New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1921-05-28
White House Conferees
Agree Currency Defa-
ton Is Low Enough
and Should Be Checked
Credit Extension
To Farms Sought
Administration Fears
Competition of Foreign
Bonds With Securities
By Carter Field


WASHINGTON, May 27.-The New
York group of international bankers
has agreed to throw it's support to the
Export Finance Corporation, organized
under the Edge act to finance exports
OF American commodities, it was said
at the White House to-day. This is
the most concrete result of the con-
ference of the New York bankers with
President Harding and Secretary OF
Commerce Hoover at the White House
night before last.
1t was also broadly agreed that the
drive to dehate the currency-which
has been one Of the tendencies work
ing toward lowered prices, and also
incidentally, hard times, which ia the
cause of the interest of the Admins.
tration--had gone about far enough
Both the bankers and the President, ii
was discovered, favored some checking
OF the process, and all agreed that
something should be done to permit
further extension of credit by the Re-
serve banks, particularly in the grain
and cotton raising sections.
The fact that the punitive progress
sive discount rate had been applied by
the regional reserve banks in the Kan
sa3 City and st. Louis districts was
discussed in this connection. and
though no definite decision was reached
as to the extension of more liberal
credits without applying this punitive
rate, the tendency seemed at least in
that direction.
In this connection the sentiment of
both the President and the bankers
seemed to be that, if the regional re-
serve banks watched their member
banks just as the member banks watched
their own customers, observing that
money loaned was employed for pur-
poses healthful from the standpoint of
sound business, it would be safe TO re-
lax some of the restrictions on credit
Discuss Foreign Bond Sales Here
The objections of the Administration
to the sale of foreign bonds in the
United States, including not only Ger.
man reparatlon bonds but all kinds OF
foreign issues, unless the proceeds OF
the bonds should be expended in the
United States and thus encourage ex.
ports, were also the subject of vigor-
Gus discussion at this conference of the
President with the bankers. it was
learned at the White House to-day.
AN Administration spokesman said
that the bankers attempted TO show,
that all extensions of credit to foreign
countries resulted eventually in the
purchase of American goods for export
Inc bankers cited an instance of a
european power borrowing money in
the United States and then using the
money for the purchase of wheat in
the Argentine. The bankers asserted
however, that Immediately Argentine
used this money, received from the sale
or her wheat, for the purchase of man
ufactured goods in United States.
But while this was admittedly de.
slrable, the Administration spokesman
pointed out, and while the argument
had merit, nevertheless the whole
transaction did very little to helm the
American farmer who was holding his
wheat and who would like to sell il
abroad and buy machinery right here
at home.
The Administration apparently nut
up strong defense against the argu.
ments OF the international bankers fol-
permission to sell European bonds nj
will to American investors.
Banks Interest in Commissions
Frankly the bankers, which is
nothing more than natural, are inter.
ested in the liberal commissions which
they would make in selling the bonds
said one Administration spokesman,
The. main concern of the Administra-
ton, as was pointed out in The Tribune
Thursday morning, is to use every
ounce of csedit which America can
spare for foreign loans for the stimu.
lation of American exports. Every dol
lar loaned abroad, if the Administra-
ton has its way must be spent in the
United States. In that way American
commo odities and products will be sold
abroad, and the wheels of industry
will be speeded up. The banks in the
agricultural districts will be paid by
the farmers who have been holding
their mortgaged 1920 crops for higher
prices, the farmers will begin buying
manufactured products and the facto-
ries will begin reopening.
Thus, the Administration believes
and thus only, can prosperity be re-
stored, and it is not exaggerating or
betraying confidence to mention at this
Point that the Administration is ex-
tremely eager for prosperity to be
Continued on page throe)