New-York tribune., 1921-04-02
Davis Doubts
Aid to =. S. i'm
Canceling Debts
Former Under Secretary Of
State Tells Bond Club
Marking OFF Allied Loans
WouldNotSolveP Problems
Other Ways to Settle
Accepting Foreign Goods for
Payment Not Only Meth
cd: Discusses Trade Plans

Norman H. Davis, former Under
Secretary Of State, in an address yes
.srdsy before the Bond Club, declared
,h.t cancellation of the Allied debt OF
$4,000 100000 to the United States
r-.asury would fail to solve Americas
foreign trade problems. The real
remedy for the existing deadlock, he
s.;d. WAS the investment Of funds due
tn Americans in ventures overseas.
"Therc src those who advocate the
.,r-ellation Of the debts Of the Allied
royernments held by the United States
Government. which amourt to approx
n.tslv $4,000. 900, 900" Mr.. Davis, who
renresented the Treasury in arranging
,bsse loans. said in his talk to invest
vent bankers who met ut luncheon in
ths Bankers Club, "upon the theory
that these debts can only be paid for in
,nods: that we do not need and can
not take the goods without detriment
"a our industries; and that as we must
hsvs tariff to protect American indus
tries. which would be inconsistent with
the collection of these debts, it would
10 to our advantage to cancel the debts.
"Those who advocate this remedy
claim that it would not only protect
American industries, out would also
increase Europe's capacity to purchase
aur goods. They seem TO overlook the
;sct that since 1914. when we owed
,omethiuc like $4,000, ,ooo, 900 through
American securities held abroad, the
World now owes US, besides the $4,000,
mo 900 in loans and securities held by
our hanks and investors, and that if q
cancellation ~ the ,000.000,000 is
necessary because we cannot take
goods It would still leave unsolved the
ouestion OF the foreign debts and Sc
cnrjties held privately N the United
states and the settlement of our future
trade balances. II this contention were
sound We would have to cease to sup
niv Goods and services beyond what
wa take in return and would have no
means OF collecting what is already due.
Other Ways to Settle
"There are of course. ways other
,ban the shipment of goods by which
ths world may settle it's adverse bal
.nce with the United States, and this
Is what particularly desire to discuss
with YOU. 1t Will perhaps clear this
question in our minds by an examlna-
tion Of lust how a similar problem has
been met in the past
"At the outbreak of the war it was
generally estimated that Great Britain
had foreign investments to value ap-
nroaching $4,000, 100000. What does
this mean? 1t simply means that dur
ing the twenty-five to forty years previ-
ons thereto Great Britain's total for
eien income for goods and services
amounted TO something like S20,oo0,-
100000 more than her purchases and
expenditures and that instead Of shut
ting down on exports or cancelling the
balance in her favor this balance was
used for the building of railroads, the
Development of mines and other indus.
tries and trade activities abroad. Had
this not been done the foreign balance
could have been settled only with such
difficulty that sterling exchange would
have gone to premium, just as the
dollar is to-day. and would have SO re-
NAMED until corrected.
May Expand Commerce
"In substance it may be stated that
the maintenance of her position as