Evening star., 1920-02-15
ny SHELDON 8. CLINE.


Carter Glass, then Secretary
of the Treasury. wrote MS
letter to the Chamber OF
Commerce of the United states an
nouncing an end to government loans
to Europe the question as TO wna'
America can and should do to heip the
war-prostrate nations get back upon
their feet has been pressing for an
answer. There has been alarm in Eu-
rome and confusion in this country.
For neither is there any warrant.
A high official Of the administra-
zion. who has made a deep study OF
The international financial situation
puts it 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.
Americas 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 hg-
ures, but without it the loaf will be
unleavened. Without the 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 inexorab1e 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 it's 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
cessity of reducing expenditures. o.
he may cut his scale of living to
square with his lowered income and
set to work to build his income ur
again. There isn't any argument as
to the wiser course.
U. s. Now Doing Much.
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 is wholly an
error. America already is doing much
and is prepared to do more-as much
more as is good for Europe. The door
is wide open to sound and wholesome
credit. 1t is closed only to the hasty
and reckless credits imrelled 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 hun
dreds of millions Of dollars are being
extended Europe today. Credits are
available to the extent Of billions
Nor is it 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 basis Of credit
today as it ever was. There is no ma
ton which fought against Germany the
citizens Of which cannot negotiate loans
I 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
eYn0Sifi0n in fart a n
business man has to make when he goes
to his banker to arrange 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
TO furnish gilt-edge security as COL
lateral. The enemy countries, and par
dcularly Germany, have destroyed that
Intangible basis of credit known ordi-
narily as confidence. If Germany is to
get any credit based on confidence, -
she must look to some of the 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
pls country, and in these three ways,
In tE3 Judgment of sound students of
the international situation, can be
arranged1 all the credits it is good
that Europe should have. One is
through THE medium of established
banking ch&nnels A second, through
the sale in \this country of foreign
securities and NJ American securities
etin owned abroad The third. through
the War Finance Corporation.
Ready to Lend. Billion.
To take the last frkt. the War FL
nance Corporation stands ready to
loan a billion dollars to finance Amer
lend a billion dollars to finance Amer
with a revolving fund itsNpossibilities
of assisting are much greater than
the stated sum. huge as it is. As IL
commonly known. the Wary Finance
Corporation was created by the gov
ernment to assist American iRdustr3
IN the production of war neceasities
Following signing Of the armjStice
It was continued in existence bySac
Of Congress to help American export