The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1922-01-04
Oklahoma Senator in Speech
Recommends World Bank.
European Reserve Linked With
American System Proposed.
He OFFERS new AMENDMENT
Would Make Foreign Banks
Back All Currency.
POstpOnement War Debts Also
Part of Scheme.

Washington, Jan. 4.-The establish
ment of a European federal reserve
bank. providing a gold secured cur
rency and linked inseparably with the
American reserve system from Whlch
it would draw its resources and re-
serves was advocated today by Sena-
tor Owen, Democrat, Oklahoma, as
basic move toward restoration of sta
BILE economic conditions turnout the
world.
In an extensive speech in the senate
in which he dealt Complementary
with postwar conditions, the Okla
homa senator suggested in competition
with the proposed reserve bank the
following proposals for American aid
in world rehabilitation:
Postpone War Debts.
"1-That we should postpone the
final payment of the World war debt
in the United States by extending the
payment over fifty years; that we
should not for ten years collect any
amount under the sinking fund.
"2-That in arrG.Eging the payment
of Europe's debt to the United States
we should extend time to Europe
necessary to enable them to read1ust
their affairs and regain their produc-
tive power and that we should not for
ten years demand of them the pay
ment of interest due but allow it to
merge with the principal.
''S-That we should put the interest
rate at per cent of Europe's debt to
the United States"
Mr. Owen at the same time sub
mitted to the senate a bill to amend
the federal reserve act so that estab-
lishment of the foreign banks would
be possible. He proposed that the
European bank should be owned by
the reserve system of the United
States, and that from the twelve
banks here it should draw total of
$500, 100000 in gold as a reserve.
This he claimed would in no way
impair the reserves or resources of the
American institutions, yet it would en-
able the foreign banks to issue So
500,OOO.00O in notes backed up by gold
as well as 100 per cent commodity
bills.
\ Need Secured Currency.
Secured currency is the sorest need
of European trade at present, the Ok
| lahoma senator declared, adding that
| if the United States provided such
gold backed medium of circulation
and then delayed collection of money
| due it from the demoralized countries
| it would do much toward reviving the
productive power of the whole world.
| He asserted that only thru restoring
| the productive machinery of Europe
could there be safe and sane economic
| conditions.
me one great outstanding FACTOR
breaking down confidence and de-
stroying the validity and desirability
of contracts in Europe" the senator
continued 'is the violent initiation of
! currency thru the printing press. In
some countries of Europe people have
! been compelled to abandon the
making of contracts in terms of cur
rency and have had to resort to the
| clumsy system of barter-so many
bushels of potatoes for so many
| bushels of corn or coal.
How can manufacturers contract
| goods for future delivery in terms OF
marks when the mark at the time of
future payment threatens a high per-
centage of loss? How can merchants
buy and sell safely in terms of marks
or other deprecated currency when
such units stretch from one value to
another without notice?
The outstanding factor that re-
tards restoration of European industry
| and commerce then, is the lack of
| gold secured currency. This the
United States is able to provide the
| means for supplying. a currency Sc
cured by gold. redeemable in gold
and secured at the same time by mer-
charitable commodities that in them
selves open and renew the ways OF
| trade"