Evening star., 1920-02-15
NY SHELDON 3. CLINE.

Carter Glass, then Secretary
of the Treasury. wrote his
letter to the Chamber OF
Commerce OF the United States an
nouncing an end to government loans
70 Europe the question as to what
America can and should do to help the
war-prostrate nations get back upon
their feet has been pressing for an
answer. There has been alarm In Eu-
rope and confusion in this country.
For neither Is there any warrant
A high official of the administra-
tion. who has made deep study OF
the international financial situation.
puts 1t this way: What America can
and should do amounts to about
per cent Of the whole. The other s5
per cent the nations Of Europe must
do for themselves
Ameriea's Part Essential.
He did not mean to be exact in his
percentages. nor did he mean to be-
little the Importance of American as
sistance. Yeast is a minor ingredient
Of bread, measured in percentage fg-
ures, but without it the loaf will be
unleavened without the S per cent.
or whatever percentage it is America
can and should do. Europe will be
powerless to achieve the larger un-
dertaking. America could force Eu-
rope still farther along the road to
ruin by doing too little: it could work
almost irreparable harm by doing too
much.
Economic law is inexorable and
there Is no way in which Europe can
escape paying the penalty of war.
Free access to the wealth and re-
sources Of America might postpone.
but it could not avert, the reckoning.
And the longer the reckoning is post
poned the greater will be its pains.
Europe Is in something the case of
a man whose income has been cut
suddenly in two. He may borrow
money from wealthy friends and drift
along. hoping against hope that some
thing will turn up to save him the ne
cessity of reducing expenditures. Or
he may cut his scale of living to
square with his lowered income and
set to work to build his income up
again. There isn't any argument as
- the wiser course.
u. .. Now DolnG Mech.
On both sides of the Atlantic there
seems to be an impression that an end
to government loans means an end to
American assistance. This iRwholk an
error. America already is do2s much
and is prepared TO do moro-as much
more ~ 10 good for Europe The door
is wide open to sound and wholesome
credit. 1t ID closed only to the hasty
and reckless credits impelled by the
necessities Of war and to credits which
have not back Of them the basis at least
Of industry and thrift and good in
tentions. Credits amounting to hum
dreds Of millions Of dollars are being
extended Europe today. Credits are
available to the extent of billions.
Nor is II necessary that the borrow
ers shall have tangible assets to pledge
to the full extent of their borrowings.
A reputation for ability. industry and
fair dealing is as much a basis Of credit
today as It ever was. There is no ma
citizens of which cannot negotiate loans'
on that basis. But the borrowers must
demonstrate that the money is to be
used for necessary and constructive pur-
poses. and they must convince the
lenders of desire and ability to repay
They will have to make just such an
exposition. in fact. as any American
business N n IN Eo ha
TO his banker to arrange a line of credit.
But with this difference: the European,
AS a rule. will be favored in the mat
ter Of time. Conditions there call for
longer credits than is the case where
conditions more nearly approach the
normal
Germany's Case Different.
The above applies to the nations
which were associated with America in
the war. 1t doesn't apply as a whole
to Germany and Austria and the other
enemy countries They, too, will be able
to arrange loans in this country for the
furtherance Of trade. but they will have
10 furnish gilt-edge security as col
lateral The enemy countries. and par
ticularly Germany, have destroyed that
intangible basis of credit known ordi-
narily as confidence. If Germany is to
get any Oredit based on Confidence"
she must look to some of tine neutrals
who were not unfriendly to her cause
during the war
There are three major ways by
which Europe today can arrange and
IS arranging commercial credits in
this country. and in these three ways.
In the Judgment of sound students of
the international situation, can be
arranged all the credits it is good
that Europe should have One is
through the medium Of established
banking channels. A second, through
the sale in this country of foreign
securities and of American securities
still owned abroad. The third, through
the War Finance Corporation.
Ready to Lend q Billion.
To take the last frst. the War FL
nance Corporation stands ready to
loan billion dollars to finance Amer
lend a billion dollars to finance Amer
with revolving fund it's possibilities
of assisting are much-efeAters than
the stated sum. huge as 1T is. AS is
commonly known, the War Finance
eminent to assist American industry
in the production of war necessities.
Following signing OF the armistice,
it was continued in existence by act
of Congress to help American export