The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1920-02-06
European Nations Cannot
Redeem Economic Future;
TreatyMakersAre Blamed
Foreign Exchange Situation But Indication That Financial
Ruin Is Imminent-Bankers of u S. Unable to
Handle Long Credits and Home Business,
Declares Frank VANDERBILT

New York. Feb 6.-Frank A. Van
derlip, who first called attention to
EuropeS serious economic decline
nine months ago. declared in a state
ment to the United Press today that
the foreign exchange situation can be
righted and Europe can be put on her
feet only Il the Europeans will go back
to work.
But Europe can only do this, he
said. if America will supply her with
food and raw materials. The former
head OF the famous National City bank
of New York added that America can
easily undertake the work of reha bill
tation. The first step. he said, was the
most important, tho it need not be a
large one.
"A billion dollars will go a very long
way" Mr.. Vanderlip stated. in start
ing Europe on the way to produc-
spent for food and raw materials 1t
must not be a billion dollars spent on
any financial rehabilitation
Crisis Now imminent
This is the first move necessary to
help the exchange rates recover. The
present decline in exchange tends to
halt our exports. 1t is conceivable the
halt might occur very sharply. To a
considerable extent, ships are now
going to Europe without full cargoes.
Last year We exported eight billion
dollars worth of goods, and the trade
balance in our favor was four billions.
In pre-war days. a trade balance of
$500, 900. GOO for US was about the top
figure. These figures indicate that IL
the falling off of our exports goes far
enough it will result in a Jar that will
pile UP cotton, agricultural products.
and to some extent manufactured
goods. do not believe such situa-
ton would result in any serious I'M
employment for us.
There might be some thrown out of
work while a process of readjustment
went on but very little hardship would
follow. Our consuming capacity is
greatly in excess Of our present con-
sumption.
Predicts Kick Back for L. S.
1T Is rather psychologically that we
should feel continuation of the pres
ent decline in exchange. The situation
now facing US means the people on
the other side are unable to pay for
what they vitality need and that their
economic life has become disorganized.
Economic DISCRIMINATION in Europe
must have an unfavorabIe influence
| to our own affairs If over there po-
liticaI disorders occurred. they would
affect our thoughts here. Just as we
! have a considerable public opinion
sympathetic to Russia, so might there
be a body sympathetic to any political
disorders in Europe. An increase in
I radical thought in America would be
eng6ndereG Dy radical pOltlcaI move
ments in Europe. The present situa-
ton is creating idleness and hunger
among the Europeans and those are
the two principal factors in developing
+ political unrest.
Banks Have Gone Limit.
! There is no cure you can take out
I of a patent medicine bottle. The cure
is for Europe to produce more. so
that Europe can pay for what it must
! import. But 1t is hardly to the point
! to insist that Europe must go to work
and stop at that Certainly Europe
! must work. but it must have some
/ thing to work on and raw materials to
work with, and in the meantime it must
! have food to support the people. Just
/ now the people of Austria and other
central European countries are ex-
\ hausted and dying of starvation
| Il doubt the wisdom of our govern
kment granting more credits to Europe.
! At the same time the credits that are
needed must run for too long a term
( to make it feasible for banks to make
the grants Besides. our banks have
expanded their credit facilities for do
mestic requirements to quite as high
! a point as is safe. That means the
credit should come from our invest
ment funds. which have been largely
dissipated in the recent past by oul