Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-04-16
BANKERS WATCH|NG|
SPANISH SITUATION
Investment Authority De-
cIares New Government Will
Meet National Debts.
BY JOHN. F. SINCLAIR.

Special Dispatch to The Star.
NEW YORK, April 16.-Of the re-
cent 100000 credit extended to
Spain by a group of European and
American bankers, j. P. Morgan handled
$38, 900. Naturally these bankers
are concerned about the attitude that
will be taken by the Provisional PreSi-
dent, Zamora, regarding the arrange
mentS made, since he heretofore has
opposed the credit on the grounds OF
unconstitutional procedure.
While members of the Morgan firm
, said today they had no comment to
make at this time it was pointed out
that the credit was made to the Bank
of Spain, which IS a continuing in
stitution and the central bank of the
country
In spite of the fact that President
Zamora opposed this credit because it
was not passed by the Spanish Parlia-
ment, then out of existence by royal de-
cree, it appears probable he will not
persist in this attitude now that the Re-
publicanS have assumed power The
credit might prove of immense benefit
to the new regime in stabilizing the Pc
seta and the political life of the people.
Believes Investments Safe.
DR.. Max Winkler, New York invest
ment banker, declares that the inSti-
tuition of republican government and
democratic rule will have a tonic effect
on the economic system of Spain, and
that not only are American investments
in that country quite safe, but that all
financial obligations undoubtedly will
be fully acknowledged by the new gov
eminent.
Mr.. Winkler sees an excellent field for
further participation in SPANS elab-
crate plans for public works.
In addition to the new credit, Spanish
loans already made in the United States
total nearly S31 100000. Besides, a
number OF American companies have
money invested there in various enter
pr1seS For instance, the sum of $50
OOO,OO0 has been invested by the Inter-
national Telephone & Telegraph Co.,
which has monopoly of the Spanish
telephone business.
The Spanish public works plan calls
Tor an expenditure of 6,700,000. 900
pesetas. The pes:ta is now worth 10
cents in United States currency
The revolution is won the King has
gone, the Republicans are in power.
Several weeks will be needed before any
true picture of SPANS economic and
financial condition can be surveyed In
the meantime, the world will observe a
watchful waiting policy
Herewith are the drastic recommended
tiOns of an expert committee of the
United States Chamber of Commerce,
which includes, among others. Fred w
sargent OF Chicago. president of the
Chicago & Northwestern Railroad. and
H. H. Bond of Boston, former Assistant
Secretary of the Treasury:
Quit paying the United States Gov
ernmsnt public debt and use the money
so Invested to reduce government oper-
ating expenses!
Reduce governmental activities TO
the bone!
Act with great slowness on any plan
to rush public works.
This really is an anti-Hoover plan.
The whole purpose is frankly to dis
courage the Government from levying
new corporate and business taxes. The
committee seems to feel that almost
any alternative is more accepts BILE than
such move; this attitude being clear
ly shown in its harsh treatment of the
public works project to relieve unem-
ployment.
The men forming this committee are
right in insisting upon strict govern.
mental economy, but it would be get
ting nearer the heart of the problem
to weigh the fiscal policy of the coun-
try in terms of money rather than of
taxes. 1t has become bromide TO
point out that there is plenty of money
in the country in the present depres-
sion, but that it is lying idly in bank
vaults. Mere reduction of Government
expenses, lodging of taxes by business,
will not thaw out those frozen funds
Something more than a negative policy,
such as is here suggested, is needed
10 start the wheels going again.
pubIfo NEXT Tncraaea
The recent swelling of the Federal
debt. especially in Short-term commit
mentS, after 10 years of regular re-
duction, again brings the whole subject
OF public Indebtedness into the spot
light.
Yet 50 per cent of the total expenses
for administering government in this
country has been incurred by local and
State governments. This is where the
citizens must look for debt reduction
since the debt of the Federal Govern
ment is largely hang over from the
nightmare of the World War Some
State and local governments are now
operating on fairly definite cash
and-carry" basis and have gone far 10
eliminate bonded Indebtedness. 1t
would be wrong to conclude. neverthe-
less, that this is always desirable, either
socially or financially.
While SO much of the public debt is
carried by the States, fully one-fourth
of IT is concentrated in two States.
Th@se are New York with bonded debt
Of S259,000,000 and North Carolina with
$162, coo 600.
The present cheap money market is
a temptation for States to float extern
sive bond issues with the assurance Of
ready takers, but in the long run this
policy not only adds TO the State tax
burden, but will deplete the market
Of funds necessary when business stages
q real comeback.
New Auto Registrations.
Over 100000 motor vehicles spun
along the highways Of the United States
in 1880, and their owners dug down
for s355,000,000 in registration fees, IL
censes, fines, operators permits, etc.
The gain in new registrations was
only 22,336, according to the Federal
Bureau of Public Roads, the smallest
on record in over decade. Previous
increases have always been between one
end two million. However. while pas.
senger car registrations decreased, mo.
tor trucks actually increased 3 PEI
cent, which makes truck manufacturer.
happy and railroad executives frown
The two automobile leaders of the
Union are New York and California
with over 1000 900 registered cars each
The latter State also showed the largeS
net gain in registration.
Copyright. 1881. by the North American
newspaper Alliancej
dist STORMS cAlIcE