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New-York tribune. [volume] (New York [N.Y.]) 1866-1924, October 06, 1922, Image 5

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jfcKenna Says
[eolation Idea
Does Not Work
r ?, Will Learn, as Britain
n?d, He Predicts, That It
?g Not Compatible With
tForld - Wide Interests
praises Banking System
renditions Not Yet Ripe for
D?finit?" Funding of Debt
to America, He Declares
rjf that the United States would
by experience, as England al
*_!?>? H?* done'thst * policy of "sPlen
- ???stion" doesn't work was ex
?__rf fcy *hc Right Hon- Regi"
' .McR??na, chairman of the London
?il * Midland Bank, Ltd., in an am
,'Ltion 0f his views on the interna
J" I ?itoation given in an interview
?5 ?porters yesterday at tho head
fl.?rtei? of t*e American Bankers* As
weiatiMi convention.
Mr McKenna, who spoke warmly of
the reception accorded him by Amer?
ar, banker? and in apprec3ation of
the opportunity ot excnaiitfng views
with tbem, *** subjected to a rapid
) ha of questions covering a wide range
1 __ topics, all o? *hich he answered
Jlth the expresse? understanding
that nothing that he said was to be
.?-.trued ?? criticizing or censuring
?*. Mlieies o'the American Executive,
TfW*?? or of the American people.
Without reserve and talking stnctly as
a oataide observer, he gave hia opin?
ions ot American banking, of the re?
cently enacted tariff legislation in re
i.tlon to international trade, of the fi?
nancial situation here, and of the pros
Mct* for debt funding, and explained
h neater detail the manner of Eng?
land'? meeting its debt to the United
States and the position respecting Ger?
man reparations.
Impressed by Convention
Preliminary to the general question?
ing of Mr. McKenna he said:
"There is just one thing that T should
like to ?ay, end that is how tremen
rjouily I have been impressed by tho
immense success of this convention.
There are thousands of United States
bank? represented here by a class of
men who, if 1 may say it without pre
lumption, are a credit to the country
The United States, like all other coun?
tries, had to go through a very trying
time in the reconstruction period.
Taking all circumstances together, this
vu for the banks probably more try?
ing and difficult than they had during
th? war. The United States banks
time through it with great success.
"If I may hajsard an opinion, the
eittbliehment of the Federal Reserve
ij/item-played no small share in en?
abling the banks to establish sound
credit and a financial position which is
? eecure as at any time in the history
o? American finance. I admire particu
plirly the public spirit of the great
American bankers which has enabled
them, even at times at a loss to them
?lwa, to face difficult conditions in
tu public interest. The convention
hi*given us? 1 mean theoutside bauk
i ert-an opportunity of hearing and
I teiiing of something, of-the -work of
, American, banks."
| Mr.McKenna said, in response to an
inquiry, tbat he doubted if conditions
?me. jet ripe for definite funding of
th? Britiih debt to the United States
'.obtained upon.
Broader Powers Desirable
Tiere arc still some preliminary
cf'Jcn.'tie? to be overcome, arising out
? j? tie limitations imposed by act of
Congress on the powers of the Ameri?
to commission,'*^ said Mr. McKenna.
"It may be noted that the British Par
?iiaent placed no such limits on the
j?"t8 tne Brit*9?? commissioners,
ioe here in November. There is no
jaeation that if both commissions pos
sessed plenary powers a quick decision i
would be expedited."
In explanation of Great Britain's
ability to pay Mr. MeKenn? said:
"Ihc interest dn the foreign securi?
ties held in England, coming from all
countries in the worM, gives England
the power to exchange foreign curren?
cies for dollars. This Interest, to put
it in another way. is tantamount to an
exportable surplus. Various estimates
have been made of the amount of these
holdings, but I feel certain they are
not less than ?2.000,000,000 and not
more than ?3,000,000,000."
Mobilization of these securities by the
government, as during the war, Mr.
McKcnna said, was not necessary to
make the dollars realized on the in?
terest received by British citizens
available to the government. In effect,
England was always in a position to
obtain dollars in the foreign exchange
market, the exportable surplus arising
from her foreign holdings enabling hei
to draw upon the productive power of
other nations. Mr. McKenna, in com?
menting upon the recent movement ol
gold from England for the approach
ing interest payment, 6aid that pay
ments on the debt proqably would in
variably be made gold, which would b<
obtained by British exports to gold
producing countries.
German Payments Limited
"A large exportable surplus is onl;
obtainable when a nation gives credit,
said Mr. McKenna, "If Germany is al
ways to sell for cash her whole sur
plus production, she cannot build u
a large surplus of this kind. That i
why I am convinced that, while Ger
many after an interval can pay some
thing, that amount will not be large.
Asked as to the outlook for an Amei
ican loan to Germany, Mr. McKenn
declared this could hardly come befoT
stablization of the mark had been ne
"If Germany gets a moratorium Ion
enough to stabilize the mark," said th
former British Chancellor of the Ej
chequer, "and if Germany pays to th
Raparations Commission the foreiq
balances she now owns, she wi
require a foreign loan to enab!
her to finance her external trade. Ui
der these conditions her credit will I
good and she should be able to obta!
sufficient loans on an ordinary eon
mercial basis to enable her to finan?
her foreign trade."
Mr. McKenna was unwilling to gi<
an opinion as to whether the repar
tions problem would be settled at tl
approaching? conference abroad, b
said that its ultimate settlement <
a rational basis was assured.
Regarding the American attitu?
toward treatment of international i
debtedness, Mr. McKenna said that 1
had observed a tremendous change
public opinion here as reported to hi
by the bankers and as judged by ti
tone of press comment. As to the d
sirability, suggested by Fred I. Kei
chairman of the commission on cos
merce and marine, that America shou
be represented officially on the Repar
tion Commission, he said:
"I feel very strongly that the Briti
want the United States to take an o
in the boat. The nations of the woi
face a pretty difficult task. I am r
censuring the present American poll
because it is a policy that my o1*
country endeavored to adopt. 1
called it 'splendid isolation,' and foi
time after the war it was popul
Splendid isolation is a dream, as vi
quickly be discovered when it /is <
served how unwilling the country <
joying splendid isolation is to be
"America has interests all over 1
world, her citizens are everywhe
ehe has considerable shipping and
very large foreign trade. She has
sponsibilities as well as interests,
believe her experience will be just J
same as ours in England, that is, t'
the policy of splendid isolation doei
work." .
A request for the London bank?
views on the American tariff brou?
about a somewhat more cautious
sponso than to other questions, coup
with the statement that he did not
sire to be interpreted as saying a
thing that might be controverse
"The Immediate effect of the tari
Mr. McKenna said, "will probably b<
reduce considerably the 3mports of
United States, with a correspond
reaction on exports. To some exi
this effect should be mitigated b
rise in prices here, enabling compet
countries to leap the barrier."
Mr. McKenna said that he was
?Makers of genuine cAustralian Kangaroo
Boots and Shoes for men and it/omen
Lord Chesterfield said?
In his famous "Letters to His Son"?"A
gendeman should be most particular over
his linen and his shoes."
Edwin Clapp Shoes are not only a mark of the
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same token, they distinguish the lady, too.
For sixty-nine years Edwin Clapp Shoes have been
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and care. They are ?extraordinary shoes, out-of
the-common shoes, in wear, comfort, and shape
Edwin Clapp Shoes ?are acknowledged (?even by other
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most reasonable in price for what they give in the
pleasure and profit of wearing them.
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146 Fulton St., near Broadway
6 East 42nd St., 3 doors from 5th Are.
Bankers Ask More Power for
Debt Funding Commission
I By Merryle Stanley Rukeyaer I
Inter-AUied debts, came up again
yesterday as the most interesting of
the general topics discussed: at the
American Bankers Association. The
delegates translated their feeling that
some adjustment ought to be made in?
to a resolution asking Congress to
grant to the "Debt Funding Commis
sion such further powers as will en?
able it to negotiate more effectively
with the foreign nations now debtors
of the United States." Expressed less
diplomatically this involves a request
that Congress grant the commission
discretionary authority to make con?
cessions. Under the present law the
debt commission's powers are carefully
circumscribed, and it has little right
to do more than ask the debtor nations
to pay up under specified terms. The
conversations with France have, so far
as known, yielded no results. The ne?
gotiations with the British, who Reg?
inald McKenna, former Chancellor of
the Exchequer, asserts, can and will
pay, are scheduled to begin next month,
Repercussions of Mr. McKenna's
lucid speech were heard in every de?
partment of the association yesterday
The majority of the delegates were
lavish in their praise of his presen
tation. One criticism dealt with th?
argument of the British financier re?
garding the effect of debt collectlor
on the creditor nations, which mighl
be swamped with merchandise. Sir
McKenna took the position that ful
payment of the debt or of reparation;
would involve exceptional consumptioi
of goods, such as has only been exper
ienced under the high tension of wa;
needs, by customers of the debto:
countries. To this view, there wa
some dissent on the part of those wh?
hold that under a condition of restore?
confidence and productivity there i
no telling how much the consumptiv
capacity of nations would be enhanced
Be that as it may, the general opinio:
was that Mr. McKenna7s address wa
the ablest presented at the forty
eighth annual convention, which close
? ? *
Mr. McKenna amplified his views 1:
an interview with newspaper reporter
yesterday morning. Re rhade a goo
impression by hin willingness to repl
direetiy and without hesitation to al
questions asked. 1
a a ?
In connection with the growing feel
ing among bankers that America car
not and anould not isolate itself fror
the rest of the world, the conventio
in a resolution adopted asked th
President to do his best to prevent th
new tariff bill from shutting foreign
merchandise out of the country. "There
is no possibility of a healthy and nor?
mal Kituntion in tills country until the
j nations with whom we trado are able
? to pay us for what they import," the
statement of principle, which was part
I of the American bankers' Koran ex
| pressed in a series of resolutions,
| rend: "As this can be done in the main,
only by the means of exports to us, we
! trust that the Presidert will not hesi
! t?te to make use of the power granted
! to him by the new tariff law to make
i such adjustments in the schedules as
j may be necessary from time to time
for a restoration of our international
commerce." Th*-i the bankers show
j friendliness only to the self-nullifying
; provision of the new tariff law.
* ? ?
The bankers were sedulously careful
not to commit themselves to advocacy
| of actual cancellation of the inter-Al
! lied debt, though they are in a moor
| to favor modification and adjustment
? Alvin V. Kroch, president of the Equi
j table Trust Company, in one of th<
I principal addresses yesterday, suggest
ed that however feasible it might b<
for Great Britain to discharge in ful
its debt to the United States Treasury
it might be unwise for America t<
insist on a literal execution of the loai
agreement. As for France and Italy
Mr. Krech denied that debt cancella
i tion would help solve the riddle o
German reparations, and urged tha
the United States declare "a holiday o
; ten years for our continental allies
j during which the debt would be non
* * ?
As the largest convention of th
American Bankers Association drew t
a close it was difficult to assay it
real value to hankers. The publi
speeches and debate constitute onl
one phase of the annual coming t<
gether. The informal rubbing of e
bows by bank officials is equally in
portant. The unprecedented large a
tendance was partly attributed to tl
fact that many out-of-town financie;
welcomed the opportunity to come I
New York to ask questions and to se?
enlightenment as to banking method
An endless Btream of visitors flown
Into the counting rooms of Wall Stre
all through the week in quest of da
-?men anxious for the opportunity
observe. Since the New York ban!
have correspondent institutio:
throughout the country, local banke
were glad to have the chance to e
plain the reasons behind many of, the
policies, particularly where they i?.
pinged on relations with out-of-tov
sufficiently acquainted with conditions
of banking in the United States to ex?
press an opinion ub to the advantages
or disadvantages of branch backing
here, but that in his own country,
where conditions were very different,
he regarded it as essential to the sta?
bility and public usefulness of the
"So far as conditions are similar,
as in the large cities," said Mr. Mc?
Kenna, "it is difficult to believe that
with the limitation of branch bank?
ing to these centers branch banking
would not be a success in the United
Mr. MeKenna left the interview to
attend the closed luncheon of the Bond
Club of New York at th?*? Bankers'
Club, and from that event went to the
Polo Grounds to witness his first
world's series game. To-day he will
go on the excursion to West Point and
to-morrow will sail for home.
Bankers Favor
Tariff Changes,
Aid to Europe
Resolutions Adopted by
Convention Calling on
U. S. to Act With Speed
on Big World Problems
Anti-Strike Move Asked
"Unnecessary Expenditures
Must Be Eliminated,"
They Also Declare
Resolutions calling for adjustments
of the new tariff schedules, the formu?
lation of principles enabling American
cooperation in the rehabilitation of
Europe, officia* representation of the
United States on the Reparation Com?
mission, and anti-strike action, adopted
yesterday ot the convention of the
I American Bankers' Association, placed
that body on record regarding the
outstanding problems of the day.
The text of the resolutions bearing
upon policy, which might be termed
the platform of the association, fol?
"We continue to urge upon our gov?
ernment the elimination of all unnec?
essary expenditures in order that taxes
weighing heavily upon business may
be still further reduced.
"We disapprove of the continued at?
tempts to establish further govern?
ment commissions which tend more
and more to hamper the industrial and
commercial development of tho country
and in an unnecessary way increase
the cost of doing business. For like
reasons wo recommend the discontin?
uance of such existing commissions as
experience may prove unnecessary.
"We reiterate our position in re?
gard to tax-exempt securities of any
type, believing that it is highly un?
desirable that further tax-exemption
should be authorized by the Federal
government of any of the political
t;ub divisions of the country.
"We call attention again to the sen-?
ousness of the foreign situation, es?
pecially of Europe, which is affecting
detrimentally our own conditions and
preventing even those industries in our
country which are not dependent upon
foreign trade from recovering fully
from the depression which otherwise
would be rapidly disappearing.
''There io no possibility of a healthy
and normal situation in this country
until the nations which whom we trade
are able to pay us for what they i:n
I port. As this can be done in the main
! only by tho means of exports to us,
we trust that the President will not
j hesitate to make use of the power
granted him by the new tariff law to
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Silks &ffiamj!att}j ?**
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make such adjustments in the sched- f
ules as may bo necessary from time
to time for a restoration of our in?
ternational commerce.
"We believe that the time has come
tor the government of our country to
formulaic the principles on which it
will be able to co-operate with other
?""J1""3 to bring about the needed re
nntnlitation of European countries and
peace in th? world.
"To this end we ur~e the Adminis?
tration to consider the advisability of
promptly making its representative
m " i , R.eParatlon Commission, an
offleia! of that body, wo also recom?
mend to Congress that there be granted
to trie Uebt Funding Commission such !
turther powers as will enable it to
negotiate more effectively with the
J?"1*" nations now debtors of the
United States.
"We are glad to note an end of the
recent strikes in fundamental indus?
tries, and we hope that the period of 1
peace m industria! life will be used for '
the purpose of careful investigations ;
to serve as a basis for a permanent
method of adjustment of the questions
ansin-r between employer and worker.
it is our belief that in thoso indus?
tries whose continued operation is es?
sential to the wellbeing of the whole
Pe?5 _? 0rf?'ani:icd strikes should be re
Bfrf S? against the welfare of the
state. We make a sharp distinction
between the right of the worker to
leave his employment and the attempts
made by intimidation to compel those
employees to leave their posts who
otherwise would be willing to work.
"We again urge upon the govern?
ment and the people to support \t('
every way possible any measures which
tend to improve our transportation
systems, either on land or on sea. We
believe that our merchant marine
should be developed through individual
initiative and not be placed under gov?
ernment management, and we approve
of the efforts of the President of the
United States to bring about such a
development as is necessary in order
that our merchant marine may serve
our commerce in time of peace and be
a protection to our country in time of
"Therefore, we recommend the modi?
fication of those sections of our ship?
ping laws which make it impossible for
our ship owners to compete on an even
basis with ship owners of other coun?
"We are glad to note a steady im?
provement in the condition of the
farmer, and we congratulate the agri?
cultural community upon having or?
ganizations generally led by men who
are showing marked breadth of vision
and soundness of judgment in respect
to the problems confronting this most
important of our industries.
"We can assure the farmers and
livestock producers of the country
that the bankers will continue to lend
them their best aid in the solution of
their manifold problems, which solu
tion should be sought through private j
enterprise and not through government
aid. We, therefore, approve of the '.
various endeavors being made by the
farmers themselves to increase the
facilities for the orderly marketing of
their products.
"We disapprove emphatically the at- |
tacks made upon the Federal Reserve '
system and the members of the Fed
ernl Reserve Board individually. We j
believe that there is no surer way of !
hindering a return to prosperity than ;
by attempts to undermine our bunking |
system, which has prove?! its valu?? ,
through an unprecedented time of j
stress and strain."
"We regret to see that some of our i
people hnve not learned from the ex- '
perienco of Russia and the Central
Empires of Europe that n sound cur?
rency system based upon a gold
standard is absolutely essential, not
merely for the orderly conduct of th?.
business of the country, but even for
the maintenance of civilized life."
"We recognize the importance to
sound banking of examinations cop
ducted under the auspices of the
clearing house associations of the
country', and we recommend the exten?
sion of this system of examinations
to all communities of sufficient size.
"We pledge our support to the in-,
coming president of the American
Bankers' Association in the campaign
to teach sound thinking along eco?
nomic lines. We regard such educn
tion as necessary for the safety of our
great democracy. We believe that the
universities, colleges and other educa?
tional institutions of this country
should co-operate to further this
"We recognize the splendid educa?
tional accomplishments of the Amer:
can Institute of Banking and we r?c
omment its future possibilities t?> th?j
active and intelligent interest of ih?
members of this association."
f?ffl?n Opposes W.p. f;. Harding
WASHINGTON, Oct. 5. Senator
Heflin, Democrat, of Alabama, to?lay
made public a letter i<> V"ji??;?*ent
Thomas B. McAdams ci J/t AnWiican
Hankers' Association urging that the
bankers, in convention at New York,
should not adopt a resolution In?
dorsing W. P. G. Harding, of A,iiO?*r^
f.?r reappointment to the Fed? ral Re?
serve Board.
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