Abilene weekly reflector., 1922-11-09
EUROPE'S DEBT AND
THE AMERICAN FARMER
by c. c. Iseley
q zee q 4 q q G Ae q

In the two previous papers W.
briefly pointed ont that the farmers
of Kansas depend on the markets o
Europe 10 utilize our large surplus
and that for Il number of years sale
Of this surplus must be aided by al
extension Of credit to Europe.
The first reaction many people
have when one says, Extend credi
to Europe" .Oh, those people arr
bankrupt" or "they owe us 10 bill
lion dollars now. How can we lent
them more?"
| Ten billion dollars is tremen'
dous sum. Yet the farmers of the
United States could have bought al
the notes covered by the 10 billion
allied debt out of their 1919 crops
| and still had more money left than
they received for their 1921 crop.
Look at 1t another way. II they
were so hOpelessly broke, why does
j. L. Morgan take time to go to Eur
ope and study plans to make a loan
to Germany, the worst off of any of
those countyies? He did not make
the loan, but he showed the condi-
| tions ON which a loan could he made.
Many New York bankers are study
ing the situation in Europe and
there must be something to 1t or they
| would not waste their time.
We should not get the impression
that nothing is being done along this
line but every time an investment
banker takes over foreign bon,!
issue he must get the kind Of bond
or security that he can recommend
and sell to people with money to in
vest. He deals in notes just as a
merchant deals in coffee or coal or
drygoods. Our investing public
knows something about Santa Fe
stock, or Sedgwick county road
bonds, but when securities of France,
or Germany, or Poland are offered
many questions naturally arise.
Everyone knows that conditions are
far from stable over there and that
almost anything can happen.
Take the case Of France. She
owes to England and to the United
States on the allied debt apprOxi-
mately 6 billion dollars. She has
an internal debt, that is what she
ewes to her own citizens, nearly 50
billion dollars. She has expended
nearly II billion dollars in rebuilding
the regions devastated by Germany.
Her external debt outside the sums
due England and the United States
are not large If conditions were
stabilized, If Germany had an estab-
lished government, If the threat OF a,
BClsheviK Russia did Not hang over
Europe, France could reduce her
army and do a number of things to
improve her credit. As it is Ger
many does not and says she cannot
pay any considerable sum on the
repaEa tionS due France. The closest
students of the situation sry II Cor
many cannot pay France then France
cannot pay the United States
Now suppose a New York bank
to buy American steel, oak ties, and
-four and meat for the crew to re-
build the line in northern France,
offers to secure for that road mil
lion dollars. He takes over the bonds
and offers them to American inves-
trs, maybe to you or to me. The
first objection he encounters is that
France is bankrupt, that she owes
the United States 3A billion aallars.
That is what most people with
money to lend would say. OR if
they do not say it they realize that
in way that 31a billion dollars is
a first mortgage held by Our govern
ment at Washington.
Our Representatives i'm Congress
are continually talking of collecting
this debt. of tying it to the soldiers
bonus, and so ON. They have passed
a law requiring payment in few
years and at high rate of interest
for that kind of obligation. In fact
politics controls the handling of these
Our congressman, feel
ng that they are trustees of the
peoples money, are rather insistent
about payment. No one knows just
what they will do next. Under sReh |
the New York banker
tnds great difficulty in placing these
french railway bonds, or any otherl
European securities in America. Il
But / have not made the picture
s bad as it is. Suppose the farm
RS cooperative elevator concerns
n Kansas, should ship a million
bushels of wheat to Galveston to
Ian Baker Grain Company. 1t lis
oadesl in a ship for export to Liver
ool. The london banker financing
he Liverpool miller or broker bor-
ows the money in New York for
hree months to handle the draft on
hat wheat cargo. After three
,onths he meets the note with a
uipment of gold or shipment of
OOds to some Philadelphia mer-
Bnt, or borrOws some more money. |,
e may do some of all three things.
papers repOrt that New :
Nk bankers have collected a mil
OH dollars in one month from Lon
IN. Immediately a lot Of newspa-
srs and a nRmber @f congressman q
y, If Bng1and can pay Wall i,
rect, why can't she pay her debts =
the Tnited HfAtes?~
Every such expressiep makes in
T. Il