New Britain herald., 1920-01-23
GOVERNOR HARDING
 URGES ECONOMY
Tells Pan-AmeriCanS We Live in
 Fools Paradise"

Washington, Jan. 23.-American capital will be employed in aiding Europe ito get back to productive work not because of 'attracfivc rates of interest," but to restore nor nal conditions and to open markets for American export, Governor w. r G. Harding of the federal reserve board, said today, speaking before the second Pan-American financial congress.
 We cannot, however, export things which do not have" Governor Harding said, "and in order to pro- vide exportable surplus we must produce more or, failing in that con- sume less.
 During the last year we have wit messed an unprecedented era of eX- travagance in this country: there has been continuous rise in prices, and while the value of our products eN- pressed in dollars has been greater than ever before in history the physi- cal volume of goods produced was less than the production of any year since 1916. Our domestic demand has been competing with export de- mands, and the result has been that prices have been bid up on both the foreign and domestic consumers.
 Fools Paradise.
 Our people must be aroused to the consciousness that after all we may be living since the close of the war in fools paradise and that more work, economy and liberal investment in foreign securities are necessary if we wish to make our present appar- ent prosperity real and permanent. It is important that the world should get back to work and in order to provide steady employment for the people of our own country even it is necessary that there should be a sustained demand for products. and, in order to maintain this steady de- mand it is necessary to supply mar kets abroad for our surplus produc- tion.''
 To enable Europe to produce things necessary for it's own support. Gov ernor Harding said, American raw materials and equipment must be exported and the exchange for Flu ropean products facilitated. Ameri- can bankers were studying the situa- ton from q new angle towards world finance, he said, and undertaking en- agreements they would not have em- parked on a. few years ago. American manufacturers, were extending long credits, he added, but could not do so indefinitely with undue pressure the credit with American banks, and to insure this send along credit to European buyers appeal must be made to American investors
 Mentions Edge Act.
 V Governor Harding called attention to the new Edge Act providing ma chinery for financing these under talSings, which he said, gave export CTS. producers, manufacturers and American investors the means of CO., operation to solve the problem be- fore them.
 "The basis of world commerce is an exchange of goods Governor Harding said. pointing out that Amer jean loans must be on terms to per init the borrowers to repay in pro- ducts.
 "FIuropean nationals can produce many things which we either do not produce at all or cannot produce as cheaply as they can," he continued. for it may be they can produce things needed in South American countries or in the Far East. As American inn porters have constant dealings with South American and Oriental coun- tries it follows that European credits available in China and Japan, Argen- tine, Chile, HraZll ana other IGitln- American nations will be just as ef- feetive in liquidating European obli- cations in the United States as d- rect European credits in New York would be-
 The speaker pointed out that the United States in five years had passed from a borrower nation with S5.0OO.- 100000 in outstanding debts to creditor with $14 1000, 100000 on it's books and the national debt had risen from 100000 to s25,oO0,- 00O, ,000 Exchange rates abroad were far below normal, he added, and in assuming it's new role, the United States faced problems which were unknown to the old creditor nations of ante-bellum days"