Evening star., 1922-01-04
FAVORS j. S. BANK
BRANCH IN EUROPE
Senator Owen Proposes Link
in Reserve System for
FOREIGN Assistance.

The establishment Of a European
Federal Reserve Bank, providing a
gold-secured currency and linked in
separately with the American reserve
system, from which it would draw its
resources and reserves, was advocat-
ed today by Senator Owen, democrat.
Oklahoma, as a basic move toward
restoration of stable economic condi-
tions throughout the world.
In an extensive speech in the Sen
ate. in which he dealt comprehensive
ly with postwar conditions. the
Oklahoma senator suggested in con-
nection with the proposed reserve
bank the following proposals for
American aid in world rehabilitation:
81. 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 arranging the payment
we should extend time to Europe
necessary to enable them to readjust
their affairs and regain their produc-
tive power, and that we should not
for ten years demand of them the
payment of interest due. but allow
it to merge with the principal
"3. That We should put the interest
rate at per cent on Europe's debt
to the United States"
Reserve Act Amendment.
Mr.. Owen at the same time sub
mitted to the Senate a bill to amend
the federal reserve act so that es-
tablishment 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 $780,
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 enable the foreign banks to is
sue $2,500.O00.000 in notes, backed up
by gold. as well as 100 per cent COM
modify bills.
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 through restor-
ing the productive machinery of Eu-
rope would there be safe and sane
economic conditions.
Now ResOrtinE to Barter.
"The one great outstanding factor
breaking down confidence and de-
stroying the validity and desirability
of contracts in Europe" the Senator
continued, sis the violent imitation of
currency through 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 indus
try and commerce then Is the lack of
gold-secured currency: Thus, 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-
chantable commodities that in them
selves open and renew the ways of
trade"