The West Virginian. [volume] (Fairmont, W. Va.) 1914-1974, 1922-08-16
COMMISSION OF
CREDITORS FOR
EUROPE URGED
Noted Economist Suggests
Novel Plan for Bankrupt
Foreign Nations

NEW YORK, Aug. 16.-What
bankrupt continental Europe2
A new and novel answer to the
question, comparing the world sit
uation to that of an individual deb
tor, whose affairs are taken over
by e creditors committee, has
been given by DR.. B. NJ. Anderson,
Jr., economist of the Chase Nation
al Bank. ~
Europe's financial problem is one
OF the chief topics before the In
stitute of Politics, now in session
at Williamstown, Mass, and Doc
tor Anderson is one OF the four
chairmen of its Conference on En-
ropean Rehabilitation, along with
Paul NJ. Warburg, David NJ. Hous-
ton and Paul D. Cravath- He
spoke at the opening Of the con.
ference and will preside at the two
final sessions.
Doctor Anderson's outline of his
plan follows:
During the crisis through which
we have just passed, we have per
fected the institution of the credi-
tors committee as substitute fol
the drastic processes Of the bank
ruptcy court.
The creditors of an embarrassed
debtor get together; they work out
a plan by which his affairs can be
Strengthened out
This plan necessarily involves
giving him additional time to pay
his debts. It sometimes requires
that the creditors provide new
working capital 1t sometimes in
wolves scaling down his debts.
1t involves, on the other hand,
drastic reforms in the manage
ment of his business. He is OBJ
liged to eliminate eXtravagances
deinefficiency, to reduce salaries
and to stop paying dividends.
The object of the arrangement
is to leave his business going
concern, in which assets exceed
liabilities, and income exceeds out
go.
By this plan both creditors and
debtor are benefited. The debtor
continues to live as a business man
with hope for the future and the
creditors get more money out of
the debtor than they could possibly
get in any other way.
international Credits Parallel
Great Britain and the United
States. sitting as creditors com
mittee for continental Europe,
might make this proposal.
ONE: Contin entail Europe is to
institute the following essential re-
forms:
(a) Public finances are to be
Strengthened out by drastic cur
tai1ment of expenditures, including
military expenditures, and by dras-
tic increase in taxation. Floating
debts should be funded into long
term issues.
(b) The huctuating, irredeem-
able paper money of continental
Europe, which is the most dem
oralizing single influence affecting
business and production in Eu-
rope should be restored to a gold
basis by the resumption of actual
gold payments.
Since it is obviously impossible
for continental belligereuts to re-
sumo gold payments at the pre-
war PARTIES, new and much low
er gold pars should be establish
ed at which resumption of specie
and certainly maintained. In the
case of Germany this might we'll
mean resumption on the basis of
90 cents per 100 marks.
Co There must be an econom-
ic settlement of the German re-
paration question. This involves
a great reduction in the total
amount demanded. "a total mora
forum on payments for two or
three years, and a fixed gradually
ascending scale of payments for
subsequent years. to be deter
mined and announced now SO
there may be no future uncertain
ty regarding Preparations.
td) The elimination OF the
numerous artificial trade barriers
which different countries of Eu-
rope. fearful of imports from one
another, have established.
Cancellation Considered.
In consideration OF these re-
forms and only in consideration
of these reforms. the governme nts
of Great Britain and the United
States ought to be willing to can
eel the debts of their continental
allies to them.
This does not involve the can
collation. of the British debt to
the United States government. In
addition the bankers of the United
States, Great Britain, and to an
extent Japan, doubtless would be
ready to undertake to place large
blocks of new European .securi-
ties with Am erican, British and
Japanese investors, in considera-
ton Of these reforms.
"A The use sto which the proceeds
Of new loans are placed, however,
should remain subject to the con-
troll of the lenders. Europe has
already had from the United
States since the armistice some
things like S7,000,0O0,000, when
both longtime advances and open
account credits are considered
more, than enough to have ac-