Great Falls tribune. [volume] (Great Falls, Mont.) 1921-current, 1922-08-26
FOREIGN INVESTMENTS.
n aANY foreign governments and

dVl cities in foreign lands have
been floating bond issues in the
United States since the war. Hun
dreds of millions of dollars, and
even billions have been freely in
vested in these foreign securities
on account of the high rate of in
terest they pay. That rate is often
as high as eight per cent while u
own government bonds will only
paw the investor about half that
amount. Foreign industrial secur-
tiles, consisting of stocks and bonds
often pay an ever higher rate OF
interest. There is a disposition
among leading financial journals in
this country to encourage such tor
eign investments as tending to re-
store the purchasing power in this
country of foreign governments.
but we think that may easily be ov-
erdone.
A recent issue of the Literary
Digest in its financial column says:
Fluctuations of as much as ten
points within two weeks in what
are generally considered the safest
of European bonds have brought
sharply into focus the question OF
the actual security of foreign bonds
in general. Glenn Griswold, writ
ing in the Chicago Journal of Com
merce, tells us. however, that there
now exists a subtle current of prop
aganda against the sale of Euro
pean government bonds. Where
will your bond be when European
values get back to norrnal?' is one
of the appeals against buying for
eign bonds. AS Mr.. Griswold ex-
plains:
1.-The plea would be good if we
were using European currencies to
buy European commodities, realty,
goods or wares of any kind. But
we are buying with American dol
lars. Interest and principal are
usually payable in those dollars.
1.-the thing for the investor to
determine in buying a European
government bond is whether the
nation seeking the loan is threaten
ed with or liable to dissolution and
reputation. If the answer is neg
ative, the cost of living, deprecia-
ton of currency and misbalance of
budgets may be considered as prob
lens of the day, certain of ulti-
mate solution and having but little
bearing on the security of the loan.
External debts, of the sort we have
been accepting, rank ahead of in
ternal obligations, will survive ev-
en- though arbitrary reduction or
reputation of native obligations
are unavoidable. They will survive
unless there be such collapses as
those of the kingdom of France and
the czarist regime of Russia.
1.-THE menac of initiation in Eu-
rope, whatever its meaning to us
may be, is waning. 1t is true that
the lost of living in the principal
countries has taken a slight upturn
In the past two or three months,
but the same thing has happened
here. It is merely a temporary
turn, a secondary initiation if you
want to call 1t that. Everyone
knows that commodity prices are
far higher today than they will be
five years hence, that there is a
long and gradual process of adjust
ment toward normal ahead of US,
but the current upturn is a reflec-
ton of renewed business activity,
a symptom not to be deplored.
Occasionally a government loan
suspends payments and gives grief
to investors, but far between are
those that are not eventually col
lected. America owes it to herself
to make what investments she can
safely abroad, and those who mark
all foreign loans dangerous are do
ing a disservice to their country"
We do not know whether there
Is any subtle propaganda" against
foreign investments, as this finan-
cial writer believes to be the case,
or not, but we do think that any
person thinking of investing money
in foreign securities would do well
to ask themselves, just how they
are going to get their principal
back. Is the party that owes the
money going to be able to ship
gold or buy gold in this country
to pay these debts3 If not, can
they get goods into this market
and sell them in order to pay in
spite of u high tariff? Moreover
it is true now as always that high
interest rates and good security