The Washington herald., 1920-02-01
EUROPEAN CREDITS

IL is in the interest of our future
prosperity that we need to maintain
our export market. Depression. due
to shrunken exports. would reduce
the purchasing power of vast num-
bers of persons, and in the end, In
the absence OF foreign demand, our
present great domestic demand
would also cease to be in evidence.
The matter of foreign loans Is not
a simple one to determines: that Is
why a clear vision and wide under
standing of the situation confront
ing US must be had. Credit. mobil-
ized for war. accomplished wonders
beyond the most optimistic expec-
tations. Mobilized for peace. IL will
have to be carefts'y handled IL It
it is to accomplish further won-
iders. Our banking position is not
as comfortable as 1t was at the out
break OF the war. nor is our supply
of liquid capital excessive. Foreign
financing. except that which Is to
save the lives of destitute people.
must come into competition with de-
mestic financing, and our manufac-
turing Industries. railroads and pub
lie utilities are expected to call for
many millions of dollars in the
period Immediately before us.
In competition for American
funds. then, Europe must expect to
bid for what it requires. offer an
attractive yield. and provide proper
safeguards for the principal in
volved. 1t must expect the closest
investigation as to the use of bor-
rowed funds and as to the ability
and intention of borrowers to meet
their obligations. If they are to be
successful. loans will first OF all
have to be on a sound business
principle. Bankers, manufacturers
and merchants recognize this, and
are ready to proceed with plans to
help the situation. But all the plans
in the world will fail of success IL
called upon to meet a public indif-
ference that is brought about by a
division of counsel and purpose. and
II caed upon to overcome inaction
and lack of sympathy on the part of
the government.
What so many opponents of large
scale foreign financing seem to ig-
more is that what is being advocated
in the way of loans is simply a tenn
porary, and not a permanent. policy.
Help to Europe is advocated to meet
an emergency, and to take advan-
tage of an opportunity. by supply
ing Europe's pressing needs until
it has restocked and gone back into
production itself.
1t is unfortunate. in this connec-
tion. that exaggerated and ill-ad-
vised statements have lately been
made about the need OF extending
credit abroad. and that fantastic es-
Inmates regarding the required
amounts have been named. These
have called forth sharp criticism
from competent authorities and the
criticism. laying stress on the neces-
sary limits attending foreign loans.
has been interpreted by many per-
sons as opposition to them alto
gether. Indeed. on the strength OF
the criticism that has been made,
without correctly judging the gov
erninE circumstances, a number OF
people have gone to such an ex-
treme as to give il as their opinion
not only that We ought not to eX-
tend further loans to Europe. but
that we ought not to export freely
any longer. on the ground that fur
ther loans will cause imitation and
may not be paid back. and that do
mestic trade is great enough to take
care of all that we can profitably
produce for a long time. Statements
of this character are harmful in
that they do not reflect the true
situation.