Every evening, Wilmington daily commercial., 1920-04-27
SOLDIERS BONUS
Continued from page
BASEMENT ron CAPITAL URGED.

"But the fact is that they are not saving
in proportion tn the present scale of IN
como. And even II substantial thrift
wore being practiced among investors of
small means, the resulting funds would not
be large enough 70 meet the present situa-
ton without the support Of the large
investor, who has been substantially
lcgislated out of the investment market
as such
"The large investor is largely unavail-
able because of the present situation with
respect To taxation. Under existing rates
of federal income tax, a return of five
Der cent without tax deductions (which
can be obtained from fully exempt state
and municipal securities Of prime charac-
teri is more attractive than domestic or
foreign investment subject 90 tax.
LOANS TO FoagIGs COUNTRIES.
Discussing the need for a fixed govern
mental policy OF sanction and co-opera-
tion, tho report said there was no thought
Of suggesting that the government alter
it's policy Of not increasing the. SlO,po,-
100000 II already has advanced 20 Euro
pean countries.
1T would appear, however" says the
report, that present situation involves
more than purely business considera-
and social raniications arc OF deep sig
nficanee 20 our own people and 20 the
whole world. In a matter Of such tre-
mendous scope il does not appear TO us
sound policy 10 proceed on an extensive
scale until definite governmental sane
ton and corporation is assured.
"The American public, observing tho
disturbed conditions Of Europe and tho
many political considerations involved IN
n comprehensive pnn Of extending credits
there, will not be inclined 10 venture their
funds in such investments unless they
know that the undertaking is favorably
regarded by the government and is being
carried through with its approval and CO
operation.
TOUCH LIGHTLY on ThBATY.
"Without in any way entering into the
political aspects Of the treaty of peace or
the League Of Nations. IL is necessary in
discussion Of the conditions influencing
American Investment in Europe to
point out that the continued existence of q
state Of war has not tended 10 improve
that confidence in conditions overseas
which must always be tho basis for form
ing credit judgments
ITO many thoughtful bankers and bust
ness men IN America II seems Impossible
90 expect action upon any extensive scale
along lines of foreign Investment until
reasonable grounds for business confidence
in European conditions are restored, and
that such grounds cannot exist until this
country comes to some definite political
understanding with the nations of Europe
with whom our own economic interests
are inextricably linked.
FURTHER INITIATION DANGER.
"a most immediate and important
problem for this country" the report con
tinues. ''is how to extend further credit 70
foreign nations without bringing about
added imitation M home II IL generally
conceded that further imitation Of our
credit structure most be checked if COM
modify prices ars 20 detain or even re-
main stationary. Advancing commodity
prices would more than offset any gain 70
European purchasers through better ex-
change rates
What is really needed is that any
foreign credits to be granted hereafter re
based upon additions 70 our own capital
az distinguished from additions 20 our own
credit structure.
NEED or SAVING EMpHAslZED.
'In the United States it is quite clear
that at least two things must happen to
improve our domestic situation before we
can safely grant further large credits
abroad. (A) The first is diminished home
consumption and the saving resulting
therefrom, and il possible increased pro-
dlIction. (Bl Second, there must be a
revision of our system Of income taxa
/ ton.
The matter of foreign investment has
been referred to as not matter OF sentl-
ment but Of arithmetic. II IS inevitable
that the United States, as a great unit IN
the worlds economic affairs, should par
ticipate largely in foreign trade and IN
foreign financing.
MAKE NO FALSE GESTURES.
"But from the standpoint of Europe
the worst possible result at this time
would be 10 hold out hopes OF assistance
which cannot be realized. From the stand
point of America the worst result con-
ceivable at this time would be to attempt
to set in operation machinery Tor the ex-
tension of foreign credits which would not
in fact operate. Our public confidence II
Europe would not be enhanced by the Of
+ fering of securities based upon foreign
/ transactions which were not absolutely
secure. Public education in foreign
/ investments, a vital economic necessity
! TO the America of the present and of the
/ future, can only come through the mOst
careful handling of great and intricate
! problem along lines OK business states
/ manship and vision, over long period oi
/ wears Whatever emergency steps may
/ be taken, there is no royal road 10 th,
/ permanent result desired.