Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1921-09-28
World Currency
Findnciers' Hope
Continued from PAGE One

Continued from Page One
States to consider the remission of debts
is another obstacle.
Less is likely to be heard Of It in the
future unless the present German crisis
develops to point where future pay
ments of reparations becomes impos-
slble, when q cancellation OF debts
would become q means not so much OF
restoring international exchange as OF
preventing the spread Of international
bankruptcy from Germany to countries
whose credit rests upon their ability to
collect damages from Germany.
Significantly Mr.. Churchill In his
speech turned quickly from this idea of
cancellation or reduction of debts to
the more practical one Of creating "a
medium Of international exchange which
would be unbiased by war obligations
and would secure, at any rate tempor-
arily and during the period of recovery,
the sale of goods between nations on
natural and normal basis
That is the project to which bankers
and Government officials like Mr..
Hoover, interested In trade and COM
merce the world over, are giving consid-
Grafton. Such a currency would have
to rest, like the currency first evolved
for exchange among individuals, upon
the credit of individuals. In country
like Germany, where the Government,
in the view Of the best Informed Cab
met officials, Is fast approaching bank
ruptcy, there are industrial forces, like
the SHINES group, whose credit is
sound.
Any currency which would pass in
the markets Of the world would have to
rest in some way upon the going in
dustries of the countries.
To such industries the debased cur
rency of their own lands is no handi-
cap. It lowers the cost Of wages to
them. 1t lowers their debt to bond
holders and the interest they pay upon
earlier borrowings. 1t cheapens their
cost Of production, except so far as
they have to buy raw materials in for
eign countries. If they can buy in
their own countries in debased paper
and sell abroad in gold basis currency,
their position will be strengthened.
Whether Germany will go to bank
ruptcy seems TO depend upon whether
the present Wirth Government can put
through its proposed radical taxation
system or not. The Administration, 1t
is learned at the state Department. Is
extremely friendly to the Wirth Gov
crnment. but is not confident of its
security.
How Germany Paid
The details of the last rcparations
payment are known here. The German
Government borrowed S100. 900. 900 Of
the $3.50. 900, 900. and paid much Of u
on short term paper. 1t used up so. =
OOO. 900 Of its gold reserve. already
badly depleted. II spcculated in the
market on German marks, that is to
say. iuggled with the market and made
$50. 900. 900 more. Thus it paid only
$50. 600, 900 out of genuine resources.
This suggests declaration Of bank
ruptcy and inability to meet the rrna-
rations payment. unless radical
change of taxation is resortPd to.
If the financial crisis in Germany
grows worse. it is the contention OF
tho State Department that the impor-
tance Of America S representation in the
RcparationS Commission and the Guar
antics Commission will be groaly in
creased.
4 fall Of the Wirth Government
would probably result in pressure from
the Administration for the passage OF
an act permitting the appointment of
! an American Commissioner of Repara
tionS and perhaps resistance by the iso-
ationstS in the Senate. who would ar
que that this country should keep out
Of the steadily deepening European
financial miro.