Evening star., 1933-04-16
LOAN CONTROL BOARD SEEN
PERIL TO LATIN RELATIONS
Governmental and Bankers Units Held
Improper-Independent Group
Declared Necessary.

mune to the influence Of the Wall
Street magnateS, whose financial op-
erations abroad they had to pass upon?
Who could deny the periB Of such
close interrelation between politics and
finance? Let us only mention two
typical and opposite examples.
Let us suppose that there Is Latin
American government which the United
States does not recognize, in view of
existing treaty provisions. Let us sup
pose that such government applies to
Wall Street for funds. Both supposi-
tions are perfectly possible. Even if
the question Of recognition did not come
up, If that government for any other
political reason did not have the SYM
pathy of the State Department. could
not this lack Of understanding between
the two influence the decision of the
State Departmental controlled" foreign
loan board? Would not the refusal of
such loan, upon advice of the State
Department, be the thing to be ex-
pected? In that case, would not the
Wall Street bankers be carrying out
the political designs of the White
House, whatever its policy toward the
particular Latin country might be at
the time?
That exemplifies the influence Of
politics on finance. Now, let us see
the opposite influence, that Of finance
on politics.
Let us suppose that certain financial
obligation contracted by a Latin Ameri-
the board controlled by the State De-
partment, were not properly met. That
is, let us suppose that Latin American
loan which the State Department had
officially Endorsed defaulted.
Would Use Marines.
The United States Government,
which had guaranteed the loan to the
American investors, would have to take
the necessary ster3" to insure its COL
lection. Such steps we all know. The
United States Marines would be con-
verted into debt-collectors for the
American bankers.
This prospect alone would suffice to
jeopardize the good name of Uncle Sam
in a continent where the Calvo clause,
the Drago doctrine and all the modern
theories condemning the forcible COL
lection of public debts are almost
gospel
The truth is that the State depart
ment-controlled loan board would place
the Latin American governments at the
mercy of the Washington authorities.
If this Is not Intervention, it comes
dangerouly near to being it.
It is clear that, if the solution ad-
vised by Senator johnson is going to
ALLEVIATE the good will of the Latin
Americans and duplicate the unfortu-
nate experiences of past years, all the
benefits which American investors may
derive from it should be passed up, un-
hesitatingly. The more SO at time
when the State Department is precisely
endeavoring to obliterate the memory OF
nd RI n
the minds of Latin Americans a differ
ent idea of the friendship disinterested-
ness and respect of the United States
toward them.
Publicity Seen as Need.
On the other hand, the uselessness of
foreign loan board controlled by the
bankers themselves, instead of by the
Government, is too obvious to need an
explanation.
The only way left, then, is the third
one: The establishment of private, in
dependent associations in harmony with
Senator JohnSon'S views, but without
Government control
These associations, made up Of promi-
nent economic experts, college profess
sors, and leading citizens-and. above
all. independent Of any political or
financial control-would engage in the
dissemination of information regarding
economic and political conditions IN
foregn countries where American capi-
tai has been loaned or Is about to be
loaned.
This alone-and full publicity regard
ing the loan negotiation-even if di-
rect and absolute control Of loans is not
possible safeguard the interest
of American inventors and avoid the
repetition in the future of financial and
political entanglements born of reckless
borrowing and reckless lending.
(Copyright, 1891