The Pensacola journal. (Pensacola, Fla.) 1898-1985, 1921-01-18
CREDIT RELIEF IN
EUROPE PLANNED
Mississippt Valley Association Urges
Government Finance Corporation.

credits In Europe and a system of
financing export shipments forms the
basis of a unique plan which has been
submitted by group of prominent
Valley exporters for the consideration
of the Mississippi Valley association,
an organization seeking the CONNER
cial and economic development of the
| 81 Mississippi Valley states. James 3.
Morrow. managing director of the as
| sociation, with headquarters here,
| made public the plan.
In line with the adopted policy of
| the association, the plan will be sub
nitted, in the shape of a question
naire, to the export interests,
both manufacturing and agricultural,
throughout the 81 valley states for the
purpose of securing the combined
Valley opinion of the plan, prior to
it's rejection or acceptance by the
board Of directors of the Mississippi
Valley association, Morrow said.
A committee consisting of the fol-
lowing has been appointed by Fl. H.
Merrick, of Chicago president of the
Mississippi Valley association, to de-
termine the sentiment of the Valley
interests toward the plan: Robert S.
Alter, vice. president. American Tool
W
horn, general counsel, chamber of
commerce, Milwaukee, Wis; John Y.
Carr, international freight contractor
Detroit, Mich; and James B. Morrow
managing director. Mississippi Valley
association, st. Louis, Mo.
$4,000, 100000 Creditor.
The plan submitted. with attending
comments, is as follows:
1.-THE United States government is
creditor of the allied governments
of monies loaned during the war and
postwar period in the sum of ap-
proximately $s,5oo. 600, which, with
accrued interest, amounts to a sum
in excess of $1,000 100000.
Terms of ultimate payment, inter-
est rate, funding, etc. have never been
worked out. This large indebtedness,
under existing conditions, constitutes
a non-active asset which should be
made available for credit purposes.
| The fact that the interest has accum-
ulated heavily and that no plan of
settlement has been agreed upon, has
un doubtedly been a major factor in
depressing foreign exchange to the
present point, where our export trade,
in many lines. especially products of
the farm, are in a serious condition.
ITO relieve this situation, the folr
lowing suggestion is made: That this
indebtedness from our allies, both
principal and accrued interest, be
funded at low interest rate, amor
tized on a basis of yearly payments,
over an extended period of not less
than twenty-five years, first payment
under amortization to begin five
years from date of funding.
To Form Corporation.
ITO make this plan effective. that
the required legislation be enacted
creating a United States government
finance corporation.
"The act creating such finance cor
poration to fix the amount of its cap
ital in sum sufficient to make the
plan effective.
THAT this corporation be authoriz-
ed to issue its own short term bonds
at an attractive rate of interest, for
example, six per cent, for sale to the
general public. at par; the bonds to
be subject to retirement within GER
tain limitations on call, the bonds to
be secured upon the funded foreign
debt and the assets of the corpora
ton, either in whole or such part as
the plan and program might require.
Canal commission and the Philippine
commission at present are empowered
to issue bonds on relatively high in
terest rate, which are readily absorb
ed by the general public, and that
such part as the plan and program
might require.
"It Is to be noted that the Panama
Canal commission at present are en-
10 olotS Two w
high interest rate, which are readily
absorbed by the general public, and
that such issues have no material
effect upon the so-called government
bonds.
Credit Without Collateral.
THE finance corporation to have
power, along clearly defined lines, to
finance export trade through the ex-
tension of credit, either to approved
foreign firms on terms of payment
ranging from six to twelve months,
with or without collateral according
to the conditions present in each case,
or to foreign governments upon sim
liar terms and conditions, especially
so in cases where purchases Of COM
modities and products are made
through governmental agencies as is
now the case in some foreign coun-
tries.
1.-The plan outlined would break the
deadlock now existing. on which
wheat, corn, cotton and other pro-
ducts of the farm. and of our mills.
factories and mines, where. by reason
of present exchange conditions lack
of credit abroad, buying power is al
most absolutely lacking.
Stabilize Foreign Exchange.
The finance corporation, under
management and control, and under
the complete supervision of the feder-
al reserve board, and functioning
through its instrumentalities, would
soon stabilize foreign exchange, but,
primarily, would make it possible for
the United States. through the extern
sion of credit under proper conditions
throughout the world, to relieve the
condition of Syer-production at home