The Washington herald., 1918-11-08
FOREIGN LOANS
CALL FOR CARE
Liquidation of Advances1tc
Allies a Nice Problem,
Says Holland. -
SIT

When Thomas W Lamont stated
few days ago that prior 10 the ~aG
the United States owed ia forelsl~
countries four billion dollars. the esti-
. mate was generally regarded as ac-'
Curate, because Mr. Lamont is spec
cially qualified both by experience, ,sno-
information for making an estimate o.
this kind II agrees substantially witt
the estimate made by President Lore
although his figures were based solely
upon the amount Of railroad securities,
which were held abroad Mr. La.
mont's figures embrace all kinds, oT
securities. including probably invest,
ments made in real estate and mort.
cages in the United States. chiefly py.
English capital.
So swift and amazing have been The
developments OF the war that accord.
ing to Mr. Lamont this Indebtedness
has been substantially wiped out
There may be still held in Europe 9
considerable amount OF American Sc.
eUrities. and OF late there has beer
a strong disposition on the part or
those in Europe who possess capies
to buy American securities.
Nevertheless II is clear. Mr.. Ia.
mont intimateS that when a bal
ance is struck between what Eu-
rope owes US and what we sim may
owe Europe. the enormous prepond-
erance is in favor Of the United
States Within four years at least
three billions OF our former debt te
Europe has been. according to Mr..
Lamont. lquidsted directly. Pre-
sumably ne means by this that
American securities aggrega tins
this amount have been returned te .
almost imperceptibly absorbed by
the American people. But we have
done more than merely taking up
the offerings Of American securities
Europe placed in our markets. be-r
cause private capital. banks and m
dividuaIs have lent Europe Il may
be as much as $4,000. 90. 600. Ger
tainIy as much as 81 500. 900. .O00 In
addition to that the government
has loaned TO our friends across the
sea $500 OOO. 900 and undoubtedly
further loans are 10 be made.
Some OF those who are well In
formed are inclined 10 think that
before the government finds IL nc
longer necessary TO loan credit Or
funds t. Europe the aggregate
amount Of these loans may be sp-
proximately $4,000. 100000.
sum Will be Increased.
Here. then. are certainly s.. 90. 80
Of American loans. governmental afd
individual, which have been made &C
Europe within four years with Inc
n obabiIity that this amount will be
considerably increased before IL s
no longer found cNpedient or neces-
sary TO aid our friends. II may be
that when these loans are ended IL
will be found that they represent IN
I the aggregate not far from S12.OO0.b Boo
Coz
II needs no demonstration 10 prove
/ that il will take long time TO hp1Ii-
date such a stupcndOus Indebtedness
as this II must he carried along for
years. and the doing Of this rs one OF
7 the great problems which American
finance will be called upon to solve.
Z Already preparations are under way
to solve II.
1 Mr. Lamont estimates that for some
years the United States will be re-.
1 cciving in the form OF interest upon
. these obligations as much Of t41Bpoo. .
60 a year. This amount is only 1T
lie under the sum annually rcce Ivsd
in recent years by the United States
for its sales OF cotton in foreign
markets. There will be. thereTore,
E constantly flowing into the Cnjied
States. in some cases four times a
. year and in some cases two. a Ersst
volume Of funds which the payment
OF this interest obligation represents.
One OF the gratifying features asso.,
/ Ciated with this enormous internal
tional financing is the fact that Chose
who. like MI Lamont. have gwen
careful study 90 this question. are
D : 81. IL
! upon the obligations. The interest
! payments will be met promptly. sr-
Cept possibly in one case. and the
principal Of the debt will be gradual
ly, wisely and safely liquidated. so as
not 10 imperil trade conditions &C
I money market conditions throughout
. the world
Expenses to COntInue. -.. 8.
/ Meanwhile for two or three years
Al least the expenditures made by
/ the government chiefly at home surf
continue 10 be enormous. There -
/ TO he no let-up in the production Of
ships Mr. Schwab says that ship
, building will be continued with the
Z highest efficiency possible. even
though peace should come speedily.
II is not expected that our armies in
]
United States much before the Pres
I ideutial election two wears hence. lTh.
armies will be needed over there. not
'or fighting. but for eacefuI pur-
poses and for policing In order -to
! feed. clothe and otherwise care Tor
100000 men and to keep them we'll
equipped, so that IL sudden en1er-
Eencies should arise they will be sbler,
successfully To meet them. will In
vo!ve the expenditure OF vast amounts
OF money by the government
There are at least lGG0OOO0 men
now engaged in industrial war work
who win hv aud hy find that en-
ployment Of that kind Is no longer
open to them II may be a year or
so before the war industries close
down. But il is necessary now TO be-
gin preparations whereby these IN.
dustrlal workers may be led into
peaceful industrial pursuits as soo,,
as possible after the war Industries