New-York tribune., 1919-03-30
"What Foreign
Investors Should
Kn0W about Debtors"
Financial Editor Of The Tribune:

FINANCIAL Edlt0r or The Tribune:
Sir: Tho Tribune published on
March 10 mn article by MIR. Fred +.
Kent, director Of tho division Of for
cgn exchange OF the Federal Reserve
Board, on "What tho Foreign Investors
Should Know About Debtors" All
those who have at heart tho develop
mcnt Of American influence abroad
through the medium Of foreign trade
and foreign financing viii entirely
agrco with his conclusions.
Mr.. Kent has placed at the head of
the very comprehensive list Of points
which should be examined by mcr-
chants, banks and investors alike, in
connection with their foreign dealings,
the study of "thc laws and customs
Of the country in which we would in
vest, to see that they are honorable in
their buiding-up and that they are
fair to the foreign investor.'
May | suggest that the present dc
libcratons of the Allied governments
in Paris and their eventual outcome
Will have an important bearing on this
aspect Of the question and that, ac-
cording to the decisions which may
be arrived at, the efforts Of those who
will be called upon to popularizc for
Clgn investments in our country viii
be facilitated and advanced or not?
1t may be assumed that the eminent
financicrs who represent American in
forests in the economic and financial
councils of the Allies in France fully
realize their responsibilities in this
respect.
Since the armisticc was signed
good deal has been said and written
regarding international Legislation for
the benefit Of labor minimum wage.
maximum working hours. etc Some
OF us who have noticed the measures
which have becu taken in vnrious
countries affecting the interests Of
the domestic and foreign bunk dcpos
itor (moratoriums) and holder Of Sc
curitics wonder whether American
capitM invested abroad, either in the
form Of cash balances or bonds or
bills or shares in foreign enterprisea,
should not niso receive. apart from
the special collateral upon which our
bGnkers WHY insist in each individual
case, the general protection Of uni
form laws, made either part and parcel
Of the League Of nations or established
separately by those countries who re
quire our co5pc for reeonstrue-
ton and development
IN concluding his very able pres
enfation Of the question Nh Kent Al
ludes to tie "seethine mass Of unrest
and Of false teaehnes' with Whith
tha world is confronted to-day Whie
impressed with the Imperative need
FOR lis to develop ctr markets abroad
the medium 0f foreign invest
ihHhts, II appears 70 The writer gf this
letter hat any Hfead nade by the
baaea settlement ~ the Nte ~ hef-
sonai ~ private property might lave
9 serious reaction upon the mind Of
the prospective investor and even on
the eNpofler IN the United States.
While we do not lack any longer
the initiative and courage necessary
to 20 out into foreign markets, both
for our own benefit and for the good
Of the country at large, should we not
scrutinize more carefully than ever be-
fore the privileges granted to us by
the laws and constitutions Of foreign
countries, the differences which may
exist between tho rights Of natives
and those Of foreign residents, and
whether we will be free ut all times
to realize upon our investment, should
we desire to do so, without any for
olGn legal restraint whatsoever.
Let us be on our guard lest we in
troducc into international law new
prccepts Liable to increase rather than
diminish the risks which are in
hcrcrt TO the expatriaton of capital.
As long as between the civilized ma.
tons Of the world treaties are not
considered AZ scraps OF paper, let Us
firmly insist. before loaring our funds
to foreign borrowers, upon uniform
legal guarantees protecting our hard
earned savings against any cncronch-
mont on the part Of foreign govern
ments or nntions; let III demand that
under no circumstances whatsoever
can the rights to Il bond, Il share or
II balance owned by an American citi-
zen be contested or jeopardized Free
dom of the seas may be chimera but
until the outbreak of this war capital
has always been free to migrate ac-
eordine to the whims Of its owners
Our French friends have sent in wears
gone by thirty billion francs into Rus
sia. They have invested hundreds of
millions IN Germany and Austria, and
probably several billions in Turkey
and the Balkan states. Let us profit
by Their sad experiences.
The path of the worlds banker"
IS paved with thorns, to-day more so
Ihan ever. The young and inexperi~
snced American investor will tread it
n safety only if our government and
rs financial counsellors have seen to
It that, apart from all material Sc
'urity for the repayment OF the CAPT
'al and interest, his property rights
IRE saIegunrded by universal ironclad
avs and by formal declaration of
policy on the part Of the political
'arty IN power that these collective
md individual property rights will be /
defended, If necessary, against friend
'r foe with that same stern dctermina
.ion with which we have entered into
md brought to a conclusion the fight