The New York herald., 1920-12-27
Hoover for Credits Abroad.

tricts has not yet been sold.
Hoover for Credits Abroad.
Herbert Hoover finds that the farmers
are suffering great losses because OF the
stagnation in orders for our export sur
plus, in which connection 1t may be
noted that American exports fell Off
$4,000. 900 last month. The one way out.
Mr.. Hoover says. "is by the establish
ment of credits abroad, not the danger
Gus short time credits in which we are
already over extended. but the long time
investment In reproductive enterprise
abroad" He adds:
ITO me there is only one remedy. and
that is by systematic permanent invest
ment of our surplus in reproductive
works abroad. We have reached the
position OF many European States before
the war, that If we would continue our
advancement and prosperity we must
enter upon foreign enterprise. Short
time credits on consumable commodities
only stave off an evil day. They must
be long time investments of that char
acter of enterprise that will build up
the standards of the world, that con-
stantly recreate their power to absorb
our commodities. Our people are not
accustomed to foreign investments. We
have so far but little financial machinery
and personnel devoted to such purposes.
nor can we upbuild this necessary link in
cur new economic chain until our Gov
ernment Is prepared to give protection
and support TO Americans interested in
the development of American enterprise
abroad.
"It is far better that these problems
be solved by the process of business and
individual Initiative than that they be
attempted by our Government. The re-
sort to direct loans by our Government
to foreign governments to promote COM
merce can lead only to a dozen vicious
ends. In such loans our great nation
could not exact a higher rate than our
Government is paid. We could not enter
upon investment banking for our Gov
ernment, and under these circumstances
foreign merchants and manufacturers
would obtain such loans as sub-con-
tracts from their governments at lower
rates than our own merchants and
manufacturers can obtain at home.
Our Government would be subject to
every political pressure that desperate
foreign statesmen can invent. and their
groups of nationals in our borders would
clamor at the hall of Congress for spe-
cial favors to their mother countries.
Our experience in war shows that for
egn governments which are borrowing
our money on easy terms cannot expend
with the economy of private individuals.
and it results in vast waste. Our Gov
ernment cannot higgle in the market TO
exact the securities and returns appro-
pirate to varied risks that merchants and
banks can and will exact. Finally, the
collection of debt to our Treasury
from foreign Government sets afoot
propaganda against our officials. against
our Government, and there is no court
to which a Government can appeal for
collection of debt except a battleship.
The whole process Is involved in infla-
tion, in waste and in intrigue. The only
direct loans of our Government should
be humane loans to prevent starvation.
Loans by our Government upon the
guarantees of our merchants such as
those for which the War Finance Corpor-
alton was founded avoid much of these
difficulties. These loans. however, are in
the main temporary commodity loans
and do not meet the issue of investment
in enterprises abroad. / do not wish to
say that the War Finanee Corporation
should not as a last resort be revived,
but every avenue of private initiative
should be exhausted before this is at
tempted.
Every argument comes back in my
mind to the logical conclusion that we
must organize for long term foreign in
vestment."
Meyer Defends Corporation.
Eugene Meyer. Jr., and William G.
McAdoo speak for the War Finance
Corporation. Mr.. Meyer was managing
director of this corporation until it's ac-
tivities were cut short last May by
Secretary Houston. II was Mr.. Meyer
who went before the committees of Con-
gress to support a resolution for the
revival of the corporation. and despite
the opposition of Mr.. Houston a resolu-
tion to that effect was passed and is
now up for the consideration of the
President. Mr.. Houston has since inti-
mated that the President will veto the
resolution.
The Secretary has stated that there is
no demand for these agricultural prod
ucts and that revival of the War Finance
Corporation would only help the Steel,
General Electric and Harvester Corpora
tions
Mr.. Meyer describes as pure bunk"
the statements that Europe cannot
gather together the necessary securities
as guarantee for the goods that are
shipped by the United States. He thinks
that Europe is the one sure outlet for
the surplus of agricultural products
that are now in this country. Mr.. Nc
Adoo holds the same view. They both
sec the SITUATION III Ine same HRnt,
namely. that America has the goods that
Europe needs and that the only thing
necessary is to find way whereby these
same goods can be sent to Europe.
They both argue from the basis that
30 per cent of our exports are agri-
cultural products which are now in
much demand In Central Europe and
the Balkans. On this point Mr. Nc
Adoo says:
European nations desire our cotton,
grain and other products. but have no
credit. 1t is TO our interest to supply
that credit. ] therefore think that the
revival of the War Finance Corporation
Is highly desirable. I believe that Il
can exercise an immensely beneficial in
fuence upon the export trade II Il Is
operated on a sound and liberal scale"
Mr.. Meyer describes the War Finance
Corporation as an instrument to assist
in the orderly marketing of our products.
He thinks that the corporation could
easily fnd a market for its bonds with
out putting an additional burden on the
taxpayer But on this point Secretary
Houston disagrees with him. The Secre-
tary says that such bonds would compete
with other Government bonds and would
add to imitation.
AS to the War Finance Corporation
ana It's workings Mr.. Meyer has this TO
say:
AT the time that the War Finance
Corporation. in accordance with the Sec
fctary's request. suspended making fur
4. L.. Ill ~