The Washington times., 1923-11-07
FOREIGN loans
ARE WATCHED
BY j. s.
Dollar Diplomacy, Banned BY
Bryan, Once Again Appears
in Washington.
BY MERRYLE s. RUKEYSER,
(Gopyrighted. 1898, By Star Coz ms. ano
!. Distributed BY Cosmopolitan

NEWS SeEVlccsl
NEW YORK, Nov. 7.-Dollar q.
plomacy, which was denounced ana
discontinued by William jennings
Bryan when he was Secretary q
State, has returned to good seanufi
Ing in Washington.
Charles q. Hughes, the prssons
Secretary, keeps currently lnLOtIllr
ed regarding the foreign loan aC-
tivities of American bankers. alnI a.
America has become g great crsuL
tor or lending nation, the policy mas
become increasingly important.
n connection with the recen!
loan to San Salvador, the fnanciaI
district heard that there had peeH
e change in the attitude or the STAG
Department, which, 1t was said, was
to more actively sponsor desiraDie
foreign financing.
THE exact position Of the admin
istration has been somewhat OF 2
mystery to the public. - resu ns
of inquiries which have been mauo
in washington, / am able 70 SAL
exactly the attitude OF the StAse
Department, =
Politics Involved.
The Department Of State is not
concerned with the investLnent STATUS
Of & loan, but with Its poEtlcal Ss-
poets. It Is opposed, for exampie.:
to loans to finance the purchase %
huge ornaments or for other nil
taristic purposes. 1t favors loans 1Or
constructive economic wealth pro.
ducfng detectives. It no doubt wouiO
indicate opposition to loans mace
for any objects inconsistent with the
major diplomatic purposes OF tnas
country.
Accordingly. for more than two
wears the state Department has
indicated to private bankers q desire
to be kept informed regarding nego-
tiations for foreign governmena -
nancing. The department. expresses
no affirmative approval, but II there
is any objection, it notifies the bank
ers promptly.
The state Department exercises
this function by means OF the volun-
tary cooperation of bankers, as no
formal law gives it the right to re-
auire submission Of these data. There
have been In the past q few instances
of lack Of a willingness on the part
of bankers to play ball, but better
cooperation is now being received.
u. s. Defends Policy.
The Government defends its new
policy of friendly interest in the
foreign activities OF American bank
ers or investors by the following
line OF reasoning: The American
citizen when in trouble with 9
foreign government, which 1t, or
course, cannot sue in the courts,
expects the State Department to
make Representations for him, not
through military force, but through
diplomatic channels.
Unless our Government does this,
1t Is argued, American citizens will
be placed at q disadvantage as com.
pared with the nationals from other
countries who are supported by
their governments. Hence, the State
Department, feeling that 1t viii be
called upon In case OF difficulties,
feels that it should be privy to ar
rangements with foreign goyern-
ments from their very inception.
The State Department wants to be
able to express objections to prac-
tees and arrangements which 1t
deems proper, instead of learning OF
them years later. perhaps when IT
is too late to take preventive action.
In connection with the loan to
San Salvador, 1t was charged in
some quarters that the State De-
partment had virtually made a
secret treaty and had committed the
American people to a policy OF
economic Imperialism, with its at
tendant risks, without any publicity.
This is a misleading statement.
as the agreement was negotiated
between the government Of Salvador
and the representatives of the
bankers concerned" 1t was explain
ed at the State Department. ut is
In no sense a treaty"