The sun. [volume] (New York [N.Y.]) 1916-1920, 1919-07-25

Win the concerns OF Europe Here,
again, many concerns are much stronger
than others. To my mind this would be
a grave danger and one from which the
American public should be protected BY
the organized investment judgment OF
the country.
This mere statement OF the various
aspects OF the situation is indicative of
the unsound conditions into which the
world might be drawn. and demonstrates
that This transitional period from the
chaos OF war to the orderly processes OF
peace must be handled in a broad
minded, cooperative way. We owe II to
our own people TO interpose between
them and unsafe European Investments
some instrumentality that would obvlnte,
as far as possible, the foregoing dangers.
FOOL Plan Is Suggested.
ITO serve these purposes pool OF
Europe's needs should be met by q pool
OF Americas resources-that Is, Amer
ica's resources should be applied to Eu-
ropes needs through great centralized
credit Organization, with extensive pow
ers of coordination. This may sound like
on ideal plan stated In sweeping terms,
but think Its details can be worked out
IT, practical. concrete form.
There seems to be no existing ma
chinery adequate TO do SO. Therefore
special fundamentally must be set
up along lines recently suggested in
behalf of American bankers groups,
probably in the form OF great credit
corporation with capital enough to
handle transactions OF the size that
would be involved-that Is, transactions
representing not merelysthe business OF
individual concerns but the combined
requirements of nations
"A necessary step would seem TO be
that surveys be made OF the commodity
needs Of the nations OF Europe-that Is,
an estimate OF how much copper, steel.
cotton. wheat and other supplies would
be required for Belgium and also for the
other needy countries.
The supplies available in America
are great, but thoy are not so great
as to meet unlimited and unclaimed
demands
In addition 70 ratloning and alloca-
ton OF commodities there is the ques-
tion OF establishing adequate credits
IN this country to be considered. The
necessary credits will be great so that
they must be carried TO the investing
public OF the whole country in the form
of bonds or debentures.
Because of the deferred maturitics
of these debentures the banks should not
~ SApcNtNu " dDSoip thcIll. lutIt VII
have to be an appeal 10 the general
public both Oh the ground of a safe
and lucrative investment and for the
sake Of humanity. These are the i'm
mediate aspects of the matter. but back
OF 1t all We must not forget that ii will
be, in the last analysis, means of
conserving and maintaining the bust
ness prosperity and integrity OF the
whole nation in the long run, and to
protect our own people from unsounJ
investments in European securities
The security behind these debenturc :
should make them almost equal to Gov
eminent bonds in the point of safety.
out We must not overlook the fact. also,
mat America must respond 10 the sale
o. these debcntures in spirit OF hu-
inantty. Business and humanity are
two great social forces which must
work together in the present problem
security Behind Debentures.
''As to the security behind the debcn-
lures, they must be based OH every
thing in the way of collateral that Eu-
rope is able to offer The individual
European buyer must be prepared TO
give general mortgage upon his en-
tire assets His loan should be FUR
ther Endorsed by consortium OF banks
possible by governmental guarantees.
Thus every debenture sold to an Ameri-
can investor would have behind 1t equal
security, consisting of the pool of all the
collateral supplied by Europe. There.
In other words, would be no direct loans
AGAINST the collateral OF weak concerns
or nations individually by the American
investor; neither would the strong be al
lowed to monopolize the benefits.
These credits should be made avail
able not TO the nations OF Europe as
such but to the specific interests within
the nations. properly coordinated--thst
is. TO industries, manufactures. transpor-
tation lines and even to munfc palities
requiring funds for reconstruction, 80
that they may be able to restore their
business activities"
Mr.. Alexander then stated the fore
going plan is based upon a scientific sur
vey OF Europe's needs, the willingness
Fof individual interests in Europe to CO.
ordinate their demands in accordance
with the general situation, the willing
ness of Europe to furnish satisfactory
collateral as a basis for hebenturcs 10
be sold in the United States and will
ingness OF Europe to pay American rates
on her loans rather than European rates
which have been notably lower hereto
fore than American rates have been.
From the American point of view, the
plan is predicated upon the Willingness
of American producers and manutac-
turers to coordinate selling plans in &C
cordance with the general situation, the
willingness OF the American public to
buy debentures at a reasonable rate OF
interest and the willingness OF American
banks to subordinate investment oppor-
tunities to the. general situation rather
than to try to skim the cream. From
both points Of view, Mr.. Alexander
stated, all should realize the necessity
OF good faith and sincere cooperation in
a big Job which must be done Jointly,
Temporary Arrangement UtSed.
lie believes that the plan must be
only. TO exist for the time Europe will
need to resume her normal productive!
and export volume. Then, when the
world Is restored to a normal state OF
exchange of commodities and service, the
plan should be abandoned. His final ar
gument Is phrased thus:
I'm effect, the plan outlined would
serve to place in the hands of Ameri
can investors securities OF standardized
certain value, based solldly on the tota
collateral OF the borrowing nations
Without this organization American In
yestors would have thrust upon then
many issues OF varying values, some
based on collateral OF very uncertain
value. l believe that unless some broad
minded scheme OF this sort Is adopted to
avert this latter unsound condition theirs
are grave times ahead.
PLAN TO NEUTRALIZE