The sun., 1919-06-14
THREE BILLIONS TO
PROTECT U. S. TRADE
Reserve Board Says Sum
Must Be Raised by
Private Initiative.
SAVING HAS TO CONTINUE
People Are Depended On to
Help in Preventing
Further Imitation.

WASHINGTON, June 13.-More than
$4,000. 900, 900 Of new funds must be pro-
vided by private initiative &, the next
few months IL the United States is to
continue its export trade at the present
high level. according to an estimate
made to-day by tho Federal Reserve
Board In tho Juno issue OF the Federal
Reserve Bulletin.
Cognizance was taken Of the doubt
expressed by some experts that the ex-
isting level can be maintained without
serious financial strain. With the sup
ply OF capital short OF world require
ments additional long term credits to
Europe would deprive this country of
needed money, while failure to extend
credit might result in shortened industry
and lessened demand for labor at home,
also retarding Euorpe's economic re-
covery, which 10 regarded as necessary
TO the establishment of normal con-
ditions everywhere.
One essential in the solution yet to be
worked out Is believed to be continued
saving by the American people to in
crease available capital.
Europe will owe tae United States
this year a balance of trade Of at least
turns on American holdings OF foreign
securities were estimated by the Federal
Reserve Board to be not much below
$600.o0o.oo0 annually, while the foreign
obligations maturing this year Will
amount to between 100000, 900 and
$7S0,000,00o.
Ten billion Limit In Advances.
The Treasury-'s advances to foreign
countries have been limited to $40, 00O,-
100000, Of which $500 900. 900 has
been expended. and most Of the remain
der, $500. 900. 900, allocated. An export
credit OF $1,000, 900, 900 may be made
available through the War Finance Cor
poration, the director of which, Eugene
Meyer, Jr.. IL now in Europe studying
the economic situation.
Accordingly. 1t was estimated that
means must be found to finance about
$500, 900. 900 OF new obligations and to
renew perhaps S6oo, 200, 900 Of old ones
"a gigantic. probably an unprecedented,
financial problem" the board remarked
but one expected to be solved
ut remains TO be seen how far the
credit OF $1,000. 900, 900 placed within
reach OF the War Finance Corporation
can be awaited OF in practice" the board
said. Whatever may be determined on
this score, II II not desirable that Gov
eminent direction OF private industry
should be continued longer than is abso-
lutely essential"
Government advances to other Govern
ments for the purchase of goods IN this
country naturally result, It was said, in
tendency to indiscriminate consump-
ton and moro or less uneconomlc use
of funds until the time arrives when
the continuance OF such a policy means
the increase OF an indebtedness which IL
passing beyond the power OF the
debtors to liquidate."
Dangers Are Pointed Out.
Private advances on the other hand.
II attempted at a rate greater than the
rate of saving. would mean further infia-
ton reflected In still greater increases in
the cost OF living" The natural ten
dtncy of the present time was said to be
TO try to accomplish too much in a short
time, with the situation rendered more
difficult by the fact that American In
vestors are so little used to absorbing
foreign securities
Confidence was expressed by the board
that the American banking organization
wac capable OF protecting tho country
against undue diversion of capital to for
eign development.
1T Is understood that the problem is
now fully under consideration" the
board added. and provision for the
needs of the future may accordingly bs
expected"