The Washington herald. [volume] (Washington, D.C.) 1906-1939, 1921-11-23
URGES U. S. GOLD
FOR STABILIZING
EUROPEAN CREDIT
Senator Owens Warns of
Threatened Col
lapse.
LOOK TO AMERICA
Disordered Nations Helpless
without Supporting
Influence.

That the United States should use
It's gold to stabilize world finance
and check the threatened collapse
of European credit is the opinion Of
Senator Robert L. owen, Of Okla
homa-
Commenting on the financial sit
uation of Europe, he said: The
uation OF Europe. he said: The in
credit is doing a very serious in
jury to the foreign commerce OF the
United States. 1t has greatly in.
jured our export and import bust
ness. and ruined many OF our ex-
porters.
Europe is not bankrupt funda-
mentally. although some Of the Eu-
ropean governments are threatened
with bankruptcy and have a very
unstable currency
Europe is not bankrupt because
her natural resources and her man
power. except a small percentage.
remains and has been added to by
her woman power. and all labor has
been made more efficient by the
great inventions and machine de-
velopment OF five intensive years Of
war.
The government debts are in
bonds held by the people of Eu-
rope The debts are government
liabilities, but the bonds held as
evidences of the debts are assets
in the hands OF the European people.
These personal assets exactly ball
ance the government liabilities.
Cancellation False Theory.
IF we were to cancel the debts
of the European governments to the
United States government II would
simply mean having the taxpayers
of America pay 10000, OOO, 900 to the
bond holders and taxpayers of Eu-
rope on the absolutely false theory
that the European people were
bankrupt
Germany has all of its material
resources comparatively unimpaired
with the highly-trained. efficient, in
dustrious people capable OF enor-
nous production and glad to be busy
and useful. But the demands on the
government OF Germany have been
great, and the government has used
the very convenient printing presses
10 turn out paper marks by billions
upon billions. incidentally meeting
current expenses and also reducing
the value of its bonded Indebtedness
steadily to the vanishing point as
the paper mark which measures the
value of the bonds approaches the
vanishing mark.
Germany must pay February Is,
1922, a reparation OF 500, 900. 900 gold
marks (not paper marks). Euro
pean gold is frozen up. inaccessible
in the state banks. Germany must
struggle through under these terri
BILE conditions BY using credit bills
based on commodity value under
many forms.
Men in high place seriously ques-
ton the ability OF Germany to meet
this gold payment. and il Germany
defaults a crash OF credit may re-
suit in France as we'll as in Ger
many and France may march into
the Ruhr and compel payment by
military force from the German
people. where the German govern
ment has not met the pledge of the
German people and Europe may
again be set on fire and our dis
armament proposals at Washington
inJuriOusly affected.
United States Has All Idle Gold.
The United States has practically
all the idle gold in the world. piled
up in our vaults. doing little serv-
ice. compared to what il might do.
Five hundred million dollars of this
gold in Europe used as a basis Of
gold currency notes guaranteed by
the United States and by the allied
governments, made payable in terms
of gold marks, gold francs, gold
pounds, gold dollars (the common
denominator being grains OF gold),
with 100 per cent Of quick -matur-
ing commodity bills and rs per cent
OF minimum gold behind such cur
rency notes. would give Western
Europe $4,000. 100000 of reliable gold
currency notes. which would power
fully tend to stabilize foreign ex-
change. to restore the currency and
credit Of Europe, to stimulate in
dustry and commerce at home and
abroad. to revive our foreign COM
merce and enable Europe to repay
the .O0O,OOO.O00 the United States
loaned the allied governments dur
ing the world war.
The mechanism could be proyid
ed by such a great bank as that
proposed by Frank Vanderlip with
some amendments), or by the Fed
. eral Reserve Foreign Bank with
some amendments),w which drew and
submitted to the United States Sem
ate during the war.
"A prudent banker will encour-
age and support a temporarily en-.
barrassed debtor. who is fundamen-
tally solvent, by taking concrete
steps to assist him to pay.
I'VE have two gigantic instances
where this principle might we'll be
apDlied-in the case of the allied
debts to the United States, and in
the case Of Germany to the allies.
The latter might under suitable con-
ditions be easily made to assist the
liquidation NJ the former
The United States should act at
once and use this Idle gold to sta
biliZe credit in Europe.
Tt can be done with absolute
safety and would greatly serve our
own interests and help to make the
United states the financial leader
of the world.