New-York tribune., 1922-08-15
Houston Urges
.U.S.GiveE,lrope
Industrial Aid
Ex Secretary of Treasury
Declares America Need
Not Fear Trade Rivalry
rom Nations Abroad
Warns of World Chaos
Says Feeling of National In.
security and Finances Are
Hampering Rehabilitation
Special Dispatch to The Tribune

Davld 4. Houston, former Secretary of
the Treasury, who succeeded to the
Craftsmanship of the conference at the
Institute of Politics to-day, In discuss
ing the rehabilitation Of Europe. said
the United States had nothing to fear,
and pictured a vicious orbit in which
he said the world was moving. Mr..
Houston thinks the solution of the
problem depends on some sort of guar
anty of national security for France
and for some of the newer nations of
Europe. On this point he said
The Initial obstacle is the feeling
OF national insecurity, particularly on
the part Of France and some of the
newer nations. This must be over
come. The chief remaining problems
are financial. They are all inter-re-
lated and demand prompt and drastic
action if chaos is to be prevented from
spreading.
1T is stupid for this country to fear
Europe to-day as an industrial rival.
1t Is stupid not to see that our aim
should be to see how we can aid Europe
to increase her production and her
exports rather than to adopt measures
to hamper her industry and trade.
America Must Advise Europe
II cannot agree with those who rep
resent that if America is to participate
in movements to aid Europe it Is not
appropriate for her to suggest condi-
tions under which she might act
"Obviously the worlds thinking Is
moving in vicious circle something
like this: Exchange must be stabilized;
but this is impossible until production
| and trade increase and budgets are
balanced. These results cannot be Sc
cured until expenditures are greatly re-
duced, taxes are increased and money
printing presses are shut down, but
none of these things will happen unless
large indemnity payments are made by
Germany or Allied debts are cancelled
or unless there is disarmament. But
| Germany cannot now pay and cannot
pay in the near future in substantial
sums.
disarmament cannot take place un-
less national security is assured by
guarantees of assistance from America,
and there can be no cancellation un-
less America is willing to cancel. But
America will not consider the matter
at all until the other things happen
until there is definite assurance that a
program for European action satisfac
tory to America will be executed with
out possibility or default. And 80 the
tragic round continues. Is there any
escape from this circle? 1t is certainly
difficult to find one.
Debts Have Not Burdened Allies
"The Allied debts have not been an
actual burden on the Allies or until
recently an actual factor in the eco
nomic situation. Neither principal nor
interest has been paid, and, with the
possible exception of Great Britain, NO
Ally has made provision in its budget
for interest. If the debts were wiped
out now the finances of the Allied gov
| ernments would not be directly af-
fected. Such action might result in
reduction Of reparations, but 1t would
not enable Germany to make large i'm
mediate payments. 1t might result in
efforts to float loan, but this would
| not be wisely based, in my judgment,
unless the nations concerned commit
ted themselves to very definite pro-
grams of reform involving a certain
"At present discussion of cancella-
tion by the United States of debts due
it by the various individual European
nations is academic. The overwheln1-
ing sentiment in official circles as we'll
AS throughout the country is against
cancellation. The existing law is
against it.
"The present debt commission
cannot camel the debt and, fortu-
nately, it's legal instructions are such
as to make it impossible for other
necessary and wise action. In time it
must report to Congress and ask for
wider powers. 1t must at least have
| power to fund the principal into bonds
with very long maturity, to make it
possible to forego the interest for q
pend interest payments for another
period.
Says Europe Cannot Pay Debt
| "In the present condition of Europe
and of international trade Europe can
not pay any part Of the principal Of
the debt, or the interest, without seri-
Gus detriment to her and to America.
1t is physically impossible for us to
| receive payment and at the same time
| to extend, or even to maintain, our
! foreign trade, and it is singular that
| the very people who have clamored for
payment of the debt should be most
insistent on measures to stimulate our
! foreign trade. They favored revival
Of the War Finance Corporation to
stimulate trade, and some Of them
have advocated subsidies to carry
trade. Yet with balance of trade
already running against Europe in the
| billions, they think it possible for Eu-
rope to pay the debt. But this is not
the whole story At the same mo-
| ment, they passed an emergency tariff
bill to restrict imports and now favor
wholesale upward revision of duties
| which will greatly restrict trade with
Europe. if it does not kill it.
Certainly one Of the things this
| country can do to aid itself and Eu-
rope is to suspend efforts to go in
| half dozen different economic direc-
tions at the same moment. It should
quickly develop program which will
facilitate trade by encouraging the ad-
| mission of commodities which we need
and which Europe can produce"
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