New-York tribune., 1921-01-07
Criticism Of War Finance
Corporation Revival Is
Basis for Prompt Tabling
of Committees Views
No Action ON immigration
Resolutions Urging Restr;c.
tions Put Over; MilIer's
Economy Policy Approved

S"AiiP ASllE several Oh lHt
most distinguished banker members of
the nody, resulted yesterday in its be-
ing tabled with surprising abruptness
at the monthly meeting Of the Cham
per or Commerce of the State Of New
York.
Eugene Meyer jr., former manag-
ing director of the War Finance Cor
! poraton, who has been actively push
ing the campaign for resuscitating the
organization as an effective aid to for
ssign trade, led the opposition. The
the chamber, headed by Thomas w.
Lamont, of J. P. Morgan 4 Co., and
having as its other members Paul M.
/ Warburg, formerly Of the Federal Re
serve Board; James S. Alexander, head
of the National Bank Of Commerce,
and Herbert X. Twitchell. chairman of
tbe Chemical National Bank, sponsored
the report, which failed of adoption by
q vote OF 66 to 81. Otto T. Barnard,
another member Of the committee, did
not attach his signature TO the re-
port. The move to table the report
came so suddenly ard unexpectedly,
after MIR. Meyer had spoken briefly
against its adoption, that there was not
! opportunity for further debate.
At Chambers Request
The report of the committee had
oeen made at the request Of the cham
Der, which sought comprehensive in
vestlgation of the problem Of how to Sc
cure adequate relief, either through
the ordinary channels of American
banking or through such extraordinary
measures as might be warranted in the
circumstances, for American foreign
trade in its present unsettled condition.
Special study was made of the Ques-
ton Of the wisdom of setting into oper-
alton the War Finance Corporation. In
this connection the committee in it's
report said:
"Any attempt to revive the War
Finance Corporation and to instruct it
to resume its operations in compre-
hensive manner would, in our judg-
I ment--with every respect for the Com
gress, which has expressed a differing
point Of view-prove ineffective and
unwlse. The reasons which lead US
70 this conclusion are inherent in the
whole situation, which we venture to
summarize as follows
The trouble from which we are suf-
fering to-day does not affect any par
tlcular class, nor any particular sec
tion nor any particular country. If by
chance it bears with particular weight
upon the American farmer, still the
American exporter, the wholesaler and
the retailer, all feel that they are
| equally burdened. In fact, it is not q
local trouble, but one that embraces the
whole world. From that point Of view
it must be examined
THE world at present does not suffer
| so much from ovel production as from
under consumption in central and east
ern Europe on the part OF hundreds Of
millions of people. This under consump-
| ton is due partly to social and political
unrest tho fri Of Il
| partly 1--WE might add mainly) to the
! exhaustion Of their credit. Millions oi
| people in those countries are living in
conditions of under-nourishment ant
partial or total idleness. They neet
the surplus Ioodstuffs and the raw ma
terials that are drug on the market;
Of some of the producing countries
But these goods cannot be moved from
where they are burden to where the,
are necessity, because the purchasin,
power Of the peoples that require then
| has been exhausted and because politi
= cal, social and economic conditions ar,
ID such that these peoples in need canno
/ themselves produce enough to pay b,
l an exchange of goods for what the,
I require.
Sales to Europe
| "Since the beginning Of the war, III
! United States has sold to Europe ant
to the world at large some S18,000,000,
4 600 of goods in excess Of What tn
world has been able to pay for il
goods. During the period that Amerc
was in the war and in the months i'm
nediately ensuing, our govcrnmen
Itself advanced approximately $4,000,
4 100000 to Allied purchasing countries
After the armistice and as loans b.
I our government diminished. we under
took to sell on credit granted throug
! individual loans. This brought abou
corresponding banking expansio
/ with US and resulted in floating in
debtedness Of Europe to our banks on
industries estimated by close student
Of the subject at upward of $4,000 coo
I 900. During all this time imitation pro
I ceeded all the world over, moderated
I in some countries, at mad pace i
others, and prices rose accordingl
4 to more or less dizzy heights. The SUI
- fering to which all the world was sub
jected by the abnormal increase o
prices caused an insistent and deter
Y mined demand that something shoul
II be done to terminate this fatal cours
| and to bring the world back to a NOR
Il normal price levels. 1t was clear t
II every student that an adjustment coul
~ be brought about only by a dccreas
IN wasteful and productive gov
II ernmcnt expenditures; by create
II economy on the part of the people; b
more effective production, this last j
turn being predicated upon a prope
u distribution Of raw materials"
Referring to conditions in Europ
Q. the committee held that Germany's rui
= would vitality affect all Of her creditor
- and that, therefore, as the first ste
OF reconstruction the indemnity uues
- tion must be solved in way that wi
I permit Germany to survive and to ful
| FIJI her obligations TO the maximum O
/ her ability. "Until the indemnity t
be paid by Germany is dctcrmincd,' tn
L report said, "and in manner that give
II TO the world confidence thut basi
Il has been found upon which polite;
II and social peace in Europe is reason
| ably assured and an era OF econorni
| construction is in sight, there is n
| solid foundation for hope that govern
! ment budgets may come under prope
control and that the depreciation {
ii foreign exchange may be arrcstc. /
- on the other hand, the decline IN e,
change iB to continue, what is thel
n to warrant our expectation that q
II artificial increase Of credits granted
II fOreiFn countries would do marc Nh.