The Washington herald., 1919-03-29

ly equal to the total credits which
our government is authorized to ex-
tend to our allies across the sea.
But this trade balance is nothing
else than the difference in favor OF
the United states between the
money value of commodities export
cd from this country over the money
value of commodities imported.
Debt to United states.
The question that puzzles our
abler fnanciers is this-how is this
balance to be Hquldated? IT. stands
by itself as debt TO the industries
of the United states. In it Is not
included the $4,000, 100000 in the
form of credit which our govern
ment at Washington has placed at
the disposal of the nations with
which we were associated in the
war
That is another affair. and 1t win
have to take care of itself. Probably
ultimately these credits will be plac-
cd in the form of long time bonds
bearing a good rate of interest and
held in the Treasury Department.
They will serve as a national invest
ment and will bring in each year not
far from five hundred million dollars.
II seems to be the view of our
financial leaders that in order to
liquhlate this trade balance or some
part of it. and in order also to provide
the facilities by means of which the
other nations may continue to buy
heavily in the United States, It will be
necessary to place very large private
loans in this country. The compara-
f.l, ha
lent to Japan at the time of her war
with Russia and which were spent
here for war material of which Japan
then stood in need. would in compare
son with present needs of other ma
tions be 80 trivial as to be almost
unnoticeable. Hundreds Of millions
will be needed II other nations or the
people of other nations are to continue
TO buy commodities in the United
States. Therefore. a plan already
seems to be vaguely outlined whereby
great loans can be made not by the
government. but by the banks or men
Of capital But these loans cannot be
made unless ample security is given.
our government may advance credits
to Europe without taking anything In
the form Of security excepting de-
mand notes. Nevertheless, behind
these demand notes are the good faith
the credit and the resources OF other
nations than our own. But private
loans, made in the United States,
must be based upon visible and nego-
table security. When the question
was asked this morning II It Is to be
presumed that security Of that kind IN
sufficient amounts can be provided
the ansXUar was that there could be
no doubt Of this.
Therefore, We may see, in little
while. large loans made by banks and
individuals to those who want to buy
commodities in the United States, but
with the understanding. as was the
case with Japan, that the funds thus
obtained shall he exclusively utilized
in paying for commodities bought here
No one can tell how vast a debt will
be created in addition to that which
Is already owed to the United States
But it will be so great and will be
so long continued as TO make it in
evitable that we maintain our pre-
eminence, although it is known that
England is now preparing to put a
merchant fleet upon the water at SO
low cost of construction and opera
ton as to make It possible to secure a
great part of the ocean-carrying trade
which originates in the United States.
"HOLLAND"