister to
France. an office which he held be-
fore he became President of Bolivia.
The relations between France and
Bolivia are very cordial. but IT is
not expected that they will take on
commercial and international trade
interests such as Bolivia Is now at
tempting to increase with the United
states. while, on the other hand, the
United States is prepared to give
cordial support to any measure
which has for its purpose the in
crease Of this commerce.
wnshlnStOn n Money Center.
EX-PTesident Montez recognized
the fact that New York and Wash
ington have now become the money
centers OF the world and also are
likely to remain so until long after
h ~, -la
Of this year the United States will
have lent to our allies approximately
$4,000. 900. 900. In addition to that
our government is furnishing credit
- hereby other nations may find 1t
Nsicr to trade with the United
States. There are many things
which President Montez will be able
TO say to his friends in France, for
he has been told in some detail
what the commercial and financial
outlook in the United States now is.
Not the least interesting OF the ques-
tiCnS which are now under conSidera-
ton at Washington and by our lead
ing men OF finance Is one whose
answer would show how the United
States can receive payment from the
allies for the stupendous loans which
We have already made and which We
war II ended. II was stated to Presi-
daut MOntez that the interest upon our
foreign loans will speedily approximate
SJG.GC0.1O a year IL in fact 1t has not
already reached that figure. How then
are our debtors across the sea and In
South America-for we have loaned
money to South American nations
to find the means with which this in
crest can he paid. II cannot be done
through the return to the United
S.atcs Of American securities which
1cfOre the war were held by citizens
4ud banks Of other nations. The best
estimate was ut the beginning OF the
WIT that our foreign indebtedness rep
resented by these securities was some
-sshcrc between $500 .Ol0, coo. and s5.00o,-
-O",Wr That indebtedhess haS prsc-
italy been wiped out. For in addi-
/ To- to our other stupendOus financing
n American markets have absorbed
rerrIv all of the securities which be-
fore 1911 were held in Great Britain
md Europe.
COLI VIII Not Avail.
This interest obligation of 100000
or more cannot be met by sending gold
10 this country. for there Is not
enough gold in the possession Of our
allies to make payment of that kind
-r,SSsibIs Probably Great Britain will
,i,.ieavor after the war is over great
y to increase her exports to the
Tuitcd Stntes But the impression is
strong that this will not be possible at
east for some years after the war is
ended. There appears to be then only
one way in which the interest and
Ultimately the principal representing
the fudC btedness the world owes TO
tho United states can be met. And IN
this plan Bolivia and other South
American nations will be greatly and
-ratifyingIy Interested For i. seems
ln he the view that the only sound
wav in which these obligations can be
r,.et will be through the investment
Of This debt and the reinyestment of
il in other nations. \ great deal OF
money will be needed for the up-
building Of France and Belgium ard
f1kome extent Of Italy. We can pro-
vade that money by utilizing some part
Of the Indebtedness foreign nations
owe to us.
Field for Inveztment.
Probably there will be very large
investment OF American funds in South
america, and already steps have been
taken to facilitate. through ihe utiliza-
ton Of credit. commerce between ihe
United States and some ~ TIE South
American nations. The opportunities
mr., magnificent for the investment of
American capital in SoItn America.
The late James Stillman was accus-
,1nled to speak OF these opportunities
with enthusiasm, believing that in
time American capital in The aggre-
gate Of many millions woul1 be in
vested in South America These are
10 be used in increasing transporta-
lion facilities and also i'm the develop
meut of mines and some Of the very
( great agricultural resources I'm South
America. many OF which have not yet
hcen touched.
The visit of President Montez to
New York was coincident in point OF
time with the perfecting OF an agree
ment between Bolivia and the United
States whereby a fund of 500, 900,
which may be increased to $40. 10000 is
established in the Federal Reserve
Bank in the name of the Bolivian Min
lister at Washington. With this ar
rangement President Montez had
nothing officially to do. although he
knew IL. as he also knew that Argen-
tia and the United States have per-
fected a similar agreement. The es-
tablishunent of this credit in the Fed
eraI Reserve Bank will undoubtedly
tend to increase our purchases OF
Bolivian products. As we already i'm
| mort from Bolivia more than we ex-
port to that country. il would be
necessary to send gold to Bolivia to
nav trade balances unless an arrange
ment OF this kind were made. Fur
thermore the establishment of this
fund will 50 trend to stabilize Gx-
change as to remove one obstacle
which has stood in the way somewhat