The Bridgeport times and evening farmer., 1920-04-27
UNITED STATES c. OF 0. OPPOSES
 SOLDIERS BONUS
(continued From Page one.)

only py the freeing or large caplCaI can any appreciable progress toward meeting Europe's needs be made.
 ''The small investor" says the re- ports ftis not saving money. He has been influenced by the tendencies to- ward extravaganza which have swept over the entire civilized world since the arn-fstice, Closely related to this is the almost universal speculative tendency of the time, which is an insuperable obstacle to the substan-
 ual sale of investment securities among small investors. It is a na- tional misfortune that the Aneri- can people are not producing more
 and saving more, so to be in a po-
 Sition to be of greater aid to Eu-
 rope in her hour of need. But the
 fact is that they are not saving in proportion to the present scale of in come. And even if substantial thrift were being jpracticed among inves- tors of small means, the resulting
 funds would not be large enough to meet the present situation without the support of the large investor, who has been substantially legislated out of the investment market as such. ''The large investor is largely un- available because of the present sit 1 uation with respect to taxation. Un- der existing rates of federal income | tax a return of five percent without l tax deductions (which can be obtain ed from fully exempt state and muni- cipal securities of prime character) is more attractive than domestic or for eign investment subject to tax" Discussing the need for a fixed governmental policy of sanction and conservation the reports said there
 was no thought of suggesting that the government alter it's policy of not increasing the $1O.000, 100000 it al- ready has advanced to European countries.
 Tt would appear, however" says the report, "that the present situa-
 tion involves more than purely busi-
 ness considerations and that it's | numerous political and social ramifi- cations are of deep significance to | our own people and to the whole world In a matter of such tremen- 1 dous scope it does not appear to us 1 sound policy to proceed on an ex- l tensive scale until definite govern mental sanction and cooperation $ assured.
 'The American public, observing the disturbed conditions of Europe and the many political considerations involved in a comprehensive plan of extending credits there. will not be inclined to venture their funds in such investments unless they know that the undertaking is favorably re- garded by the government and is be- ing carried through with it's approval and cooperation.
 without in any way entering into the political aspects of the treaty of
 peace or the League of Nations, it is
 rP ho
 ditions influencing American senti-
 ment in Europe to point out that the continued existence of a state of war has not tended to improve that conf
 dence in conditions overseas which must always be the basis for forming credit judgments
 "To many thoughtful bankers and business men in America it seems impossible to expect action upon any extensive scale along lines of forefgn investment until reasonable grounds for b11si mess confidence in European conditions are restored, and that such grounds cannot exist until this coun- i try comes to some definite political understanding with the nations of Europe with whom our own economic i interests are inextricably linked
 "A most immediate and important l problem for this country" the report continues, ''is how to extend further ! credit to foreign nations without 1 bringing about added imitation at l home. It is generally conceded that l further imitation of our credit struc- l ture must be checked if commodity l prices are to decline or even to re- i main stationary. Advancing com | modity prices would more than off, 1 set any gain to European purchasers | 'What is really needed is that any
 foreign credits to be granted here l after be based upon additions to our
 own capital as distinguished from l additions to our own credit Struc- ] ture.
 ''In the United States it is quite i clear that at least two things must happen to improve our domestic sit 1 nation before we can safely grant I further large credits abroad. (a)
 The first is diminished home con-
 sumption and the saving resulting therefrom, and if possible increased be a revision of our system of fn- come taxation.
 '"The matter of foreign investment
 has been referred to as not a matter
 of sentiment but of arithmetic. It is inevitable that the United States, as a, great unit in the worlds economic
 affairs, should participate largely in foreign trade and in foreign fnanc-
 ing.
 :. '@But from the standpoint of Europe the worst possible result at this time
 would be to hold out hopes of assist
 ance which cannot be realized From
 the standpoint of America the worst result conceivable at this time woH4d he to attempt to set in operation ma
 chinery for the extension of foreign
 credits which would not in fact op-
 crate Our public confidence in Eu
 nope would not be enhanced by the offering of securities based upon for
 eign transactions which were not ab soluteIy secure Public education il foreign investments, a, vital economi'
 necessity to the America of the pres
 ent and of the future, can only conn
 through the most sound and carefu
 handling of a great and intricat
 problem along lines of business states
 manstip and vision, over a long pc
 riod of years Whatever e11ergenc.