Evening star., 1927-05-02
HOOVER WARNING
. ON UNPRODUCT|VE
LOANS DELIVERED
Pan-American Conference
Hears New Call for World
Sterilization.
SECRETARY DENOUNCES
MILITARY BORROWING
Reminds Delegates Latin Republics
Must Look to United States
for Credit Facilities.

secretary OF commerce IIUONE1
sounded a new call for world stabiliza-
ton today in addressing the opening
session Of the third Pan-American
Commercial Conference by solemnly
warning against further international
loans except for productive purposes.
In vigorous language, Mr.. Hoover
denounced the policy Of nations bor-
rowing money for military purposes,
balancing Of budgets and other un-
economic measures that tend to re-
tard natural development and to keep
down the standards of living.
Falls With Hush.
The significance of Mr.. Hoover's
condemnation of such policies Of bor-
rowing for productive purposes
fell with a hush on the delegates of
the 81 Pan-American republics assem-
bled in the Hall of the Americas. Mr..
Hoover a little earlier had reminded
the Latin American delegates that it
is to the United States to which they
must look largely for future loans.
This point was emphasized when
the Commerce Secretary declared that
during the last eight years Latin
American countries had been able to
obtain from Europe loans amounting
to only 100000, 900. Contrasting the
situation of the United States as the
center of world finance of the Western
Hemisphere, Mr.. Hoover said this
country had been able to supply more
than $780, 900, 900 in capital to its
sister republics.
Secretary Stresses Need.
Stressing the need of halting the
tendency of foreign loans, Mr.. Hoover
declared:
mo nation should itself, or permit
its citizens, to borrow money from for
eign countries, and no nation should
allow it's citizens to loan to foreign
countries except for productive pur-
poses
Secretary of State kellogg as chair
man eX officio of the governing board
of the Pan-American Union and DIR.
Enrique Ilaya, Minister from Co
lombia, as vice chairman, preceded
Mr.. Hoover in giving the. addresses of
welcome to the conference. They ap-
pealed for unity of the Americas and
stressed the need of furthering CO.
operative policy.
Refers to Credits.
Referring to the question OF credits,
Mr.. Hoover predicted that each Amer.
ican State will in turn at some time
begin to produce that surplus which
will, when converted into capital. soon
relieve it of the necessity of external
borrowing. There could be no greater
step taken in the prevention of war
itself, Mr.. Hoover said, than the re-
o.. L.
productive purposes.
''Out of the wealth and the higher
standards of living created from en-
terprise itself must come the ability
to repay the capital together with the
net gain to the borrowing country"
Mr.. Hoover said. ANY other course
of action creates obligations impossi-
bic Of 'epayment except by direct
subtrac ion from the standards of
living Of the borrowing country and
the impoverishment of their people.
Number of Blessings.
"In fact, if this principle could be
between the nations of the
world, that is, if nations would refuse
to allow the lending of money for the
balancing Of budgets for purposes of
equipment for war purposes.
or even that type of public works
which do not bring some direct or
indirect productive return, a great
of blessings would follow to
the entire world
This declaration was received by a
round of applause from the more than
400 delegates.
There could be no question as to
the ability to repay" Mr.. Hoover con
tinued. with this increasing secur-
ity, capital would become steadily
cheaper. The dangers to national and
independence in attempts
Of the lender to collect his defaulted
debt would be avoided; there would be
definite increase in the standard of
living and the comfort and prosperity
of the borrower.
Prevention of War.
There could he no greater step
taken in the prevention of war itself"
he declared. II do not propose that
these are matters than can be regu-
lated by law.
'They are matters that can be regu-
lated solely by the commercial and
financial sentiments of each of our
countries, and if this body may be
able to develop the firm conviction,
TO develop the understanding that the
financial transaction between the cit
izens of nations must be built upon
the primary foundation that money
transferred is for reproductive pur-
poses, it will have contributed to the
future Of the Western Hemisphere in
a degree seldom opened to confer
ence of this character.
When Secretary Hoover made his
appearance, having come specially to
attend the conference from the zone
of the Mississippi flood area, he was
given a rousing welcome by the dele
gates. He was introduced by Lewis
f. Pierson, newly elected chairman of
the conference. as a doctor to human
itY who has Just returned from an.
other humanitarian mission.
Enraipn Trade Gsrnmfh