Evening star., 1933-09-06
CUBA INTERVENTION
NOT DES|REDBY us.
Jefferson Caffery, on Radio
Forum, Explains Amer
lean Policy.
Continued From Eighth Page.)


foreign policy. I should like to speak
about the status of American loans to
the various Latin American republics.
This is a matter which affects many
of you. During the period l920-1932
over 81 $50 100000 of Latin American
securities were fioated in the Ameri
can market Today 1892 600, 600. or
66 per cent are in either complete or
partial default.
At that time you had access to little
accurate and unbiased data on which
to base an opinion. A few students
of Latin American fiscal problems were
aware of the dangers inherent in many
loans, but were unable to get hear
ing for their views. The bankers were
not interested in dire forebodings. nor
did newspapers and financial journals
like to print peSSimistic news. There
were many others in the business world
also to blame: it finally became mat
ter of mass psychology; the investing
public lost its head; it was what the
Cubans called "the dance Of the mil
lions"
Facts of Importance were CLOSED
over. Very few voices called attention
to the continuous increase in funded
Indebtedness, yet the finances of prac-
tically every government Illustrated this
fact Very few voices were raised
against the persistent government def
citS. Even during the height of the
speculative era, many countries showed
large deficits, which they hoped to
cover out of the returns from new
loans. There was considerable loose
talk about the productivity of loans,
but little substaptiating data was fur
nished. For instance, is a loan to
finance railway construction productive
when the cost of construction is SO
great. the cost of maintenance so high
and the traffic so low that the charges
for traffic make it possible for the
donkey to compete with the railroad
in carrying the products of the area?
Again. / am not criticiZing or appor-
tioning blame: perhaps in fact every
one was little to blame; it was merely
symptomatic of the times, of that
'dance of the millions"
The security act of 1888 provides ma
chinery that will fill this void Hence
forth, before a foreign loan may be
1oated in this country the issuing house
must file with the Federal Trade Com
mission sufficient data to enable a con-
cluSion to be reached as to the buSi-
ness merits of every loan This data
will be open to public inspection. 1t
will cover such vital matters as the
purposes to which the loan is to be
devoted, the status of existing indebted
ness, the default record of the bor-
rover, the details of government rev.
enues and expenditures and the amount
of commissions paid. This last item
Is especially important Unfair prac-
ticeS will be practically impossible in
this field in the future-that is un-
less banking or issuing house desires
IN fana tho cnndpy,, q af IN
opinion.
Good Neighbor" Move.
The security act is, in the last
analysis, an instrument of the good
neighbor" policy. 1t enables the bor-
rover to obtain funds for legitimate
purposes and the lender to expect a
steady and regular return from the in
Vestment. Credit is, after all. the basis
upon which modern economy rests.
Credit. properly employed, is productive
of increased happiness; credit, i'm
properly employed, only engenders bad
feeling
Many problems cannot be solved ef-
fectlVely, however, by unilateral action
These require the united cooperation
of all countries. The opportunity for
such action is presented by the con-
ference to be held next December at
Montevideo, the capital of Uruguay. of
the 81 republics of this hemisphere.
This conference will be the seventh
of a series, the first having been held
In 1889 in Washington, under the in
itiative of Secretary of State Blaine.
Since that time they have been held
periodically and have been successful
in bringing about agreement in many
fields. Since the last conference at
Havana, in 1928. there have arisen a
series of unforeseen and vexatious
problems to trouble the world Some
OF these can be tackled only by the
individual country which has its own
peculiar problems and knows best of
all the methods for attacking and con-
quering them. The United States. for
instance. has embarked upon a revou-
tlonary program of industrial and agri-
cultural rehabilitation to solve the
problems of overproduction and unem-
ployment
There are other problems. however.
OF such nature that no one country
alone can cope with them. Despite