Evening star., 1921-06-11
FEDERAL APPROVAL
| TO FOREIGN LOANS
Cooperation of Govern.
ment and Bankers to Req.
u|ate Money Flow.
BY DAVID LAWRENCE.

President Harding feels that the
administration has passed the first
milestone in the journeys of under
standing and good feeling to be
travelled by the government and pri-
vate business. The President an
nounced that the government here
had received satisfactory assurances
from every group Of international
bankers to the effect that the latter
would gladly cooperate with the
ing enferprisss for foreign peepies.
This is really a new departure for
our government in peace-time, though
European governments have always
worked in close and intimate reia-
business. From April. 1911. the
United States government did all the
lending Of money to foreign govern
ments and peoples. Prior to that
q me. while America was neutral, the
zig banking Institutions of this coun-
try lent large sums to Great Britain
and France. and though the. German
sympathizers did all in their power
to prevent the floating of such loans.
United States government. neverthe-
less, didn't interfere in the slightest,
giving neither encouragement nor
support to the loans.
PoliticaleAspectD DisaPpeafs.
Now. however. the Harding adminis-
tration has decided to become an ac-
tive participant. in the situation for
entirely different reasons. The politi-
appeared. and at present it is entirely
a question of world economics and
particularly a matter of domestic pro-
lection agains' the uninterrupted now
Of American capital to, foreign coun-
tries at attractive rates of interest.
Mr.. Harding and the cabinet have
no legal power to interfere with the
floating of any loan IN peace times.
But the exercise Of moral influence
by the government can be made an
tion were to issue a public statement
letting the American people know
that a certain f0an was not to the
best interests of our domestic busi-
deavoring to float such a loan would
run up against an Indifferent lot of
people and the loan would be doomed.
So it is just as much to the inter-
est of the bankers as the government
that there should be cooperation: No
which the government disapproves.
1t was made quite clear at the White
House that this doesn't mean the be-
ginning of a government guarantee
that, the government regards every
proposition offered by the interna-
tional bankers as a good investment,
The public will have to judge for it.
self the merits of each loan But
it does mean that every loan issued
approval Of the government in the
sense that the Harding administration
will have been given the Opportunity
to express an objection and thus kill
the loan II 1t deems the project
against the interest of the people as
a whole.
In, this way the government will
keep track OF all loans or enterprises
which may in any way take funds out
of the United States. The Harding
administration feels that foreign gov
ernments borrowing money here
ought to agree that the sums received
shall be used indirectly to pay of pri-
vate obligations to America or to
finance American export trade.
In other words. as President Hard
other day. no single measure of relief
Is contemplated by the government in
guiding the country back to normalcy.
but the whole situation. national and
international. is being surveyed. and
no phase Of it, like International bank
ing. is being permitted to encroach
on any other phase. Thus, the govern
ment hopes to bring about an era of
understanding all around for the ulti.
mate betterment Of business condi.
tions.
Meanwhile more conferences ara to
be held with western bankers to get
the viewpoint of other. sections Of the
besides the east. The Treas
ury and Federal Reserve Board have
representatives out west now who are
the financial situation
and making list Of bankers and busi-
ness men who should be invited to the
meetings.
The prospect rs that during the sum.
nier months the Harding administra-
ton. will be taking a good deal of
counsel, and the only discouraging
factor in. the whole. situation is the
fact that Congress has not yet gotten
down to brass tacks either on the tar
III. or taxation, It isn't that Congress
is loafing.. for the same congressional
speed Is being maintained as usual,
but the two subjects-tariff and tax
are much, too big to be dis
posed Of by July 1st," as 90 many OPP
republicans promised in cam
paign days. Nobody will begrudge, the |
time used. however. II the results are
krn~.-a~xt 1oos