The Washington times., 1922-08-02
COLD STANDARD
WORLD s SAFETY
SAYS WARbURC
America~in Strategic Position
Through Reverses-Must
Protect Debtors.
BY JAMES X. POLLOCK. JR..
Cosmopolitan News Service.


NEW YORK, Aug. Paul NJ.
Warburg, prominent international
banker OF New York, In discussing
today the ways and means for re-
habilitation of Europe insisted that
recuperation can not be had until
there is return TO the gold
standard. He further stated that
plans such as those advanced by
Frank A. Yanderlip and Senator
Robert L., owen, providing merely
for gold loans, ARE dealing with
the sauce in which the chicken is
10 be served before the poor bird
has been hatChed."
1T is generally admitted" said
Mr.. Warburg, that reasonable sta.
bility Of exchanges and prices is a
prerequisite focs the restoration OF
orderly commerce and trade and
that such stability cannot be at.
| tained until country returns 10
some definite relation TO gold or
god exchanges. America, through
her holdings of gigantic amounts
OF gold and short and long term
obligations of foreign governments
! individuals and corporations occu
| pies a startegiC position which can
not be ignored by any country
desiring tn return TO a condition in
! which gold obligations are actually
payable in gold without any hamper
ing restrictions.
Must Protect Debtors.
I'VE may expect that most coun
tries thus returning to a gold stand
ard will wish to secure the comma nd
n ~ al q
make il serve as n gold reserve. Rut
before most OF them may venture &C
return TO unrestricted gold standards
debtor countries must be protectc &C
through cancellation or carefully cir
Cumscribed extension OF threatening
foreign debts. In addition. their gen
eral credit must be restored TO Il
measurable degree. 1t would be mad
ness and a senseless waste to make
gold loans 10 countries that are men
aCed by uncertain credit, heavy ad
verse trade balances and large foreiRT
debts. The gold 80 loaned wOulC
travel across the ocean with an 'eX
Cursion ticket" because the debtor
country in such cases would not bC
able to hold it.
1T is true that the return to tn,
gold standard is the dot on the j,
that II is the finishing touch withou
which reCuperation would be incon
plete. But IL can only he brought
about after and in connection with 6
thorough restoration of credit. Me-
their Russia nor Austria nor Ger
many nor France nor Italy, for tina
matter. could be saved by the SOLE
remedy of substantial gold loans un
less underlying conditions are frs
Strengthened out. 1t has been wei
said that to try to cure the patien
by fussing with foreign exchanges /:
like trying TO break a fever by blow
ing on the thermometer.
Favors Moratorium.
After the accomplishment Of the
most essential preliminary steps TO
wards the restoration of Europe
credit, OF which the most important
are the granting OF a moratorium
to Germany. liberal and thorough
= enough to make 1t effective. GnC
the reduction of the ultimate .repa
rations charges in cash or kind L
a reasonable and practicable scope
I-America' and England's con
struCtive tasks can begin. They
would consist primarily in the can
collation. of some OF the debts CweC
them by their allies and a subsran
tial loan to Germany for the fene
fit OF herself and some Gf her mar
.. creditors. Finally, banking syndi
Gates could gra2t. credits 20 foreign
hanks Our Federal Reserve bank.
could assist it in such moves by
gold loans or exchange. purchases
In addition, ,our market would haV,
to COntinue to absorb larP,
amounts Of foreign securities II
order TO assist other countries tC
settle their debt balances with us
and inv order to enable Europe 4
buy our goods and live during The