The New York herald., 1920-01-04
OPEN MARKETING
Of LOANS URGED
TO HELP EUROPE
Eugene Meyer, Jr., of War Fl
nance Corporation, Analyses
Foreign Credit.
SAYS BANK EXCHANGE
is UNSATISFACTORY
Tells Correspondents to Scheme to
Utilize Security of Industrial
Combinations.


of the War Finance Corporation, in an
address last night to the Association of
Foreign Correspondents, at the Wander
hIlt Hotel advocated the establishment
of an International public market as the
hest means for supplying the war stricken
countries of Euhope with the credits they
must have to build up industries.
Membership in the Association Of For
eign Correspondents includes the Ameri-
can representatives of the principal news
papers in Great Britain, France. italy and
other allied countries. 1t was formed
during the war to aid in war work and
has been continued in times of peace.
DR.. Marcel Knecht of the French Mis-
sion, was reelected president of the as
sociation.
Among the speakers. besides Mr.. Meyer,
were Dr. Nicholas Murray Butler. Maurice
Casenave, DR.. John III. Finley, James w.
Gerald and p. Whitwell Wilson. The
guests included Maurice Maeterlinck and
Nine. Clemenceau-Jacquema daughter
Of the Premier.
Mr.. Meyer pictured the difficulties in
international trade that are bound to
arise when the United States ceases to
make loans direct to the European coun-
tries. He said that much valuable time
has been lost in attempting to find a
solution to the problem. The method he
suggested, he said, was the result of q
careful analysis of the situation.
Three Forms of Credit.
"Assumings.- Meyer. "as
seems clear fro mthe annual report OF the
Secretary of the Treasury that credit from
the United States Government is no longer
desirable or obtainable. except in cases of
pure relief. there are three forms Of credit
left from America - credit from banks,
credits from industrial sources and credits
obtainable from the investment market or
the country"
Tho first two forms, said Mr.. Meyer.
have been used to a considerable extent,
but will not solve the question because
they are necessarily short time loans.
What is needed i'm the present situation.
he declared, is loan that will before its
maturity give the countries Of Europe a
sufficient time to recoup their losses. Such
a loan, he said, can be obtained only
through the investment market in this
country
On this subject. Mr.. Meyer said, in
part
american investors are accustomed to
certificates that are engraved and that
are certified by responsible transfer agents
and registrars for purposes of protection.
and there is no reason why they should
not get this protection by American
bankers and trust companies issuing local
certificates which represent the deposit OF
foreign certificates.
ANY dealer in international securities
should be able to buy these foreign secu-
rites in the open markets of Europe and
ut moderate charge to have his Euro
pean certificate exchanged for the Amer
lean certificate which would be good for
delivery In our markets. The results
would be % furnishing through an in
vestment market large aggregate amounts
of funds for financing our trade with Eu-
ropean countries through the American
investment market; (2) material broaden
ing and consequent sterilization of the
exchange market. which would enable
business men to make calculations based
on very much less erratic fluctuations IN
exchange quotations; 90 helping the Eu-
ropean markets for their internal loans
because the European investors would
have the advantage of an international
market, rather than merely national
market for their own issues; 90 making
the internal loans OF foreign countries
available as collateral for securing shorter
or longer accommodation from various
sources in America, including the War
,-,--nce Corporation.
Must Reverse Processes.
There Is nothing original in this idea
However, it will be new for this country
10 have public markets for foreign securi-
ties in foreign currency terms. Our posi-
ton having changed from that of n debtor
nation to that OF a creditor nation, our
banking machinery and our security
markets must reverse the processes and
tho machinery designed to facilitate bust
ness when we were borrowers of capital
instead of lenders, as at present. We
must build UP "A new financial structure
for our altered commercial relations. and
the establishment of an international pub
lilo market for International securities is. In
my opinion the most normal, the quickest
s-.id the most important single thing that
can be dono now.
IL have emphasized the advantage -
opening our markets to the internal Old
cations of foreign governments, but with
proper exemption from foreign taxation
and other safeguards to American holders
the prime municipal and industrial securi-
des OF the borrowing countries would
quickly and logically follow.
Coming now TO the European countries,
the buying and the borrowing countries,
le, us consider for a moment what they
can do to cooperate with us and what
obligations they may give.
Loans 20 Re Well Guaranteed.
The foreign governments or municipal
tiles may be tho borrowers. the bankers
Of Europe may be tho borrowers for the
shorter periods and commercial and in
dustrial organizations may borrow for
shorter or longer periods, or combina-
tions of any OF these may act together.
BY this ] mean. for example, that indus
tries may create combined obligations so
strong as to be satisfactory to tho Ameri-
.tcentsocd ON rage rive, ccL rhree.)