New-York tribune., 1919-12-04
Says Europe Must
Have $500,000,00O
To Avert Anarchy
International Banker Says
Emergency Credit Needed
to Prevent Spread of Boil
shevism; Exchange Rates
Slump

Europe needs emergency credits ag-
gregating $500,00O,0Oo to keep the wolf
from the door and prevent the spread
of anarchy and Bolshevism, a banker
of international reputation declared
yesterday.
This amount, he stated, would be
enough to tide Europe over the worst,
and he expressed the opinion that it
can be provided through various agen-
cies, governmental and private.
The matter of advancing the $2,000,-
100000 to $3,O0O000, 900 in credits
needed for reconstruction, the banker
asserted, Is too big a problem to be
handled privately, and the situation
with regard to working out program
for taking care of such an amount has
reached deadlock.
The acute international credit situa-
tion was emphasized yesterday by an
other sensational decline in exchange
rates on London and Paris, which fell
to new low record levels. The pound
sterling dropped to $3.S7 in terms of
American money, off 51a cents from
the closing of the preceding day. The
decline since Monday amounts to 13
cents in the pound. At it's closing
level sterling was worth 81 less than
its normal parity. $4.S665. French ex-
change also slumped, the rate on Paris
going to the level of 1896 francs to the
dollar, whereas normally 5.18h francs
can be bought for a dollar.
Dealers in foreign exchange ex-
pressed the opinion rather freely that
the sterling rate would probably go
much lower. The foreign exchange
manager of leading national bank
said he would not be surprised to see
the rate touch $3.50. The market has
had to take millions of pounds of
sterling bills drawn against cotton and
sugar shipments, transactions in re-
cent days running p; high as $40000,-
900 to $50000.000. Transactions in
sterling yesterday were estimated at
$25,OOO,OO0.
In view Of the severe fall in rates
exchange bankers said they would not
be surprised to see steps taken to reg
ulate the exchanges so as to prevent
such demoralzation as has existed in
the market in recent days. Such a
movement. it was stated would have
to be made by the British Treasury.
No steps in that direction have been
taken as yet, however.
The $500,000,000 estimated by the
banker as being the emergency amount
needed to tide Europe over the worst
would provide clothing and food and
little more, it was stated. 1t was be-
lieved that if credits of that amount
could be extended in the aggregate
Europe could get through the winter
without great difficulty. That would
carry the situation through until next
spring, when improved conditions
might mako it possible for the bankers
to take up the problem of the larger
credits more SucceSSfullV
Bankers said they were not sur
prised at the policy of the Treasury. as
outlined in the annual report of the
Secretary of the Treasury, regarding
foreign credits. The bankers said they
realized that the matter was one to be
dealt with privately rather than
through the government, but that it is
SO large in its scope and the attitude
of the public toward foreign securities
is such as to make it impossible for
the banks to hapdle the thing alone.