New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1920-01-04
Debacle Threatened While
Financial America Sleens
Country Unprepared for Crisis in International AZ.
1a'rs That May Develop Swiftly; Federal Reserve
Board, Logical Leader, Fails to Act in Emergency

country up to the impending crisis
wnich Is described by some financial
asuthorities as being quite as serious in
us way as the war itself.
One OF them remarked yesterday that
lnst as we drifted aimlessly through
!nree years OF the war and then went
INTO II unprepared, we are now drift
ing toward an international f,nsnc;al
debacle without doing anything to
avoid it. He expressed the fear that
our course in the financial emergency
VIII run truly parallel to our course in
respect to the war emergency, and that
we will do nothing until we are ac~
tually pulled into the whirlpool. when
we will put forth frantic. wasteful.
misdirected and largely foolish efforts
TO pull ourselves and the rest of the
world out OF the seething waters.
me prevailing view here is that IL
IS useless to expect any Congressional
initiative in meeting the crisis, and
even those who are severest in their
denunciation of our drifting policy
are Of the opinion that the financing
should be private, rather than state.
Nevertheless, at the last. II ia
believed that there must be some
sort of government guaranty behind
any great credit undertaking at this
tlme. II results are to be obtained.
1T is argued that American investors
Will not put their money into any
sort Of paper based on European
debts unless they are assured that in
the last resort they can look to Uncle
Sam for protection.
Reserve Board Should Act
Surprise is expressed that the Fed
eral Reserve Board does not take the
lead in getting the bankars. finan-
clers and business men of the country
together for serious and methodical
elaboration on the situation. The
board has como to be regarded az Ehe
national guardian Of monetary and
financial stability and as the central
adviser, and counsellor in such mat
terc. It is asserted that nothing else
Will awaken the country to the dan
gers CO the hour so much as a dag
nosis Of them by the board, accompa-
MED by the announcement Of plan
for conference or a series of confer
ences to decide upon some definite col
lective action by those who are in au-
thority in the worlds of finance and in
dustry. Members Of the board fore
saw the financial chaos that would fol-
low the war. and have watched appre-
hensively developments in Europe and
here ever since the ar1nistice, and yet,
1T is said in criticism of them, they
have stood by and let the United States
extend its credit imitation since then
by $4,000,000,000 for practically moth
ing, while the whole structure Of world
trade is in danger of collapsing for
need Of credit from the United Staaes.
Cause of Inaction
Tho boards inaction is explained as
partly due to timorousness in starting
something that 1t instinctively feels
will be most unpopular in the present
reaction in the United States against
further extension of foreign entangle-
ments of any sort, and partly due to
the fact that it does not care to take
the leadership in such grave ma
tional and international enterprise
without the sanction of President VIII
son, and it has Of course been impos-
sible to bring the matter to his con-
sideration