The sun. [volume] (New York [N.Y.]) 1916-1920, 1919-10-02
Call. U. $. Guarantee Impractical.

Diminishing as impractical the un-
founded report that proposal to have
the United States guarantee the war
debts of the allies is pending. the bank
asserts that the most practical and help
ful methods by which the United States
can assist Europe are first, to add
accruing interest on European obliga-
tons to the principal for several years
until industries of those countries are
recovered fully from the war; second,
TO increase the sum of the credits, by
loans in the public market to aid them
10 obtain necessary supplies and equip
ment and so hasten their recovery.
European countries" says the bank,
will be able to pay their debts to the
United States and never miss the
wealth II they can have time to first
build up their productive organization.
But most likely the debts TO the Govern
ment of the United States will be
eventually transferred to the private in
yestors of this country and they may be
quite willing that payment shall never
be made. The investment fund of the
world is common reservoir, or
should be.
1T is not in the interest OF the indus
tries of the United States that the in
terest upon this Indebtedness or any of
the principal should be collected at an
early day The attempt to gather up ex-
change on the United States under
present conditions for the purpose Of
making such remittances would send
the exchange to higher premium and
create further handicap upon Ameri-
can exports in ali markets"
That trade with Europe continues at
the rate shown by the customs report
for August is explained, the bank thinks,
by assumption that private credits are
being granted for much of it, and that
considerable volume of securities are
coming TO this country.
buying Japanese Bonds.
on that point the bank says: ut is
known that there has been buying of
Japanese bonds in the hands of British
and French holders and that American
railroad bonds are still coming back
from all European markets. Moreover
the United States Government is still
making loans to the allied Governments
Under the $4,000. 100000 authorization.
The total of advances actually made to
June 90. 1919, was 80, 102, 2s5, OBS and
about s250.OO0.oo0 has been advanced
since June 80. Nobody is able to ac-
count definitely for the volume of ex-
change that is absorbed.
There ia a steadily increasing volume
Of reports from American exporters who
ERE finding their trade opportunities cur
tailed by the exchange situation. The
railroad equipment manufacturers could
DO any amount of business with Gov
eminent railways IL exchange was ON a
normal basis. Contractors for recon-
struction work in France could do BUSH
ness under normal conditions, but al
though winter Is drawing near little is
being done in rebuilding the ruined
towns
1T is not simply a matter OF prevent
ing America from getting reconstruction
contracts in Europe. The regular estab-
l.shed business is suffering. Even
though Europe continues TO buy food
and clothing materials, which 1t can get
nowhere else and must have. we are
losing our trade in competitive lines.
We are on the very peak of the world.
We have a brief monopoly of certain
accessories and raw materials. but every
passing month will reduce the scope OF
that monopoly. A buyer will shop
around from country to country until
he can find somebody who can supply
his wants. and the exchange situation
Will favor every country over the United
States"
There have been no Developments of
noteworthy Importance in credit negotia-
tons during the last month";" continues
banking corporations for foreign opera
Tons has passed the Senate and is be-
Tore the House committee. No doubt
ne enactment will give some assistance
by enabling particular lines of industry
10 cooperate in distributing debentures
passed on foreign securities and locali-
tes to take similar action In support OF
tneir home trade. But the best judges
OF the situation believe that adequate re-
Tet can be given only by a comprehen-
blve plan, under which one kind OF Be-
cTity based upon common collateral
snail be offered in all parts Of the coun-
tFy and the sale urged by an appeal in
hehaf Of the public interest. bringing
l'e old Liberty Loan orgapization into
use.
During the month Finland has OBJ
l"ned credit for &c, 900, 900 In London
VITA the understanding that the pro-
's'ds viii be expended there. Negotia-
N'hs Tor similar accommodations are
pending In the United States.
"A loan to Belgium Is pending and
"hl be brought out shortly The amount
" me otfsrinE viii DO 100000 oa-