South Bend news-times. (South Bend, Ind.) 1913-1938, 1922-04-23
FOREIGN RESERVE
BANK WILL STEADY
EUROPE: SEN. OWENS
Declares Genoa Conference
Not Likely TO Provide
Cure for Financial III.
wAsHEGTOE

Cure for + LuancIal IL.
wAsHEJGTOcl. apr! "a
&hls the Genoa conference may
rove useful n partly adjusting
EUrope's economic ard financial ills.
% is hardly likely 20 provide a per
uaaeEt paracea Tor them until the
frrosp ons.bie and haPnazard none
tary and exchange system prevalent
I'D most European countries is thor
ough.y overhau.ed and ree5tabI.sh-
ID
This is the opinion OF Sen. Robert
T. Owen OF Oklahoma ransiuE
democratic member Of the senate
banking and currency committee.
ard rs chairman during the eight
years % the Wilson administration.
Sen. Owen recently returned from
A six weeks visit 90 Europe for the
purpose or studying its financial. IN
lEs-ria! and commercial conditions
aud the possible application 0s them
20 a federal reserve banking system
he has pending in the senate
bill FOR the establishment OF a fed
eraI reserve foreign bank lie was
one % the authors OF the leg.sla-
ton enacted during the Wilson adj
m.uistratl0n for the creation Of the
present federal reserve system in
this country
Europe is Improving
1T is true that Europe is steadily
improving. said Sen owen. "but
80 viii take several years 20 get Eu-
rope back 20 fun production The
dislOcations OF war have broken UP
tens % thousands OF small business
enterprises and have diminished the
purchasing power OF millions OF
Asople Russia IS az present al
ost entirely out OF the market,
and eastern Europe generally IS
greatly weakened in the ability 10
buy
European industries were a1ect-
I'd BY the boycott IN India directed
by Gandhi. China is not buying Eu-
ropean goods 20 the extent that 10
formerly did, but aside from these
and similar conditions the worst
feature Of the European situation
which I observed is the unwilling
ness and inability OF many states TO
restrict their expenditures-to cut
them down 70 their incomes
And these states are paying their
bills with paper money. which they
print In an irresponsible manner.
This paper is usually regarded as
legal tender as promises TO pay I'm
gold. but without the possibility of
redeeming It In gold.
Even the English pound sterling
is not yet redeemabIe in gold II is
at discount OF about so cents: the
French franc is also at discount
in terms OF gold. or about half. the
German mark has gone down TO a
seventy-ffth part Of its normal
value; the Austrian crown 20 about
a fifteen-hundreth part OF its gold
value; the Polish mark is in a still
worse shape, and the Russian ruble
has dropped 20 a ffty-thousandth
part of its gold value
such terrible depreciations as
the latter are incapable OF repair
and leave the people affected by
u EN- without an adequate cui rency
Nth which TO make their contracts.
And until the European nations cor
rect this condition themselves and
OF their own motion it Will be ex-
tremely difficult for America 10 rem
der them the very great service
which America is naturally in a DO
sition 20 do"
Sen owen said that his bill
could be made OF gigantic valoe TO
Europe II the European govern
meuts and European banks would
do their part" but that the United
states could not afford 10 partici-
pate IN very great way IN the res
toratiOn Of Europe unless the Gu
ropean nations were wiring 20 bal
ance their budgets, live within their
incomes provide means for amor
thing their debts and receive with
open arms tho service which Amer
ica couIA render"
Growing Jealousy Of L. ="
There appeared 20 me TO be On
some parts Of Europe a growing
Jealousy OF America" Sen Owen
continued. "Iu many instances the
banks were not like American COM
mercial banks. run on strict prin-
eiples of banking. but were oper-
ated as trust companies in charge
of innumerable commercial enter
urises ir which commerce and bank
ing were intertwined
They had. as a rule no adequate
public system Of banking eNamina-
tlons. the banking was very largely
treated. outside OF the state banks
as q private enterprise and the
49, banks had become instrument
Wliices for the putting out Of depre-
c.n,ed currency"
Sen. owen expressed the opinion
that while The Genoa conference
would De useful" despite the umi-
tatt1a Of its acenda it was bound
I'D be followed by more comprehen-
slve and more useful conferences"
Productive Power Enormous"
The wealth OF productive power
~ Europe is Uuquestionab enor-
NOUS ne said 1T Us potentially
greater than ever Europe should
be entirely able 10 pay her deots 90
America but IN my Judgment album
dant time ought 20 be allowed for
their payment in order 20 prevent
serious interference with American
industries 1u any one season. for
Europe must paw her obligations in
terms of commodities just as Amer
lea loaned 90 Europe in terms OF
commodities
Altogether think Europe is
steadily entering upon an era Or
prosperity. uotwithstanding The ter
rible poverty OF many individuals.
2 Viii take time and patience be-
fore she is really able 90 get on her
feet. The distribution OF wealth in
Europe under the prevailing mono /
poly system and monarch!stic rule
is exec edingiy painful and IS mani- /
fest almost everywhere. but these
unfortunate conditions are sure 90
gradually correct themselves under
the direction OF advancing demo +
cratic rule-aIthoush am afraid .