The New York herald., 1922-10-26
WORLD BANKRUPTCY is FEARED BY PAISII|
PAISH SEES WORLD HEADED
FOR EARLY FINANCIAL RUIN

expend their productive power has been
one OF the great forces which had con-
tributed TO the extraordinary expan-
sion both in the foreign and home trade
of Great Britain. as well as 10 ths
wonderful expansion both in her own
wealth and in the wealth OF other
nations which has occurred I'm the long
period since she initiated this policy.
There is. indeed, no limit either TO
the foreign or home trade OF q nation
which Is willing TO sell Its own goods
70 the world either for cash or on
credit and at the same time willing
TO accept payment for her goods in the
productions of other countries and es-
pecially in the productions OF the nations
20 which credit Is granted.
THE realization of this fact in in
creasing measure has induced both
France and Germany to initiate Great
Britain in modern times, and to ingest
an ever increasing amount Of their ma
tional capital in other lands. Further
more. il has been the realization of the
advantages OF foreign investments In
promoting her export trade that has in
duced the United States of America in
recent years TO lend so freely not only
20 the Entente nations but to practi-
cally every nation that needed to bor-
row and possessed the requisite credit.
y,
many, nor France, nor the United States
has sufficiently recognized che advan-
tage OF expanding its imports as it's ex-
port trade, and its income from for
eign investments have expanded.
Lent to Build. Not Destroy.
"It is now necessary to state the
post war situation in order to ascer-
"a iv, aff
war disturbances and all that has hap
pened since the war, and also to dis
cover the policy that needs to be fol-
lowed If the nations are again to enjoy
that regular expansion OF both national
and foreign trade. as we'll as that steady
increase in national wellbeing which
occurred until the war so seriously in
jured the trade Of all countries by re-
ducing the productive power of the con-
tinental nations of Europe and the SELL
ing power of the rest of the world.
"The debt that was created between
nations prior to the war was all but a
minute part debt incurred in order to
create wealth. not to destroy it. Amerl-
cas- debt to Great Britain was incurred
mainly for the building of railroads, the
construction OF which immensely added
to Americas productive power. The
debt of Canada. South America. Aus
tralia, India and of other countries was
mainly created for a similar purpose
THE sums loaned by France and
Germany to Russia were spent mainly
on the building of the Russian railway
system, which greatly contributed TO
Russia's production Of foodstuffs AMI
to her wellbeing. There was in fact
wealth created against the debts. That
was productive power, and with 1t both
selling power and buying power, so that
the investment Of the capital created
new markets as we'll as new supplies
I'm the period Of eight years from
1914 to 1922 nearly as much interna-
tional debt had been created as in all
the past. The United States in this pc
riod sold goods against credit or Sc
curities of one kind or another to the
extent of some four thousand millions
sterling. while Great Britain granted
credit to the Entente and other nations
to the extent of not far short of three
thousand millions sterling. 1t is true
that Great Britain incurred large for
eign debt and sold securities in foreign
markets which must be reckoned as n
setoff to the credit she has granted.
nevertheless, the fact remains that
Great Britain has granted foreign credit
during the period of nearly three thou
sand millions sterling, while the United
States has granted credit or has bought
securities to the extent of some pounds
four thousand millions sterling since the
war began.
IF allowance be made for the resale
of American securities 10 America, Jap
anese securities to Japan, SC, 1t Is evil
dent that the amount of international
debt has been increased from about
pounds eight thousand millions sterling
prior to the war to some thirteen thou
sand millions at the present time. I'm
less this new debt had been created
neither the United States nor Great
Britain could have sold its products nor
realized the prices for them which they
did realize. The granting of this credit,
in fact, immensely increased the expo. .
trades of both the United States and OF
Great Britain during the period.