Harrisburg telegraph. [volume] (Harrisburg, Pa.) 1879-1948, 1919-07-25
SUGGESTS PLAN TO AID
IN FINANCING EUROPE
New York Banker Would Pool Her Needs of Credits and
Commodities and Then Merge American Re-
to Meet Them

New York, July %. To pool
Europe's needs of credit and COM
modities on the one hand and to pool
Americas resources to meet them Is
a plan suggested by James S. Alex
| ander, President of the National Bank
| of Commerce of New York. for re-
habilitating European countries and
enabling them to reconstruct their
warstricken industries.
Mr.. Alexander is a member of q
| committee recently formed to investi-
| gate methods for supplying Europe
with American money and goods dur
ing the reconstruction period. This
! committee was formed upon the suS-
I gestion of Henry 2. Davidson and is
| headed by j. L. Morgan as chairman.
| "A pool of Europe's needs should
be met by pool of Americas re-
| sources" asserts Mr.. Alexander.
THAT is. Americas resources should
| be applied to Europe's needs through
a great centralized credit organiza-
tion, with extensive powers of co-or-
| dination. This may sound like an
ideal plan stated in sweeping terms
but l think it's details can be worked
! out in practical concrete form.
survey rs Neeueu
There seems to be no existing ma
| chinery adequate to do so. There
! fore, a special instrumentality must
be set up probably in the form of a
great credit corporation with capital
enough to handle transactions OF a
size that would be involved, transac-
tions representing not merely the
| business of Individual concerns but
| the combined requirements of nations
"a necessary step would seem 10
b that surveys be made of the com
modify needs of the nations o1
Europe, that is, an estimate OF how
much copper, steel, cotton, wheat and
other supplies would be required Tor
Belgium and also for the other need
full countries.
THE supplies available in America
are great but they are not so grea!
| as to meet unlimited and unbalanced
demands. Therefore there should be
judicious rationing of our commodi-
ties among the nations requiring
them. in accordance with their needs
"In addition to this rationing ano
| ALLEGATION of commodities, there Is
| the question of establishing adequate
| credits in this country to be con
| sidered. The necessary credit viii
! be great, so that they must be car,
ried to the investing public OF the
| whole country in the form OF bonds
| or debentures.
Public Must Help
Because of the deferred maturities
| of these debentures, the banks are
not to be expected to absorb them
| There will have to be an appeal tc
! the general public on the grounds o.
| a safe and lucrative investment ano
! for the sake of humanity" Mr.. Alex
ander pointed out that this would be
a means of maintaining the business
prosperity and integrity of America
| and of protecting Americans from
unsound investments In European Sc
| curities.
| The security behind these deben'
lures should make them almost equa
| to Government bonds in point OF
| safety" Mr.. Alexander said. They
must be based on everything in the
| way OF collateral that Europe is able
| to offer. The individual European
buyer must be prepared to give 6
| general mortgage upon his entire as
sets. His loan should be further en-
dorsed by consortium of banks II
his own country, reinformed wher'
possible by governmental guarantee
Thus every debenture sold to al
!
hind 1t equal security consisting o.
the pool of all the collateral sup
piled by Europe. There would b'
no direct loans against the collater
! al of weak concerns or nations In
, dividually by the American investor
neither would the strong be allowed
to monopolize the benefits"
Mr.. Alexander declared that sum
cient credits must be extended u
meet the full requirements either o.
Europe as a whole, of the nations
of Europe, or of the individual in
dustries. The full needs of Europe
must be ascertained and met, ne salo
and this would make imperative al
economic survey of its requirements
Credits supplied should be mace
, available not to the nations OF EUROPE
as such he added, but to the specit'
interests within the nations properly
/ co-ordinated, that is. to industries
manufacturers, transportation lines
and even to municipalities requiring
/ funds for reconstructlon.
To put his plan into operation, Mr.
: Alexander said, there would have t'
be this scientific survey of Europe
needs" willingness of individual In
terest in Europe to coordinate theli
demands. to furnish satisfactory col
! lateral and to pay American rates
rather than European rates on loans
made by the proposed American cor
| poration.
From the American point Of view
he said, this plan is pred1cated on
| the willingness of American pro-
, ducers and manufacturers to co-or-
| dinate their selling plans, forming
commodity groups and permit the
ALLEGATION of their products to places
and in amounts according to need.
Another factor is the Willingness OF
the American public to buy the de-
bentures at a reasonable rate of in
terest. Still another is the co-opera-
tion required on the part of Ameri-
can banks to subordinate their in
vestment opportunities to the general
situation and not attempt to skim
the cream of European investments,
which they might be we'll able to do
on account of their close connections
abroad. 80
without this proposed organiza-
ton, said Mr.. Alexander, American
investors would have thrust upon
them many issues of varying values.
some based on the best collateral
and some on collateral of very un-
certain value! His plan, he pointed
out, would be means to protect the
American people from unsound in
vestments in European securities.
"I believe that unless some broad
minded scheme of this sort is adopt
ed there are grave times ahead.
solution of the problem of sup
plying European needs should not be