New-York tribune., 1921-03-13


"ii' be very gradual. and, though less
rate of profit will be made than if
prices were stable, it will be on a larger
quantity, and the can still be room FOR
fair return on capital and a fair re-
ward for labor.
This is the kind of defation at which
we ought to aim-dcfation which will
be brought about by greater supply
OF the commodities we all need =
greater surplus for foreign export and
larger total of real wealth. This is
the dehation which actually took place
curing the nineteenth century after the
Napoleonlc wars. For over thirty wears
prices fell, not through an artificial
limitation of credit and a restriction
OF business, but by an immense addi-
ton to output which the great indus
trial inventions Of that century rem
dered possible
Our financial policy, then, should
be one which will stimulate production
and trade The only condition under
which torty-seven millions of people
can live in these islands is that our
output should be up to the highest level
OF our industrial capacity, and that the
surplus of goods which we do not con-
sumo ourselves should be freely ex-
changed for imported food and raw ma
terials.''
England has spent hundreds of years
in building up her position as trad
ing country. To do this she has also
become creditor country. The United
States during the war took the leading
position as the greatest creditor coun-
try of the world, and England now
finds herself in difficult situation in
the question of outstanding loans.
Frederick c. Goodenough, chairman Of
Barclays Bank, says in his annual re-
port:
"Thc difficulty has arisen that where
as the money we owe abroad-and it is
very large SUMS for the most part
payable on demand. that which is owing
lis depends for payment on the return
of those who are our debtors to a
sound financial position. and this will
take time. 1t may be that, as a matter
of business only. it would pay us to
| make concessions in respect of debts
owing to US by Allied governments.
provided We do not thereby prejudice
our own ability to pay.
We might, for instance, consider the
possibility of part cancellation Of
those sums lent to our Allies for the
purpose Of purchasing munitions in
this country while retaining their liza
bility for those sums which in effect
represent money lent to them by the
United States through ourselves.
The better exchange conditions which
should follow might enable great part
of what is already owing us on trade
tran sactions to be paid, and this would
remove congestion, besides giving an
opportunity for fresh trade
Need for Peace
This same report contains a speech
by Sir Herbert Handling, deputy chair
man Of Barclays, which gives the atti-
| tude of large group of English busi-
other former enemy states. He says:
"l feel strongly that peace and pros
perlty in Germany and Austria are
just as essential to the welfare of the
world to-day as they were ten years
ago. We must not forget that in pre-
war times our second best customer
was Germany | believe that we ex-
ported to that country more than 500
100000 Of goods and, although l do not
desire to see Germany competing un-
fairly with us, it is most essential that
we should not cut her out as q con-
sumer of our goods We want those
countries for what they will buy, and
in measure we want them for what
we can take from them.
These are the views Of represe nta :
tive leaders in English banking. In
lllc main tutN UOlU lue SdllIt bIIllClUltS
for the solution of the reconstruction
problem. Resume production. Resume
, trade, opening the markets of Russia,
Germany and middle Europe. Debate
the currency. Stabilize credits. But
beneath the plans for world recon
struction is always one thought
what will the United States do? Amer
ca has the money; she is the creditor
nation On her financial cooperation
L. J Il
scheme of reconstruction.
american IieM
"Americaa business mas realized that
a broad participation in European prob
lens is necessary said Willis II.
Booth, vice president of the Guar
/ anty Trust Company when in London.
"Our people are beginning to think
internationally and this is the first
step toward taking an active part IN
the business OF the world. We realize
that we must not only extend gn
credits, but take part in supporting the
! development OF new countries. must
expand our trade relations. In this the
Foreign Trade Financing Corporation
should take leading part.
"The indemnity agreements at Paris
have served a fundamental purpose in
establishing long time basis as a
principle controlling indemnity pay
ments. The Allies are not going to get
a large lump sun. imm ediately. This
will mean that reconstruction will be
slower, that the operation of industry
will demand immediate credit to op-
crate on, and that the credit supply Of
the world will be hard pressed. Amer
ica, therefore, in lending money abroad,
will have to give credits OF long
time character, as contrasted to her
| former policy of short-time notes.
"Part of our plan for larger world
trade is the Foreign Trade Financing
Corporation recently established in the
United States. This organization will
furnish industrial credits to concerns
who have valuable fixed assets yet are
short Of the liquid capital for opera
ton. Yet credits abroad must be
based on reasonable political stability
| and sufficient economy in government
operation to make it possible to get
| along without excessive or conibscatory
taxation. The United States will CO.
operate in credit operations in Europe.
but it will want reasonable guarante
that the money invested will not be
wasted. but will be served to further
productive industrlalism.
There can be no permanent eco
| nomic balance in the world while Rus
sia is non~productive Eventually the
Soviet will be replaced by stable gov
ernment: when it is the rest of the
u,orld will he ready to advance Russia