The New York herald., 1920-01-14
SHARE IN LEAGUE LOAN WILL
SUSTAIN AMERIC A'S PROSPERITY,
SIR GEORGE PAISH CONTENDS
Reduces His Estimate of Needed Fotaon to Twenty Billions
Otto H. Kahn Assails Big Taxes on Large Incomes
Europe Must Work, Says Mr.. Houston

before the Council on Foreign Relations
in the Hotel Astor, explained in detail
his scheme for the economic rehabilita-
ton Of Europe.
Sir Georges original estimate of Sc. .00O.-
10000 as the amount required to accom-
plish this result was scaled down to So,
too,oc0,o00. lent over period Of five to
ten years. AS has been previously stated
his method of obtaining 1t would be to
have the League Of Nations issue tax
exempt bonds which would be guaranteed
by every member of the league mas
much as Sir George admits that the
United States is the only member Of the
league not in financial straights, his plan
10 in effect a scheme to have the United
states underwrite the bond issues OF the
league.
Noted financiers occupied the platform
with Sir George. Otto Ii. Kahn spoke
on Faulty Taxation" Senator Walter e.
Edge. of New Jersey. told of the Edge
b.u. recently passed through Congress,
and A. c. Pearson, of the Dry Goods
Economist, told of what he had observed
during recent trip in Europe. Other
speakers were Frank A. Vanderlip More
ton Frewen and Herbert S. Houston. The
general subject was "rhe Financing of
Our Foreign Trade" Paul D. Cravath
presided.
Fears International Disaster.
Sir George Paish, who said that he spoke
without official capacity, predicted that
unless the international credit situation
was soon adjusted disaster would face
not only Europe but the producers in
Afanr ralI 70 cotl hat 10 tv,
ternational exchange market goes to
pieces-and there Is danger that 1t will
then America will not be able to export
It's surplus products Such condition.
he said, would result In tremendous
losses to American producers.
In offering his remedies Sir George
said:
The situation demands:-That Amer
lea sell her products for securities Of
unquestioned value, so that the Anleri-
can people may be sure that they will
on the maturity of the securities re-
ceive prompt payment:
That the power to issue such securi-
ties shall be equal to the needs of the
world in general, including the United
States and Of Europe in particular;
That the funds provided shall not
be used for ordinary governmental
purposes as they were used during the
war. but shall be exclusively devoted
to the work of restoring Europe's pro-
ductive power and will thus enable Eu-
rope to pay her way at the earliest
moment possible.
The organization capable OF carry
ing out this work is. in my judgment,
the new League of Nations. whose
birth was provided for in the treaty Of Z
peace.
THE Supreme Economic Council should
now be made an essential part of the
League of Nations and be intrusted with
.s.-..~ - 49,
various nations of the world unable to
pay in goods for the produce they require
10 import and of arranging credit on such
q basis that credits granted to these ma
tions shall he fully and adequately Sc
cured. Tho Reparation Committee set up
under the treaty Of peace should also be
Inade a committee of the League Of Ma
tions and intrustcd with the task Of
ultimately employing all the credit
granted TO Europe for the purpose OF re-
constructing the devastated districts.
Credit Needs DwiudIing.
How much credit will he needed for
this purpose cannot now be determined.
II Europe were to purchase as much
product from the United States in 1920 as
she did In 1919 and were unable to expand
her sale of goods to the American people
rlie amount of securities which America
alone would require in payment for her
surplus would be 81, 800 100000 i'm the COM
ing year. y very considerable expansion
in Americas imports from Europe. how
ever, may be looked for. and America s.
surplus for 1920 to be settled in securities
ehould be much smaller than in the last
year
But ii is unlikely that Europe will be
able TO create in a single year an
equilibrium between what she needs to
buy and what she is able to sell, and any
comprehensive plan that is devised to take
care Of the situation must provide for the
continuance for several years Of America s
sbility to sell much larger quantity of
her products than she is able or willing
TO buy from other nations. Consequent
Is the amount Of credit facilities to be
nrrdngcd for must allow for the con-
linuance OF an American surplus of ex-
ports over imports for several years, and
must also allow for the continuance Of n
surplus OF exports over imports by the
other countries of the world which supply
europe with food and raw material.
IF one takes the needs Of Europe as a
whole, her present need to purchase food
and raw material In order to maintain
life and to restore her Industries and her
subsequent need to purchase large part
Of the material required for the rcpara-
lion of the devastated districts, IL is clear
that n total sum OF $40, 600. 900 is not an
excessive estimate, especially when spread
over five or even ten years. Such mn es-
innate merely means that America will
continue to nave power 10 sell HeT surplus
productions Of food, raw materials and
manufactured goods for number of
years without needing to buy corre-
aponding amount of goods from Europe
in exchange.
''Experience will probably show that
rom the level of 81, 500. 100000 of America s
surplus exports in 1919 the amount will
probably decline year by year until Amer
ica is gain purchasing from Europe goods
and services to the extent needed fully to
cover Europe's purchases from America.
League Bonds safe Everywhere.
THE security which would undoubtedly
find the greatest favor in the United
states as well as in other countries would
30 n bond free of all taxes both In the
United States and in all other countries,
and therefore Of great value for the pur-
pose OF international payment. At what
rate OF interest such bonds would have
10 be issued can be gained only by expert
once. but II is evident that a League OF
Nations bond. interest and principal OF
which was guaranteed by every member
of the league, would be the finest security
hat could be issued. Its issue would as
sure to American producers prompt pay
,ncnt of their accounts At the present
moment the chief security for the Ameri-
- l.. AsIN INs " n