New-York tribune., 1919-07-17

The talk of the day is at present Ameri-
can-European cooperation.
There are American goods needed
abroad; there are American producers who
want to sell their goods.
At first sight this seems easy. One thing
surprises me above all:
l frequently hear proposals brought for
ward for solving the European situation.
This impresses me in the same way as if
a competent person tried to find a single
rule to feed all animals, and was proposing
the same diet for an elephant and
donkey, a camel or a Broadway chicken.
In Europe there is still more difference
between the various nations than between
the countries of the American Continent.
How would it appeal to you if the same
business methods were proposed for the
United States, Mexico or Central America :?
French people believe that their credit is
very good At the beginning of the war
there were 5,00o,0o0,O00 to 6OOO,OOO,OO0
francs of trade acceptances outstanding
In forty-eight hours 100000 men were
modified and 100000 more in the next
fortnight. Of course, this stopped practi-
cally everything, and the only remedy was
to proclaim a general moratorium. Now
of these frozen bills to date only S00,0O0,-
600 francs are still unpaid, and it is ex-
pected that finally not more than half of
that amount will remain unpaid, being
practically only the bills drawn on people
killed or ruined by the war.
We have established large, new institu-
tion to make loans to the people of the dew
astated regions and discount the indemnities
allotted by the French government The capi-
tai is subscribed, and any day, upon ratifi-
cation of the charter by the Parliament, the
"Credit National" will start its activities.
Our investment market is good, industrial
bonds and notes are easily absorbed; the
City of Paris just issued loan of 15OO,-
100000 francs, which is quoted at per cent
premium.
We have two big problems still at hand,
the first concerns us only. 1t is financing
definitely the French government through
conversion into long term bonds of the
short term securities and the surplus in
debtedness at the Bank of France. This is
a big job We will do it, We know how
to deal with the French people,
Our methods are perhaps not so brilliant
as yours, but we succeeded with them after
the war of 1870, where we were beaten;
therefore, being victorious o-day, am per-
foc+1 4L,%
successfully once more.
The second problem which interests you
is our exchange and our foreign purchases.
We are just in the same position as a rail
road with maturing bond issue. How does
good railroad pay? 1t has no money, it
has only equity
Therefore it has to borrow again until it
can repay by instalments, through a sink
ing fund.- what it owes.
Besides, the railroads issue also equip
ment bonds to buy whatever material they
need to assure traffic.
All this is considered very normal here.
country like mine is exactly the same
on larger scale.
We were perfectly balanced before the
war; we were even loaning half billion
of dollars year to foreign countries
But during five years we only attended to
the business of not being beaten by the
Germans.
Therefore have neglected our export
trade and accumulated an adverse foreign
balance.
Our exchange is bad at present, because
foreign credits are smaller than our needs
temporarily. Dollars are scarce, and, as
we have all sorts of stocks to replenish,
the demand for dollars is bigger than the
supply, and, like wheat after a bad crop,
they rise in value.
But we still have equity, good equity.
lots of equity, behind the francs, and if it
was only question of its intrinsic value
you would not get francs at $50 for
dollar. AS soon our industries are on
their normal basis again, as normal COM
munications and travelling have resumed.
francs will not only have equity behind
them, but will again be in demand all over
the world.
Therefore the whole situation sums I'M
in this: AS We short of dollars for
time, how can we buy American products
and how can pay for them to-day? For
railroad the Americans are satisfied to
take its securities. Can we place our Sc
curites here? That is the problem.
There is no doubt that there are at least
one million Americans who would gladly
take one French bond of S1oO or more.
This would make a large sum, which
would speed up our reconstruction and inside
reOrPa niZatiOn tremendously
But how to reach those willing purchasers,
it IS what neither ourselves nor our Ameri
can advisers and friends have been sbIe to
find out yet.
Of course, we are here passing through
sort of moral crisis at present. 1t reminds