Evening star., 1922-05-18
URGES us. TO AID
EUROPE WITHHOLD
VanderIip Would Take Part in
London Conference, But
Avoid Commitments.

Most central banks in Europe are
today sin varying degrees OF IN
solvency," Frank A. Vanderlip, New
York banker. declared in a cabled
review Of the Genoa conference sent
to the annual convention of the
Chamber of Commerce of the United
States. The plan for conference at
London of such banks therefore prom
ised little Of immediate result, 1e
added. and their proposed co-opera-
tion in the solution Of Europe's finan-
cial difficulties would be difficult to
realize"
Describing the Genoa conference as
"a clinic which was circumscrtbed
might discuss. Mr.. Vanderiip recon-
mended that the United States enter
the proposed London financial meet
ing, but only with an understanding
that our federal reserve system oe
kept free from alien commitments
ernment for the attitude 1t has main
tanned toward Europe, and said the
chamber should refrain from en-
barrassing it by suggestions.
Greatest Ills Passed Over.
"Officially the conference was not
permitted even to examine the moro
serious diseases Mr.. Vanderlip said.
Nevertheless unoff1cially their nature
has come to be more clearly under
stood.
THE diseases of fantastcally ex-
cessive reparation claims; of excess
sive military expenditures. causing
inevitable unbalanced budgets: of
boundary lines that outrage economic
and clinical principles; of interest
to destroy the hope of solvency-
these diseases could not be officially
studied ard diagnosed. The disease
Of the economic isolation Of Russia.
having a population equaling nearly
one-tenth Of the world. has been ex-
red to further study by The Hague
commission
Russian Issue Overplayed.
owing to the prohibition on dis
cussing more important subjects. the
immediate economic Significance of
Russia has been absurdly emphasized
Under the most favorable agreement
conceivable with Russia that country
would not be able to make any i'm
portant contribution to Europe for
several years. An agreement with
Russia when obtained will for a long
time only furnish an opportunity to
send goods on credit. Little or no
hussian production can be returned
In exchange for several years.
The financial resolutions adopted
are sound. but. for the present. neces-
sarily ineffective. They declare the
stability of currency value a requisite
for economic reconstruction. That Is
impossible of accomplishment while
budget deficits persist. Balanced bud
gets must await reduced military ex-
penditures. Disarmament could not
be discussed here, but must be before
budgets can be balanced. Therefore,
reduced military expenditures are a
prerequisite TO establishing currency
Help With Gold Needed.
American participation In the Lon
don conference Is highly desirable,
but 1t Is important. however, that we
should not involve the custody of our
bank reserve In commitments to sta
btlize European currencies. 1 believe
that America should study a plan for
segregating some of Its gold stock to
help Europe stabilize her currencies
after budgets are balanced The
American gold reserve is so large that
II will otherwise invite dangerous In
hation. Our federal reserve system,
however, should be kept free from
entangling alien commitments. We
might organize q parallel institution
to cooperate with the central banks
Of Europe and thus avoid any unfor-
tunate commitment Of the federal re-
serve system"