Evening star., 1922-05-04
BY FRANK A. VANDERBILT.


GENOA, May 1.-THE idea of an
entente among European central
banks, formulated at the plenary ses-
sion yesterday. is happy dream. 1t
is what Europe ought to have.
If Europe could apply the principles
of our own federal reserve system, so
there would be cooperative relations
between the several central banks of
Europe, an impressive forward step
would be taken in the way Of team
play, which is essential for Europe.
The ink was not dry on the first
draft of this plan for central con-
ference before differences Of opinion
developed. There. are no two central
banks that regard themselves equally
solvent, and, as none of them Is
freely redeeming in gold, perhaps 1t
may be said none of them is quite
solvent, speaking i'm terms of gold
redemption.
Sir Worthington Evans pointed out
that there can be no stabil1zatlon
without the aid of the United States.
He does not expect the cooperation
among, central banks will be en-
bodied in a rigid agreement. That
is against the traditions and methods
of banks.
Exchange Of Ideas.
What is contemplated is a oontin-
uous exchange of ideas. which Will
enable the central banks to conduct
edge of the policy of their associates.
Then, all will be united for common
stabiliZation.
This sounds well, but It means that
Americas discount policy henceforth
must be sha ped not alone on domestic
n = <hxa
demands of the European situation.
That is indicative of a broadening of
vision in the American banking ad-
ministration that will be difficult to
obtain. .
America has too much gold. It is a
would be wise to devote a portion of
this toward helping Europe back to
gold standard.
Must Not Involve q. 8. Banks.
In doing this, however, we must not
involve the federal reserve system In
foreign entanglements. r believe the
proper road to effective American CO.
operation in establishing gold
standard in Europe lies in the crea-
federal reserve system and not COM
mitment Of the custodian OF the re-
serves of more than 10000 American
banks to a policy shaped too largely
by European requirements.
This, perhaps. is not the moment to
develop this idea, but hope to see
it accomplished before the American
banking system is too much entangled
in the European situation.
Consortium Idea Good.
The idea of an international con-
sortium is good, but its success de-
pends on the management. No way
is better than having a permanent
British executive and secretariat.
Some think the size of the effort is
not great enough to make it impor
tant: others fear it is dangerous
scheme of capitalistic exploitation. To
me it seems promising. not dan
gerouS, experiment.
There is desire for American par
ticipation. The chances of profit do
not seem brilliant, for it Is consid-
cred necessary that the governments
guarantee investors.
Views Already Conflict.
Sir Worthington Evans, presenting
the finance resolution at the plenary
session. seemed to think it second
only in importance to the creation.
He compared the "Pious principles
to the institutes of Justinian, declar-
ing them new financial code.
Other speakers took less exalted
view. NJ. Picard of France admitted
wand. The conference of banks of
issue in London must have a broader
| basis he said, adding that France
| would not place an International con-
! sortium above other authorizations.
! Signor Schanzer touched on the
He called for general economy and
/ simple living. Signor Schanzer told
how Italy courageously increased
taxes eight times before the war. re-