Evening star., 1921-08-21

way" he writes. that any one can see for Eu-
rope to cancel It's Indebtedness to this country
except by selling its securities to US. Any at
tempt to have Europe pay us by means of goods
is probably impossible for the present. and II
1t could be done. would very likely spell disas-
ter for many Of our industries"
y * + X
DR.. Jeremiah w. jerks. research professor
of government and public administration at the
University of New York and recognized
Of the countrys foremost economists. has
worked out the idea of investments abroad be-
yond the mere purchase by American investors
Of European securities He writes as follows:
"The difficulties of the situation which you
outline are. of course, patent to every business
man. 1t has seemed to me for long time
that the greatest single service that could be
rendered by American business interests toward
relieving the difficulty would be for Americans
to invest their capital in large sums directly
in the foreign countries buying entire plants.
or at any rate the control of those plants. and
operating them. The profits of those plants
would then be invested presumably in the coun-
tries themselves for time. Our exports that
would help build up those industries would not
require for the time being the shipping Of for
eign-made goods back to this country to pay
for them. This procedure would help solve the
balance-of-trade' question better perhaps. than
any other method that be devised. OF
course, the prosperity of those countries them
selves would be increased thereby. Wages
would be raised, demand for the products of
other contributing industries there would be
stimulated, and the countries would be brought
back to normal more readily than by any other
single process Especially would this be true
In the case of countries that are not well de-
veloped industrially, and that would gain par
ticularly by the adoption of the American in
dustrial methods and skilled Management. 1t
he Nod ~ tha$ Il, @t,n xfv,n
the citizens of those countries thus aided would
be able to buy back these industries when the
proper opportunity came
"It will be noted that this is exactly the
process by which many Of our railroads and a
very considerable portion of our industries in
the middle west were developed. Some Of
railroads controlled by European
capital. and many of our industries were owned
and developed by foreigners. This is entirely
aside. Of course. from the large amounts Of
foreign capital Invested in the: bonds of our
railroads and industries which did not give the
holders an active control p As our middle west
developed. We were able gradually to buy this
stock back, and of course. after the outbreak
of the war we acquired very large percentage.
indeed. Of the rest Of these securities 1 men,
tion this analogy because some people think
that there will be strong hostile sentiment
aroused abroad If Americans invest their capi-
tai there in such a way as to control many of
the industries. That would all depend upon
the way in which this were done.
"Of course. do not make these suggestions
a complete solution of the difficulty. but
such process would be helpful to a certain
degree along the lines of your question. The
specific answer to your question. then, would be
this: u
THE United States might well afford to re-
ceive payment of a considerable percentage of
Europe's debt to this country by its business
men taking over the ownership of certain Eu-
ropean industries and furnishing the capital to
build them up and run them"
Another advocate Of investments in Europe
a solution of the problem is Theodore H.
Price, editor of Commerce and Finance. He
says:
afford to receive payment of Europe's debt to
this country?
II answer that it is neither essential nor
desirable that Europe's debt to this country
should be paid. Prior to the war the United
States was continuously In debt to Europe. and
our bonds and stocks were preferred invest
ments there. AS long gave good security
and paid the interest regularly the Europeans
were content to lend us and renew the loans
.Now that conditions are reversed should
be willing to lend to Europe provided she can
give good security and pay q fair rate for the .
money borrowed.
"The theory that we must collect what is
owing us by solvent debtors is archaic and re-
fleets the .outworn philosophy Of those who
think OF America as detached from the rest Of
the,world. To collect the debts due US in either
gold or goods would ruin us. We can only
hope to prosper as we use our surplus wealth
to promote the prosperity Of customers.
This lis the way in which England has grown
SO great commercially and financially. We
should study and apply her economic philos-
ophy.-.
1.-THE bank that insists upon collecting every
daht n III 4 HUOfl IN avis Tho
same statement applies to a nation It's truth
is SO obvious that 1t needs no exposition"
-. *.* * X
somewhat elaborate program for solution
Of sthe problem is submitted by W. H Stack
house Of Springfield Ohio. president of tho
National Implement and Vehicle Association
which is an organization Of the manufacturers
Of farm operating equipment
Mr.. Stackhouse for the purpose Of treat
rnent separates governmental Indebtedness from
commercial credits. He would have the Eu-
ropean governments issue bonds to the amount
Of their debts to this country. the bonds to
mature serially. during period beginning fifty
years from date Of issue and ending one hundred
years thereafter, and bearing an interest rate
not in excess of per cent. He makes no at
tempt to discover a market for such bonds, but
specifically states that this government should
not guarantee them. s:
He would have-s liquidation Of commercial
credits in goods, and would draft the pending
tariff bill to make this practicable WITH 1t is
to be assumed, the least possible disturbance to
American industry.
Patience and liberality, inspired by enlisht-.,
vanced by John e. Edgerton Of Nashville. presi-
dent Of the National Association of Manufac-
turers. In response to The Stars inquiry. he
submits the following: -