The New York herald., 1922-05-15
FINANCES In EUROPE
AFFECT THIS SIDE
Hoover Reports for Inter
American Commission OH
Exchange Situation.

WAsHrNsroH. May 14--Reports from
national sections of the Inter- American
High Commission on the principal fac
tors in the exchange situation In Inter-
| American commerce nearly all concluded
that the primary factor is 'the alarming
financial situation In Eur me" according
to summary issued tonight by Secre-
tary Hoover. chairman OF the commits
sion.
The subjec. was discussed a, q meet
f, ing OF the sections OF the ccmfrission In
the various Latin-American capitals and
in Washington in December, and reporfs
were exchanged. The Latin-American
sections agreed with that of the United
states In expressing the CONVICTION that
mo fundamental and permanent relief
from the uncertainties OF exchange
fluctuations can be secured until the
situation In Europe shall have been put
on a basis of restored public confidence
and balanced budgets"
The Brazilian Section, The summary
continued. laid most weight on the bal
! ance of trade as the primary factor
affecting exchange declaring thst "if
country produces sufficien, t. satisfy all
her responsibilities II is evident that
whatever may be her internal conditions
her rate of exchange will maintain itself
close to parity
Argentine economists react ed the con-
clusion that the gold export embargo of
Argentina served IS dislocate the en-
| change between that country and the
United States in such way as to make
1t susceptible to unfav1rale circum-
stances,
Chilean members laid the blame for
the 1uctuation Of exchange between
Chic and the United States upon .he
unsatisfactory monetary system in Chile,
aggravated by wholesale imitation of pa
per currency and the coutraction Of for
eign loans.
The Venezuelan section declared that
the rise In the price Of he dollar was
due 20 dislocation in trade balances and
widespread restrictions upon the expor-
taton OF gold.
As to the length OF time the chaua
crisis may last the SUMMARY continued
the reports agreed that thare coul We
mo substantial CORRECTION
crisis in International valu
ures of values until Cover ant
relentlessly reduced public and pg
expenditures. balanced budgets and be-
gun a deliberate and gradual process OF
defation."
The Chilean report contended there
could be no genuine Improvement in the
situation until the products Of the Latin
American countries again appreciate in
value in their principal markets. and the
Brazilian section. while maintaining
that it did not believe paper money to
be the sole cause OF Brazil's financial
disorder. expresses itself as convinced
that-only the possibility of frequent is
sues OF paper money permitted immod-
crate public expenditure.
Banks and the banking groups of the
different countries. the reports held.
could go a long way In improving con-
ditions by judicious cooperat tion in the
transfer of valuable reservoirs of capi-
tai and credit and the extension of
liberal credit terms OF from six to
twelve months. The Argentine report
expressed the belief that the restora-
ton of trade balances could bc realized
only through the intervention of both
banks and governments. while. accord
Ing TO the Chilean section, London will
probably be the more attractive inter-
national market for Chilean enterprises.
despite the depreciation OF British cur
rency, because of the tariff policy of
the United States.
Several of the sections indicate. the
summary concluded that while in
theory the free expectation Of gold is
a corrective which the governments
might apply to the unsatisfactory ex-
change situations. nevertheless this can
not be authorized until the authorities
In charge Of public finances are able
to see somewhat more clearly than
they do to-day what lies ahead. 1t
would be, according to these sections,
quite dangerous to let out of the coun-
try what, after all. Is the chief sup
port of such monetary stability as
exists"