New-York tribune., 1922-10-05

| er continued, 'sbut production by itself
is not enough She must find a market
| for her exports, and the problem thus
| becomes one of determining the po5st-
| BILE extension Of German export trade.
| Nor is this the end. Payment for her
| indispensable imports must be the first
charge against the proceeds of her
! foreign safes, and it is only the bal
ance, the exportable surplus, which rs
available for reparatious.
eve must not forget that other fac
| tors may contribute to a nations ex-
portable surplus Decides the balance of
exports over imports. Interest received
| from foreign Investments and pay
ments for external services, such as
| shipping. may be contributory factors.
! But, Mr.. McNenna noted, Germany had
! been stripped Of these resources, all
| the sources from which an eSportabie
surplus might have been drawn having
| been greatly impaired If not wholly de-
| stroyed
The amount of cash actually paid by
Germany, Mr. McKcnna pointed out,
was only S375 100000 yet with this
| comparatively small cash settlement,
of marks to foreigners, the mark had
| declined to less than one-seventieth OF
| its value when the obligation to pay
was imposed by the Versailles Treaty.
| He said that Germany during the last
three years had undoubtedly made eff
| forts to increase her external trade,
| but that an increase commensurate to
the amount fixed by the London ulti-
ratum would be out of the question
with Germany now confronted by com
petition of all other manufacturing
countries. Her efforts, he held, could
| only be successfully counterad by a
general lowering of the, standard Of
| life. N4ag
England Alone Able to Pay
MIR. McKenna applied d similar
general application to all debtor ma
tions.
england still owns sufficient for
eign securities" he said, "to cover her
debt to the United States two or three
times over. But neither France nor
Italy has similar reserves of wealth,
and | doubt whether either has suf-
! ticient to meet more than a trihine
part of their foreign debt"
| The exportable surplus of France
and Italy in the ordinary way of trade
was then taken up by Mr.. McKonna. He
called attention to the fact that
Frances debt to England had beer in
CURED in meeting her extraordinary
war demand for goods and at high
prices. Reversing the process, France
could pay hack England only by pro-
ducing goods and exporting them in
quantities far in excess of normal
trade demands and at no less high
prices. Conceivably the debt might be
rapidly cleared, the speaker conceded,
| it England should be at war and
France remain at peace. But the mere
endeavor by France to extend her for
elgn sales to the necessary degree in
time Of peace would disorganize the
trade of the world, he believed.
The whole subject requires ra-
tIonal reconsideration by the creditors, .
Mr., McKenna declared. f"Tbey must
keep steadily in view the immediate
effect of the payment of these debts on
the general trade of the world. The
creditor countries will obtain greater
advantage from trade prosperity, which
will ensure full employment in their
factories and workshops, than they can
ever receive from the precarious pay
ment of these debts.
Effects of Broken Down Credits
"ln the last two years we have had
experience to the effect upon foreign
trade of tumblfng exchanges and
broken down credit, and though the
consequences may be more serious in
England than in the United States
where foreign trade is comparativeIV
only small part of the total trade, they
are still grave enough in the latter
country also to warrant the fullest and
most careful considerations"
Mr McKcnna cited England's cxperi
ence in building UP and retaining her
foreign markets, for which it had
been necessary that every year Eng
land returned in loans more than she
received in interest, the balance of
/ the worlds indebtedness to her steadily
growing. This continuous growth had
been true of the aggregate, he said.
instance, nor did it necessarily follow
that it would always be true of loans
as whole. Nations occasionally were
able to make full repayment of capital.
as the United States had done. aided
by the unusual conditions provided bv
| the war.
The speaker explained his selection
! of subject as due to the difference in
! banking organization and practice be-
| tween England and the United States.
there being only thuty-nine banks
with $500 branches in Great Britain
and more than 10000 independent
| oahks mere. in England banks are
! operated as corporations while in the
United States, the only deposit bank
ing country in which depositors we're
protected, their operations we're
rigidly restricted. He emphasized the
fact that he gave only his personal
views and by the statement that he
felt free to discuss the situation only
if the fact that England was able and
prepared to pay her debt to the United
States Treasury was accepted as a
condition to what he had to say.