Evening star., 1925-06-01
i. S. FOREIGN LOAN
POLICY UNCHANGED
Official Intention to 0isCour-
age Bankers Aid to
Europe Secuted.
BY DAVID LAWRENCE.


not yet interfered with the f1otation
of any important loans by American
bankers to foreign powers. Nor is
there a fixed policy to discourage
loans that may be requested.
This in a nutshell. is the status of
the foreign loan question, notwith-
standing the many rumors, reports
and informal threats that have been
publishd in the last few months in
connection with the failure of allied
governments to make arrangements
for the funding of their war debts TO
the United States.
Ever since March 8. 1922, when the
Harding Hughes administration issued
statement calling upon all bankers
TO consult the Department of State
before making any foreign loans,
there has been a yoluminous cor
respondence with private bankers
and many informal conversations.
Departments Views Learned.
In practically every case the pro-
cedure has been for the State De
partment 10 submit the matter to the
Treasury Department and Department
of Commerce to learn if either or
those departments had any objection.
State Department to the bankers has
never been published, but it may be
said that the number of instances in
which loans have been discouraged
have been few and far between and
have usually related 10 circumstances
other than the delay of foreign
government to fund war debts.
Only in the case of small EURO
pean country did the Government
a
private loan, pointing out that the
country in question had not fulfilled
it's promise TO give the United States
equal opportunity in redistribution OF
the funds Of a previous loan.
Large Nations Get Loans.
None of the large European Coun-
tries has made any requests through
private bankers that have been dis
Coura ged This does not mean that
this step will never be taken. 1t does
mean. however, that before the United
States Government does go TO the
extreme of preventing a European
power from borrowing funds the
country in question will have had TO
pursue a policy. which it is incon-
ceivable here will ever be pursued,
namely refuse to make any arrange
ment or serious effort TO arrange for
funding of existing debts.
Broadly speaking. the American
Government has told private bankers
that it is the desire of the United
States " see borrowing countries
balance their budgets and tax their
people TO make up deficits rather
than seek funds here, but that ma
tionS which are making real efforts in
that direction could he and should
be helped.
The talk of stopping foreign loans
is therefore largely reminder of
what might happen il European gov
ernments neglected their manifest OBJ
legations TO the United States, and is
at present aimed more at the smaller
countries than at the larger ones
No Priority Granted.
One point is constantly emphasized
namely. that the United States reCog-
nizes no priority TO other countries
Thus if funds are available to pay
Great Britain and America is given no
payment. ii will he felt here that the
United States has been neglected and
that requests for loans through pri-
vate bankers must necessarily be sub
iect to the most serious consideration
in the light of those circumstances.
All in all. the private bankers of
America are cooperating with the
Government mere anu are ioILoNIilS
the advice given by the Department
of state. In u few instances, about
two years ago, where the procedure
was not known to some Of the smaller
banking firms, the Department of
State was not consulted, but now the
policy of the department is fully
known and recognized. There is no
law compelling bankers to consult the
Government here or to heed its advice,
but they are doing so for patriotic rea-
sons and because an objection voiced
by the Government might in turn dis
courage prospective investors.