The Washington times., 1922-03-28
MONEY-TRADE
Invest In Business.
Loans to Bankrupts.
Bleeding U. s. Investors.
Money Mad Europe.
BY GEORGE w. HINMAN.

CHICAGO. March 2S.-"Seek
market for American money;
America urged to invest in Far
East; Csecho-Slovakian loan"
These were three headlines In
the financial news Of yesterday.
,They are all interesting. They
all direct attention to big facts in
American business. But they and
the items under them are con-
,fusing in this respectfully do
private business investment and
ordinary Government loans. And,
in the whole business of world
finance, this 10 about the most
important line to be drawn by
American business men.
The American people are sup
posed to have more than 100000
100000 of their money scattered
over the face Of the earth just
now. OF this amount, about $14,-
600 600, 900 Is in loans to national,
provincial and city governments.
These loans are official, and the
money IL spent not for business
but official purposes. There is a
certain per cent paid annually to
the lenders in the United States,
and the best that can happen In
that the American bondholders get
their interest regularly and their
money back.
Proposition Bad One.
This sort of proposition is not
especially rich or promising. 1t has
a good many risks in these days of
new nations and shaky govern
ments. OF course, the American
firms that float the foreign loans
on commission do not worry about
the risk. for as soon as the firms
have sold the bonds they have their
profits and the bond purchasers are
left with the chances. But, the peo-
pie whose money Is paid and the
Government in Washington are in q
different position. That Is doubt.
less the reason tbs Federal Govern
ment has let 1t be known that for
eign loans In the future should be
submitted for approval to the
United States Treasury before being
passed on to the people. Why is
this advisable?
Well. let a business man consider,
for instance, the proposal to put out
part of a 100000 or $4,000, 10000
loan to Czecho- Slovakia. This may
be a perfectly good loan, but only
the Government can ascertain off
hand how good. for the Czecho- Slo.
vakia government is hardly a bust.
ness concern.
With only three or four years of
existence, Czechoslovakia has a
total debt Of $1,000 900 900 and it's
money is 80 per cent below par.
About as big al Illinois and as pop
ulous as New York State. Czecho-
sloxakia already owes the United
States $4,000. 900. So an additional
loan ID more q matter of political
faith than business enterprise. The
United States Government has the
information and can give 1t. II the
information is favorable, well and
good. Otherwise-well, otherwise
one would say the American people
had put enough money into foreign
governments, and might better use
the rest OF their spare cash in real
business enterprises, either at home
or abroad.
Cease Government Loans.
In a word, the real business Of
the future does not lie In financing
any more governments across the
Atlantic. Our investments OF
American money in foreign govern
ments are too large already. They
overtop our commercial investments
abroad to a preposterous extent.
In all the violent financial changes
Of the last five or six years Ameri-
cans have invested abroad about ST.
900 100000 new money in business
enterprises and about thirteen or
fourteen times that amount in polit-
ical governments, some of which
have hopes Of paying a hundred
cents on the dollar, several Of which
are talking reputation. and only
three of four of which are safe and
solvent.