Evening star., 1920-02-15
PLENTY OF u. S. CASH
FOR NEEDS OF EUROPE
All the Credit Available That It Is Good
War-Stricken Nations Should Have.
No Cause for Alarm.

cess Of $1,000. 100000 in loans out
standing at one time.
Its methods of operation are SIM
pie and effective. The exporter con-
tracts with a foreign buyer for
bill of goods. with credit based upon
such security as prudent business
practices demand. If it is for ma
terials to rebuild a ruined railway or
factory. or even for materials to be
fabricated into goods, the buyer re-
Quires a longer credit than the ex-
porter can afford to extend. So he
goes to the War Finance Corporate Il
and discounts the loan. The corpora
t1on has adopted and is succeeding
with the policy Of persuading ex-
porters to arrange part of their dis
count requirements, with banks so
that for every dollar of credit the
corporation extends one or more
dollars is extended from banking
sources. With a billion dollars to
work with that means a pretty sub
stanttal line of credit and effectively
disposes of the supposition that this
government has withdrawn financial
support from suffering Europe.
Poland One Beneficiary.
The War Finance Corporation began
to make export loans only since the
first Of the year. Already it has put
out loans to, the extent of .s27. 900. 900.
and negotiations are about completed
for an equal amount. One of the
transactions completed involved the
sale of locomotives to Poland, calling
necessarily for longtime credit.
BUT the exporter already has his
money and now is in Europe nego-
tiating other deals. It is improbable
that this loan win be repaid within
the year after peace is proclaimed, so
that that money has done all the
work it is likely to do But loans
based on raw, materials for manufac-
ture will be for. shorter terms. and
the money may be used two or three
times to help Europe and swell the
volume of American export trade.
American bankers are not only TAX
ing over export loans in connection
with the War Finance Corporation,
but they are handling a, stin greater
volume sof business without such as
sistance. And the prospects are that
this will be an increasing rather than
a diminishing volume Exporters are
going TO their bankers by preference
because the law requires that the in
terest rate charged by the Finance
Corporation shall be 1 per cent higher
than the current rate for commercial
discount.
Absorbing Foreign Securities.
: Notwithstanding that there re-
mains undigested; 4 huge 8voluIne OF
the var securitiess of this govern
ment, foreign governmental and In
dustrial securities are findings q steady
and increasing market in the United
States, the proceeds Of which go to
help finance fEurope's need for Amer
lean goods. And though Europe was
supposed to have been well drained of
American securities during the war,
evidently there still are large hold
ings of them there, for they are being
sold every day. on the New York and
other markets. A notable feature of
the quotations lately has been the
number Of sales made of fofeign-is-
sued and foreign-owned securities.
with the seller given thirty days in
which to make delivery. This means
that at the time Of the sale the Sc
curities were not even in this coun-
try.
So 1T would not seem that there is
any danger that Europe will be un-
able to finance her real needs from
America The danger that has. been
averted apparently. was that Europe
would be overfnanced. 1t probably
will be difficult for Europe to believe
that such danger ever existed. but
it is the duty Of America to take a
practical as well as a sympathetic
view Of the distress abroad. Europe.
still writhing in her misery and be-
numbed by her hurt, is not in condi-
tion to judge best Of her ewn neces-
stiles.
Cannot Escape Wars Pen. ties.
A policy which Europe today looks
upon as cold -blooded and resents as
selfish will in time come to be rec
ognized as q benefaction. 1t is no
kindness to a friend to load him up
with unnecessary debt. regardless of
how badly he may think he wants the
loan. The penalties of the war must
,r<1 Dnr