The Washington herald., 1921-03-07
Concerning Industry Out
look, Says Crossroads
y Are Reached.
WISDOM NECESSARY
Should Quickly Recover From
Stagnation If Broad Views
Are Exercised.

Bank. one of the leading institu-
tions Of. Great Britain. Frederick
c. Goodenough,. chairman Of the
bank. made extended comments
upon the worlds business situation
and in particular on the situation
as II affects Great Britain. The fol-
lowing extracts from his address
have some bearing on our own re-
lation to the international situa-
tion.
Il feel strongly that we are now
at the crossroads so far as the
outlook for industry Is concerned,
and that upon our choice of meth
DDS depends whether we return to
prosperity via a protracted or via
a short period Of distress and un-
employment
The world is passing through a
period of resettlement, and IL we
take a broad view OF the situation,
especially as regards assistance to
countries and the various
complexities surrounding indemnity
payments and allied Indebtedness.
see no reason why We should not
quickly recover from the present
stagnation- But IL our outlook is
to be narrow, not only will trade
revival be delayed. but our future
will be prejudiced. We cannot af-
ford. to ignore the interdependenc
of nations more important factor
now than during the period which
followed the Napoleonic wars-and
our aim should be the creation Of
what would really be a Financial
League of Nations, composed OF all
the countries able to help The mat
ter Is urgent, and the world cannot
afford delay: our part Is to show
no hesitation in our readiness to
take up our share of the burden.
Get at Root of Trouble.
Unless we can get to the root of
the causes which at the present
time are shutting down, partially,
or wholly, the markets which in
prewaF times took from us many
millions of our output. and again
restore them to normal conditions,
1t would seem that a recovery in
the Industrial position must be
Very slow indeed. Until the dis
tressed countries of Europe are
atarted upon q fresh financial basis
which is fundamentally sound,
their markets will continue to re-
main wholly or partially closed
with their unsound currencies they
can neither pay nor obtain credit.
and the credit schemes which have
been proposed are merely palliatives
TO the present situation. They will
act only very slowly, and. so far as
we can see. they will not provide q
remedy as quickly as the disease of
unsound currency will drive those
countries into bankruptcy.
Private Remedies Difficult.
cit has been thought by some that
any remedial measures had better
be left to private enterprise, but
that Is open to this difficulty. that
in many instances the risks in
volved are neither banking, nor in
suranee. nor trading risks. but they
are political risks over which pri-
vate enterprise can exercise no sort
of control For this reason credit
cannot be forthcoming from private
sources to an extent which will be
adequate to what is required, and.
although a great volume OF credit
has already been granted to Europe
since the armistice. so little progress
lhas been achieved that 1t would
seem that organized international
Action is needed before any satis-
factory results can be secured.
AT the root of the troubles of the
distressed countries Is the inability
TO meet expenditure out Of revenue
and the consequent necessity OF
making up the deficiency by the
help of an unsound system OF cur
rency which enables paper, without
a specific backing or ratio OF value.
to be created for the purpose OF NIL
ing up the gap; IL this process Is to
be arrested before bankruptcy su-
Deryenes international assistance IS
reouired-at all events for the
smaller coutries-to enable them to
tide over the interval of time until
they can reorganize their internal
position by the adjustment OF reve-
nue. and expenditure and by trade.
Must There be General Bankruptcy
There seems to be no other way
short Of q general reconstruction
after bankruptcy; this would in
yolye enormous loss Of capital, fol-
lowed by q long. painful and dan
eerous process of recovery. all ol
which would add to the difhculties
of trade and increase the present
unemployment.
sTf international securities were
created to nll this gap some form
Of international control would be
necessary in order that sound A.
nancial and economic principles
might be insisted upon The carry
ing out of such a scheme would
probably involve some imitation of
credit in this and other countries.
such imitation should, however, re-