Evening Star Newspaper, February 18, 1927, Page 5

STOCK EXCHANGE HEAD DENIES U. S. ENGAGES IN IMPERIALISM Simmons Tells Board of Trade Charges of Using Markets as Political Tool Are Based on Ignorance. Wmphatic denial that the United Statew, cither as a government or as a_twapie, has engaged in a program of Brancial or economic imperialism was made by E. H. H. Simmons, pres- ident of the New York Stock Ex- change, in a comprehensive address 1ast night on international finance be- livered before the \Washington Board of Trade in special session at the Chamber of Commerce of the United States. “Misapprehension concerning the likelihood that this country ever will make a political tool of its capital markets in order to further a policy of foreign aggrandizement,” Mr. Sim- motis declared, “can arise only from utter ignorance of American Govern: ment and American business alike.” Holds Policy Repugnant. Such a policy, he said, not only would prove repugnant to the citi- zens of the United States, but funda- mentally is the opposite of what tra ditionally has been the actual policy of this Nation. Tracing the great financial move- ments of wartime which made the United States the greatest creditor nation of the world, due to purely economic development, Mr. Simmons declared the American position has been misinterpreted as ‘“‘imperialis- tic” largely, because Eurape ing us by her own past histor; Edwin C. Graham, president of the Board of Trade, presided over the ses- sion, which was attended by more than 500 business men, bankers and financial students. Members of the District Bar Association attended as spectal guests of the trade body. At the outset of his address Mr. Simmons disclaimed any intention of discussing the intergovernmental debt settlements and confined himself to foreign security loans privately placed with American investors. Reviews Financial History. At the opening of his address on “The Myth of American Financial Im- perialism” he launched into a de- tailed account of the financial and political history of the Uniw:d States. Although in 1900 acquisition by the United States of colonies following the Spanish War and a_temporary experi- ence with foreign financing led some to believe that the United States was adopting imperialistic policies, he said, the subsequent financial panic of 1907 and the actual colonial policy adopted by this Government sharply disproved such predictions. The descendants of three geners tions of American pioneers, said Mr. Simmons, revolted at the thought of dissipating the fruits of hard-won in- ternal conquest over the American wilderness, in senseless and needless foreign adventures. During the World War, however, he said, the repurchase of vast amounts of American securities pre- viously held abroad as well as the development of the Federal Reserve system placed this country in the lead- ing financial position. *‘This situation of the United States today as the leading creditor nation of the world, with a powerful organ- ized central banking system,” he de- clared, “is so new and unfamiliar to Americans themselves that it is little wonder if its future possibilities have been and are misunderstood abroad. Misinterpretation Not Surprising. “Neither is it surprising that our national financial and economic situas tion is misinterpreted in other coun- tries as imperialistic, on the old pre- ‘war meaning of the term. Europe to- day is judging us in this respect by her own past history. “For almost 100 years,” the speaker said, “there have.been nations that ‘were able steadily to invest part of their surplus funds abroad. Thus, al- though this experience is novel to us, the basic economic principles by which it operates are sufficiently es- tablished. “In most cases, such nations tended to expand their export trade by the although frequently an even greater expansion was seen in their import trade. On the stock exchanges of such creditor countries, foreign se- curities invariably appeared, and in ternat.onal financing became there a regular part of the national business. Britain Was Pioneer. “Great Britain was the leading pioneer in developing the functions of an international creditor nation—a natural result of her leadership in the industrial revolution which occurred at the beginning of the nineteenth century, and of her far-flung colonial empire, which proved so fertile a source of lucrative foreign invest- ments. Yet British capital also flowed out from London to many countries which were not parts of the British Empire at all—notably, of course, to the United States itself. “‘On_occasion the British navy and the British army came to follow paths into foreign countries which had been blazed for them by the pound sterling. Some historians, for ex- ample, cite the British investment in the gold and diamond fields of South Africa as a primary cause of the Boer war. On the other hand, the British Empire was a large affair be- fore London could furnish any great amounts of capital for foreign invest- ment. Moreover, it can hardly be claimed that the United States ever experienced the effects of a British financial imperialistic policy. “As a matter of fact, no country’s foreign policies in regard to its foreign investments has been strictly con- sistent and without the exceptions and paradoxes so often imposed by changing ministries and shifting tides of public opinion. Yet the fact re- mains that the growth of the British empire cannot be altogether disasso- Genuine blue-white dia- mond, set in 18-kt. white gold mounting, this ring is sure to please “her.” Sat- urday special— 145 Pay 50c a Week THE EVENING STAR, WASHINGTON, D. C., I'FRIDAY, FEBRUARY 18, 1927. clated from the masses of foreign se- curities which were absorbed by Brit- ish investors through the vast London financial market. Peace Held Result. “With Great Britain, however, capi- tal flowed out to other countries | through a free and open securities market of world-wide scope, and direc- tion was given to it primarily from economic rather than politjcal mo- tives. In the main, British foreign in- vestments had in consequence a pacific effect. “But other nations, slower to ac- quire forelgn colonies and possessions than Britain, were more inclined to give direction to their foreign invest- ments principally and sometimes pri- { marily on a basis of political considera- tions. It became, in fact, a recognized practice in international affairs and relationships to employ foreign in- vestments as a pawn in the attempt to expand territorial possessions. With certain continental countries the statesman, and sometimes even the military strategist, stood almost con- stantly behind the security investor and the investment banker.” Today these things are remembered —sometimes with great bitterness—in Europe, Mr. Simmons said. Fear Is Only Human. On the other hand, Mr. Simmons said, European countries see in the United States a new and unfamiliar world power, possessed of enormous wealth, and apparently always en- gaged in much money lending. “It is only human nature to fear what is not understood, and to_judge a new situation by standards inherited from a familiar past. No wonder, then, that Europeans declars that the United States has undoubtedly adopt- ed a policy of financial overlordship 2d imperialism to the present-day aebtor countries of the world,” he de- clared. . “It seems something beyond human nature for a debtor to love his creditors. Despite the enormous as- sistance which British capital lent to the building up of this country during the nineteenth century, much angry talk of ‘British gold' was occasioned by it here. Now that we have become the great lending nation of the world, the shoe is on the other foot, and it is ‘American gold’ concerning which so many indignant protests and sinister allegations are being made in other countries. “Popular cartoonists, who so fre- — e LVX E1 B8 VERITASS k 407 7th St. N.W. Phone uninrqaa for Correct foreign loans which they absorbed, THE BOYS SHOP ON THE SECOND FLOOR OF THE P-B STORE Final Clearance - School Suits and Overcoats PRINCETON quently are an accurate index to pop- ular thought, have seized upon the undoubted wealth and the frequently misunderstood aims and ideals of Uncle Sam, and pictured him as a long-legged giant, laden with money- bags and decorated with dollar signs, bestriding the world. At a time when American capital invested in foreign securities has proved the chief stabil- izing factor in a disorganized world, the United States is depicted as a bullying and greedy plutocrat, bent only on the oppression and subjuga- tion of other nations.” Pointing out our comparative inde pendence of the rest of the -vorld in respect to raw materials, Mr. Sim.:ons stated that there is absent here the critical inability to feed ourselves which is the nightmare of many older and more heavily populated countries. “The basic colonial policy of this country,” he added, ‘has therefore been unique in _history. While foreign orators and journalists are accusing us of encroachments and aggrandizements, the United States has been foremost among the nations of the world in furthering by practical and unselfish methods an ordered and peaceful independence among the lesser countries. Loans Not Made By United States. The speaker emphasized the fact that the security loans for foreign countries recently floated here were not made by the United States Gov- ernment. “There is an almost complete disso- ciation,” he said, “between the United States Government and the American financial markets. With genuine sagacity and foresight, the National Government has always refused to be- come entangled in our private finan- cial affairs, or become itself respon sible for them, by attempting any such policy of governmental control sover our financial institutions as was basic i~ the pre-war European conception of the imperialistic state. Loans are not being extended to foreign coun- tries at the suggestion or initiative of the state. “What supervision the Government has actually extended over foreign loan flotations in this country has been purely negative in character—that is to say, the Government has provided a brake rather than a motor for the process of American foreign invest- ment by opposing certain loans on cer- tain occasions, but never urging posi- ! phrases, it comes down to the propo- tively that loans be made. This type of supervision Is a necessary and in-| deed inevitable operation of govern- ment. lisapprehension concerning the likelihood that this couhtry will ever make a political tool of its capital markets to further a policy of foreign aggrandizement can arise only from an utter ignorance of American Gov- ernment and American business alike. “Apart from the governmental as- pect of the question, what is this ‘financial imperialism’ of which we are hearing so much nowadays? Stripped of rhetorical and imaginative sition that we have a certain amount of surplus funds which other peoples are anxious to bowrow. The extent of our supposed ‘overlordship of the world' consists simply in our request that, once contracted, these debts to the American investor will be honored and paid, and that the funds which they represent will be used for peace- ful ‘and soundly productive purposes. “If American finance is to play its part in world reconstruction sanely and efficiently, we must consider our foreign investments as a business proposition. The American investor, after all, has little reason to consider himself a philanthropist because he vs a foreign bond: neither is he a bully, or a conspirator. “The diversion of national finances to promote national aggrandizement and the acquisition of new territories r a policy which in the end own purpose and topples virtue of its own weight. No only would a national imperialisti¢ policy in finance be repugnant to the great rank and file of this country, but it would be sharply and vigorousiy attacked in the very financial centers here where such blans are sometimes supposed to originate. Investments Aid Reconstruction. “On the other hand, the judicious investment of our doliars in foreign securities has ever since the armistice held forth to the world a powerful assurance of a reconstitution of pub order and safety, a reconstruction You Must Be Satisfied PARKWAY USED m SALE of industrial and agricultural pros- perity, and return to the peaceful and creative habits of life which were halted by the great war. “Like the waters of another Nile, the flood of American funds has gone out to fertilize the scorched and barren waste of places of the world, to ex- plore and subdue the savage wilder- ness and to lay the firm foundations ‘for a period of international peace and prosperity in whose benefits both debtor and creditor countries will am- ply share.. America, having attained an economic maturity, having become the gretest international creditor na- tion of the modern world, is facing an almost limitless panorama of op- portunity for bettering both itself and the world. It remains for us to see that this opportunity is not squan- dered, that our new financlal facilities are not misused through our pride or blunted through out self-satisfactions’ Mr. Simmons' address brought vigorous applause, and a rising vote of thanks was extended him on mo- tion by Howard Moran, president of the District Bankers’ Association. Husband Charges Desertion. Charles A. Foley has filed suit for a limited divorce from his wife, Cora F. Foley, on a charge of desertion. Foley says he has made every effort to persuade his wife to return to him, but that she refuses. They were mar- vied December 1, 1921, and have no children. Attorney P. M. Cook repre- sents the husband. because EVERFRESH is abso- lutely safe, pure and sterile and is sealed in new, sanitary bottles. Specify— MASNESIA | CITRATE OF MAGNESIA Sedans, Tot , Coupes SALES DEPT., 3342 M ST. N.W. BRI R R 2R R4 : Suits for Young Men “From_the AVENUE o NINTH- D.J.KAUFMAN .~ 1005 Pa. Ave. 1724 Pa. 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