Evening star., 1933-06-15
Loan to China for Purchase
OF Farm Products Debated

Technically, the Reconstruction Finance
Corporation is making the loan, but the
accent is on the wheat fields and the
cotton patches. The surplusage In those
two areas will be reduced by those i'm
portant figures. The pity Is that the
loan Is not more nearly the size Of the
experimental fund Of the late lamented
Federal Farm Board. The incident is
another illustration Of the real cause of
the depression. Supply and demand
cannot retain contact. II everybody in
the world could obtain sufficient cotton
for clothing and sufficient wheat for
bread, there would be no. depression.
China alone could use our entire supply
Of both-n the Chinese could earn sufi1-
cient money to become consumers"
It is assumed by the San Antonio
Express that "the flour will be used
largely to relieve famine conditions in
Shensi Province, in the Upper Yellow
River basin, where, according to the
China Famine Relief Committee, at
least two million people are eating
many houses have been torn down for
material to be sold for food" The
Port Huron Times Herald sees in the
deal "a good trade" and feels that "the
present Chinese government Is gain
ing strength and stability with every
year it remains in power" The Abilene
Reporter states: "The new loan was
negotiated by T. v. Soong, the dynamic
minister Of finance of the Chinese Re-
public. Under It. w. China is one Of
the few nations of the world to present
get the money, and his word is good in
financial circles around the earth"
1.-THE agreement indicates that China
Is paying back other loans and is con-
sidered a good risk" according to the
Houston Chronicle, which also points
out that "the Chinese food supplies of
late years have been severely depleted
by interior floods" The Lincoln State
Journal. however, voices the judgment:
"China's capacity for absorbing Ameri-
can wheat seems to be limited only by
its capacity for borrowing money with
which to purchase grain. China would
be very good customer if she had any
money. As it Is, the United States has
to make loan every time it sells
China some wheat. That is all right
as an emergency measure, but 1t can't
60 on forever"
The Columbia Record observes:
There is a clear analogy between the
loan and the American war loans, also
used to the mutual advantage Of the
United States and European countries
in purchasing American commodities
and tending to contribute to allied sue
cess in the World War"
"One wonders" suggests the Hartford
Times, ''how China is to pay back the
$50 900 900. VIII it be in silver? That
Is China's medium Of exchange and re-
cent legislation by Congress has given
the President authority to consider
silver as q possible form Of foreign pay
ment on debt accounts. The point is to
be observed that loaning money to a
debtor nation In order that It may prr-
Of cotton and wheat Is 4 sensible
transaction only II repayment Of the
debt Is reasonable prospect. Other
wise. the deal may turn out to be largely
or wholly one-sided There would ap-
pear to be enough of uncertainty in the
present instance as to place the trans
action in the class with horse-racing-
interesting. but not necessarily profit