Evening Star Newspaper, February 7, 1932, Page 28

U.S. Billions in Latin America (Continued From First Page.) the Var years avoiding political with a view to complications, has itself been subjected to unfriendly analysis. Government officials abroad have testified they were told to write timisticaily about loans, and other 'orts have been made to smoke out gl(’u against the investors’ pocket- Testimony has been presented $5e half of 1 per cent of the foreign Jssues—waicih somebody always gets as a promotion fee—had gone to offica’s skake influence, if not the de- fermining factor i the loan, at least Rid been potentially negative until the commission was arranged. There havc been charges that loans granted by im- portant financial institutions in ex- change for favors to private companies: and in divect contrast, there have been assertions that many of the Latin- American loans were forced on unwill- ing governments and that the ultimate sale price of the bonds was raised un- justifiably by the expensive efforts put ferth to induce the governments to ac- cept the money Two major problem is that of the investor the future of our lendi America, a duty we must financial leader of the w The problem of the investor comes first. Indeed, it is upon recovery of hi investments that the outlook for fi Jending depends. Definite moves being made in various directions bring the bondholders together so that they may present a united front in the discussions of debt rearrangements that must be made the next few years. stand out. One The other is g to Latin ce as the in Ahead. committees one, the Assoct: Big Job Lies Two general bondholders have been chartered, and Latin-American Bondhold tion, is now functioning ing_men berships and issuing repo The Ir vestmen! Ban Association has taken no public steps toward organiz- ing its own Latin-American bond- holders' committee. The bankers feel that the investors' interest is closely tied in with their own. and that their more intimate knowledge puts them in a strategic position to represent the bondholders, but as vet their plan for organizing such a group has not been made public Whatever may come of these or: gations, & tremendous job lies ahead in straightening out the tangled skeins of a hundred investment units depend- ing upon a thousand economic and po- litical factors Yet the nations whose credit der this close scrutiny. and t ing methods of whose bankers here hav been so bitte: assailed in the publ hearings in Washington. are admitte the richest. in potentialities, in the world today: their future is the most assured; their progress, step by step through the centuries, has been the sort of advance which makes optimism 8s to their future inevitable 4 The disclosures of the Senate mves- tigations reflect in a number of spe- cific instances on the methods follow- ed by investment bankers in arrang- ing for loans and in floating them on the market here. Yet at least one gov- ernment in Latin America—and that the most seriously questioned of all in the bond situation—has had the good sense to protest against the gratuitous reflections on its national credit as brought out in the testimony. Bolivia whose bond_issues of some $60.000,000 are declared to have been unjustified and perhaps even corrupt, has pointed out that the loans were made in good faith and so used. and that the gov- ernment intends and expects to resume full payment of interest and sinking fund when commodities (meaning tin, the great export item of Bolivia) re- turn to normal. Still it is probable that Bolivia is one of the two or three countries which were loaned more than they could handle. By actual estimate of poter tial revenue, st the time the loar were made, virtually every couatry in Latin America which borrowed in the New York market between 1923 aud 1829 was able to handle the interest and sinking fund of the loans they is- sued. In some cases (like Bolivia) at least 25 per cent might have been questionable property. but in the world crisis which has followed the orgy of lending, not only the 25 per cent but much of the rest has gone into de- fault. is un- Sees Nothing Alarming. ‘There is no reason for any one to- day to defend the investment bankers for their methods. nor to excuse the greed of officials who sought loans with which to make their governments pop- ular through great public works pro- rams. But the battle of the bankers or opportunity to issue the Latin- American loans was not to force them on the governments, but to get bond issues away from a competitive banker—no more. And in the final analysis, the difficulties in Latin America can be described very prop- erly as investment indigestion In reality. this is a periodical complaint, cured by time and a good, digestive, and no more permanently damaging to the internal machinery of the countries than too much Thanksgiving turkey is to a healthy bov For the last 100 years these countries of Latin America have lived alternately in a feast or a famine of foreign invest- ment, and they have learned, without teacher or precept, to take it when the taking is good. The approximately $5.000.000,000 which has gone in, since the close of the World War, from this country alone, was the largest Thanks- giving dinner to which Latin America ever sat down. and uncles and aunts certainly stuffed the goodies down the expectant throat. It is hardly to wondered that there was indige and not all of it without one the unhappy accompaniments of indigestion ~—a rather nasty resentment toward the uncles and aunts who did the overfeed- ing. Not to mention what the uncles and aunts think, now that the party is over, about the table manners of the nephews and nieces In the final analysis, however, Latin America has put an astonishing pro- portion of the investments to work— astonishing, certainly, if we judge b; what people say she did with the money. Here is the asset side of the ledger Nearly 100,000 miles of excellent roads, including the famous Cuban Central Highway. More than 100 fine power houses from immense hydro and steam de- velopments to well planned small units. Half a dozen fine port developments, ‘worth from $15,000.000 each, down Some notable railway electrifications and important and extensions. Public buildings, from the superb Cu- ban capitol and the unfinished restora- tion of the Palace of Pizarro in Peru to a fine list of concrete school houses. No armaments—with the single ex- ception of Bolivia, which spent a large wad of our American investments for arms bought in England Only a few “balanced budgets,” a form of boom-time finance thit was far less common than believed—although certainly not unknown A remarkably small amount of graft While government officials some of the “gravy,’ the loss was in- finitesimal in the great total Very few. scandals In the issuance. Some ot too savoy bits are likely to be unearthed in investigations, but yecord is generally clean. Expects Loss to Be Cut. Not all the wisdom of today's hind- sight was used by the investment bank- e but the most serious general charge seems to be that they made the loans o satisfy the market demands up here fon and not becadse the countries or the | ts on which securities were floated %’:c thoroughly judged as to their ability to use or to pay for the service of the money lent them. Yet when the clouds are cleared away, and the re-establishment of credit i carrled through—as it will be —it is safe to predict that there will evolve certain sound values and far than the holders of those same .. now dare to hope for. It seems the | bl Tailway improvements received | the | |safe to predict, also, that the loss after the fear and panic of the depres sion have allowed securities to reach a true value, will be nearer 20 per cent than 80 (the present average “paper loss on the government issues) and that the chief losses in most cases will be the interest from the time of default to the time of resumption of payment and in a number of cases & shaving in the interest rate | Most of government loans—there are only a few exceptions—and all of the corporate investments, almost with- out reservation, were floated on the basis of sound values or sound pros- pects, judged in the psychology of the boom. ~ Some were overloaned a con- siderably larger sum than was justified but ‘the soundest banking would, and did, issue loans on revenue expectation that was wiped out, temporarily, with thousands of other values in the de- pression. However, th warth, the sound promise of the fu of the cour and of their commodi- aes remained, and stiil remain Perhaps the chief lesson however, and the one of greatest value for the years ahead, is that laid down Horbert Hoover 1927, when th Coolidge boom W the upswing. He said_the 1 his address before the , Commercial Con- Washingten: he repeated n_forcefulness, w as addressed the fourth Pan- Commercial Conference in city and from the same ros- ears later, in October, 1931 n, as a government, should and no_government lend. and 1d discot their_citizens rowing and lending, unless this is to be devoted to productive Out of the wealth and dards of living er 1f must come th pital. together 1 the borrowing cr course of action creates ob- ligations impossible of repayment ex- cept by a direct substraction from the standards of living of learned with ent, k n Pre Ameri th the ntry net gain to Any othe the borrowin: country and the impoverishment of her people. In fact. if this principle could be accepted between natiol world. that is. if nations would do a h the lending of money for the bal- neing of budgets, for purposes of mili- tary equipment or War purposes. or even that type of public works which do not bring some direct or indirect productive return. a great number of would follow to the entir There could be no question as y to repay. With this incr writy. capital cheaper. the and individual of the lender to coliect ted debts would be avoided. there be defl increase in the d living and comfort er of the borrower. There Id be no greater step taken in the prevention of war itself.” Capital Greatest Need. Strong medicine to bring up four years later, and vet proven true, not alone for Latin America but for all the world It marks, in a way. perhaps the epit of the old era of borrowing on government bond issues the holder of Latin Ameri- other government) securities could know the kind of loan his bonds represent, he could tell without con- sulting any expert how good the bond would be in days ahead. But vision, such understanding, is not easily come by. The second best means is to survey the long trend of events, the slow development of the security of the countries which represent most of our security issues and which in the next few years must have our money as well | as our aid and comfort in a myriad of | other ways. | Latin America is a creator of wealth from within itself. The total area is immensely more vast than the United States. Its wealth within itself now is second only to that of the United States and probably is destined to out- distance our own in the next century. Capital is its great need, and for an even hundred years capital has flowed to it. It is now passing out of the third | of ‘the eras of capital inflow, and the | fourth era lies just ahead. In that fourth era there will be a closer ap- proximation to the sound principles | laid down by President Hoover. |~ That fourth era will, indeed, probably | be a time of sound, seif-sustaining cap- | ital investments in'industry, in produc- | tive public works and in the upbuild- ir tion and equipment for the production of prosperous civilization and the goods | thereof. The new era s inevitable, and | it will carry to Latin America the in- vestment of capital that it needs, and |to the investor that combination of | sound security and enhanced return that alone has ever tempted him into | overseas investments The contrast of the various eras that have gone before is deeply significant of what is to come in the future. Let | us contrast for the sake of emphasis two outstanding national types of in- vestment in_Latin America—those of the United States and of Great Brit- ain The United States has invested about, $6,000.000,000 in Latin America, about | four-fifths of it since the close of the World War. Great Britain has invested an almost equal sum, rather more than four-fifths of it prior to 1914. The | United States investment was primarily in the period of development, the Brit- | ish_belonged to the era of concessions and exploitation. The British loans to governments were mostly at high rates, in a period of ignorance and un- certainty of security, and most of the | British private investments were staked | down with concessions and monopolies, as on railways and port works, Regarded Sound Risks. Investments from the United States | have been roughly divided, half and | half, between government securities and | private enterprises. All of them, how- ever, were considered as sound business risks, and neither as politics nor | charity. The earlier investments from the United States went into mining | ventures and fruit companies, in which | the returns were high, but which, on | the basis of stock market valuations, quickly found a level but little above the rate that would have been expected | from similar vengures in the United States itself at the time. As & gen- eral rule, the United States investor, | particularly between 1923 and 1929 | when virtually all his recent invest- | ments entered Latin America, gave | these securities the benefit of the high- jpsp rating in their class—a generosity which the disastrous drops in many ‘of them in 1930-31 did not seem to | justify. hd The British, on the other hand, al- though their losses from Latin Ameri- | can investments probaniy have been | greater, have estimated more nearly the | actual credit risk involved: a gamble | has been a gamble, and so labeled. Not all the scandals connected with the | early British loans (and they were | many) are to be blamed on any one, | British or Latin American. In many | of the flotations vast sums were lost, | but perhaps they would have disap- | peared in any case, for a welter of in- | trigue and chicanery surrounded those first appeals for loans in the second quarter of the last century. In the 1923-1929 orgy of investment in Latin American securities many of the identical scenes and problems which had faced the boards in London a cen- tury before were re-enacted almost let- ter by letter; only the beter organiza- tion of the investment market of the world prevented a repetition of the scandals which accompanied many of the British fluctuations. The result was in part to be foreseen even at the | height of the recent boom, but only in art B The financial history of Latin Amer- ie in relation to the outside world, goes back only to 1822, when Greater Colombia and Chile floated govern- ment loans in London. The Colom- bian loan is typical of what happened them. It was for £2,000.000, issued at 84 and drawing 6 per cent; but with commissions and the deduction of two years' interest in advance. Colombia Teceived only about £1,500,000. In the d dangers to Perhap: can ability | would become | na- | independence in | | and of national and private organiza- | THE subsequent splitting up of Greater Co= lombia into Venezuela, Colombia and Ecuador this debt was parceled out and was lost in a maze of defaults, re- fundings and arrangements, Yet among {the subscquent debts of Colombia 15 one for £200,000, on which interest of 15 per cent per year was promised and paid The history of the Colombian loans | is typical. and yet in the end the losses | to the investors were not heavy, ard since 1925, when the first Blair loan was floated in New York, the record has been e nt Perhaps most interesting of all is thei fact that the financial record of | Chile, whose first bond issue was made | in 1822, at about the same time as Co- lombia’s, is so good that not one page of the annual report of the Council ! of the Carporation of Foreign Bond- holders of London is devoted to it—un- til the report just issued! This report is the factual record of all defaulted and repudiated government obligations, | 1and absence from its pages is the hall- | mark of probity and honor. | Early Period Recalled. The most notorious of all the Latin | Amcrican bond flotations of the early period was the series of issues brought | out in London and Paris between 181 and 1870 for the construction of an in teroceanic railway in Honduras. The| first was for £1,000,000, issued at 80 and | be; 10 per cent The second, i sued in Paris, was for £2490.108 at 7 be 3 _per cent interest. The third 00,000, issued ostensibly | at 80 and bearing 10 per cent interest| id 3 per cent sinking fund. From loans Hondu | miles of railway and all the rest was used up in commissions for Honduras agents and English and | { French brokers. The loan was de- | faulted until 1926, when the interest | then amounted to some £25.000,000, and | all of the principal, excepting £1,200.- 000, were dropped. The £1,200.000 debt i was accepted by Honduras and pay | ments arranged over a period of sixty| » one knows how much the vers paid for these bonds, but | issue was certainly hawked | London at about 20, instead leged 80 selling price. The wholc was the su of a le and | unlovely amentary investi- | i | ve British b rather par. gation The financing ndals, | Latin | to feel ti | | first era of ended in a through all which the lean countries were given t they were both pariahs and | of the sharpest sort of dealings ittle or no industrial de- even in plantation crops} mining, through the first period was primitive and undeveloped selling guano f fer S, was only great exporter, Brazil had the production of coffee about There was little other interna- tional economic life. | The period from 1880 to 1914 v { era of Britist Lati: primari; Sec their money port in_which the were ested, both obtaining long and nous concessions. ‘The third! type of British investment was in in- dustrial enterprises, chiefiy in the e: tractive industries.” Early investme of United States money, in min chiefly, were made during this period he third era of Latin Ame financing begins with the close o | World War, although even earlier there {had begun the application of modern methods and soundly financed en | prises to the mining, oil and suga a Immense capital went these from the United States, ir panies owned and controlled k this period (although it be co in 1906) belonged t in ts from Canada and the Unt tates in electric power de- velopments. To this era belong also the investments in government bonds be- tween 1923 and 1928. By the end of 1930, when all investments dried up in | the great depression, United States in- vestments in Latin America had ir creased 339 per cent over the figure in 1913, and 11,312 per cent over that of 1880, Latin burst of American | of such m, vietim There was velopment id | ar Peru, is the investments in in railways went into French also America iar WOrks, in \n | in- | first heavy Points to Advances. It has been pointed out by authori- ties who defend the loan policy of the United States i bankers in | the 20s of century that our trade with Latin America has increased in almost exact proportion to the increase in our lendings. Proceeds of the loans | neant increasing ic ad- e countries w Te- ved credits st of the financ of vears will admi the and the im t of | lons and indu: 1}‘ in Latin Ameri little g—no other region of the wor marked such an advance in tr 15 vears. Increased work and the r wa lted from gov- ment spending virtually broke ever the system of peonage which had gripped the laboring class many of | the countries for four cen This change necessarily caused diffi- | | culties and some losses to local and for- eign companies operating in those coun- tries; food and local commodity prices rose, etc. Colombia’s losses of labor from the coffec fields to the publ works began with the loans of 1925 to ised a slowing up in the chief industry of the coun which was supposed to produce revenue to pay the very service on the bonds But, nevertheless there came also a Tis- ing_standard of living, a broadening civilization. Education has been ex- tended, in part, at least, as a result of foreign loans. And no step in educa tional advance can be backward Latin America. This is poor comfort, however, to in- vestors in Latin American bonds. The defaults and postponements have not however, been repudiations—indeed, re- pudiations are not the rule in Latin American finance. The bond issues of the last decade have been generous ones many of them too‘gencrous, but the agreed principal was all transferred to the borrowing governments and used or wasted by them. The commissions were sometimes large, and there was often a fairly wide “spread” between the price paid by the ultimate buyer and the price | paid to the governments, but it was al- ways a matter of strict arrangement and agreement. There were few instances at all comparable to the unfairness and criminal cheating of Latin American governments, by their own people and by the bond houses, whicn marked some of the earlier loans. There is no question, however, that the sudden stoppage of all loans was more unfair and more destructive to all values than the forcing of money which was not yet needed on countries which felt that they should take these loans while the taking was good. Less Bitter Than Expected. The Latin American attitude at the close of the investment orgy was less bitter than might have seemed justified A not unexpected result was a demand for the reduction of interest rates and the extension of the period of amorti- zation, or the suspension, temporarily, of payments on the principal. Some of the countries which continue in- terest and sinking fund payments even with great hardship have felt that be- cause of that firm attitude they were entitled to interest rates equal to those of the strongest countries in the world But they asked it on the ground that unless these concessions were made, | they would have to suspend payments |temporarily—and that is not the! ground on which such credit terms| are extended. Msny difficulties have come to the sur{ace in these hectic days, one of the most impressive he- ing the problem of relatively short terms for which the loans of Latin American governments run. It is certainly far from an idle dream that foreign investments from the United States in the future will have a direction a0 a continuity which they have lacked in the past. Not the least of the causes of the col- lapse of Latin American securities in 1930-'31 was the fact that many of the projects for which money had been lent in the preceding few years were unfinished, and as yet unproductive. When the sudden closing off of the ave The m policy that veme boom living cc res cla SUNDAY ST/ | least \flow of money came these projects could not be completed and brought to a paying basis. Another factor of prime importance \ \ AR, WAShING)ON, WHEN WE COME TO RESTOCK BY BRUCE BARTON. HAD occasion recently to visit an Ohio city of 30,000 people. Its indus- tries are running only half time, and everybody is hard up, but cheerful. Funds have been raised to take care of those who must have financial help. And on the second floor of the City Hall I saw an exhibit that gave me something to think about. The women of that city have ransacked its homes, from cel- lar to attic. Lit- erally! They have requisitioned /gm= every old suit overcoat, dres hat and pair of shoes. The second floor of the City Hall Not a single garment has escaped them. DG, R 7 1902— LA TWwO looks like the basement of a de- partment store, and the piles of goods are melting away very fast. The closets of the community are bare. Yesterda in a girls’ school in New Englan clothes you have. We are gathe neighborhood who need them.” I said: “That's a fine spirit must send up a good big bundle But I can't,” she protested. “Why not?” “I have already sent out every single scrap of used clothing As for shoes, you'll find when you look in we had in the house. your closet that you will have t collection and took them all.” Speaking the other day to a group of banker my friend R. H. Grant of General Motors pointed out that fewer automobiles were sold in 1931 than went to the scrap industry heap, and t every month of piling higher the total future demand, | A leader of the tire industry told me their surve; that there are more badly worn tires on cars today than ever before. The railroads are having to to junked or extensively repaired All this means a type of “consumption” which is very different from that of the years 1924-1929 “ec and then traded it in The dictionary defirition of * stroys, one who uses up an article.” We are destroying things now, using them up completely. There certainly is going to be a country some day— When we come to restock! (Copyrix 1sumer” as on: who used an article until it was a little shabby | my wife received a note from our daughter, who is | | d, saying: “Send up all the old ring them for the people in this for the youngsters to have. | You | right away.” | 0 buy some. I looked over your about the motor subnormal production is merely ys indicate use much equipment that ought In that period we thought of a ‘consumer” is “one who . . de- whale of a lot of business in this ht. 1932.) Earth Proves Most Perfect Timekeeper As Savants Study Crystal Vibrations (Continued From Third Page.) from the creased To avoid such effects accurate clocks are usually fixed firmly to concrete piers running deep into the earth. Nevertheless gravitational variations can be detected which are apparently to_swellings and contractions of over relatively long periods During the period between and 1900 the earth swelled suf- center of the earth is in- one part million, or more than a se vear. Again within two or three years of 1917 it increased by about one part in_ forty million, causing an error in precision clocks of nearly a second a year. Detecting Variations. Such variations can now be Teadily detected by means of the Loomis chro- nograph, which compares the varying rates of accurate pendulum clocks with the much superior rate of vibrating ince the vibration of crystals flected by gravity, it is possible within the exceedingly small raction of error of the measuring de- vice itself, what the regular and irreg- ular effects of gravitation are upon pen- dulum clocks. in in evaluating the trend of foreign in- vestments is the part which the United States Government has played and will play. There has been an erroneous concept that the Department of State passes on the credit value of foreign bond issues. The fact is that foreign bond issues are submitted to the De- | partment of State only because that department must be kept informed of such large private deals, and is ready to object to such loans if they go to countries with which our relations are strained or if, on the other hand, the terms are so onerous that the country in question may become an enemy po- litically. Neither the Department of State nor any other our Government passes on the value of an investment in a foreign country. The “approval” given to loans is al- | ways negative, the terms being so couched as to avoid international fric- tion, not to advise the American in- vestor. These terms are usually that “the Department of State has mo ob- jection to offer.” One investment banker stated in an announcement that the loan he was issuing had been “approved by the Department of State,” with the result that he was called to Washington to explain, and was convinced that it would be wise to make public retraction. U. S. Help Necessary. Such are the elements of the correc- tion of the past and of the bases of the new era in Latin American investments. The need. of our help is great, and the value, properly supervised, is sound Bankers who discuss the issue, business men of long relationship with other business men in those countries, unite In proclaiming the moral Tisk excellent. Recently this has been proved again and again by hundreds of merchants and others who have scomned o take advantage of optional moratoriums. * dPu\urg in\-eslpmems in Latin America probably will not be, to any extent, in gn\-ernmem1 scc\érit:es f]o;a r;geir;exxeufs;‘; ‘The typical productive puhl)cyg-orks, which, like well planned highways, promise an immediate and continuous return in taxes on automo- biles and gasoline, or like irrigation dams,” port works, schools and certain other public buildings and sanitation plants, add to wealth and progress. Loans of this type can, and will, con- tinue and increase. Perhaps they will be carefully earmarked for such service and supervised by foreign engineers—a not_unnatural reaction to the mistakes of the past. But the great bulk of new loans prob- ably will be to industries. The indus- trial financing of the past has been through companies controlled in the | country from which the money came. These will continue, but beside them will inevitably grow up investments in the 4ndustries of Latin America itself. Such, at least, is the ideal. Invest- ments in Latin America will continue for two very definite reasons. One is that, with lowering money rates and lowering returns on_investments in the United States and Europe, the foreign bond or the share in foreign business must have its place in every portfolio | ed “sweeten- | of investments as a Propost ing.” The second is the realization that Latin America is definitely the field where our money, 8s well as our en- ergles and our machines, must serve in the building of an incubator of new wealth and new markets, ly to throw all clocks off by at | department or bureau of | | With the | has compa pendulum-reg; the crystal oscillators of the phone Laboratories been able to demon: the pendulum clocks gravitational pull of the periodic gain and loss in time caused the moon was found to cause a va- riation in indicated time of about tw millionths of a second per lunar d which is about two wee The extreme accuracy wi such apparatus can measure of gravitational attraction has chronograph Mr ed the acc L moon. areas of the earth where gravitational | ! attraction These measur yield many fes from other parts ements are expected to valuable secrets about th interior of the earth and the move- its of its crust. perhaps eve | possivle the prediction of nternational sailed last stigatios gra phenomena in the Caribbean area w use of pendulum apparatus op- rating on this principle and will take measurements from the interior of a | submarine submerged to a depth which | will insure relatively quiet water | time of the pendulums will compared with that of accur clocks on land which are regularly co; | rected by star obser In this work scie w ntific K expedi ex- v is co-operating and the time corrections will be fu nished by the clocks of the Unite States Naval Observatory. These are of the pendulum type, but they are corrected at frequent intervals by ob- servations of the fixed stars. Suct observations. in fact, give the time standard of the world. Navy Time. For more than 100 years the Navy has discharged the important duty of keeping the Nation's time accurate. The service, originated principally for mariners, has been increased and ex- panded to take in homes, offices, rail- stations and scientific expeditions. Time, accurate to a hundredth of a second, is now regularly computed and broadcast by the Naval Observatory, and at present the observatory is plan- ning a more efficient apparatus for the retransmission of time signals by way of San Francisco which may be the first step in the installation of a serv- ice that can be heard around the world The time service of the Naval Ob- servatory was described before the American Institute of Electrical Engi- neers by Capt. Frederick Hellwig, super- intendent of the observatory. He told of the new vault built at the observa- tory at Arlington, Va., which will house seven clocks especially designed for ac- curacy. These clocks will be main- tained in the vault undey constant temperature and air pressure in order to minimize the effect of changes in the weather. Coupled with these far-reaching im- provements in methods of measuring time has come a recent improvement in timekeeping apparatus available to home owners. Before 1916 no such thing as a synchronous clock was known, and even if one had been in- vented the irregularity of alternating current generators then in use would have made the use of such clocks im- practicable in the home. Since that time, however, a number of inexpensive synchronous clocks, reg- ulated directly by the pulses of the alternating current which _operates them, have been devised. How this development has come about was de- scribed in.the time symposium by H. E. ‘Warren, one of the pioneers in this field. Mr. Warren stated that more than 1,200,000 synchronous clocks were sold in 1930, and even more last year, Wwhereas 10 years ago these timekeep- ers were almost unknown. The secret of the accuracy of alter- nating-current house clocks lies in the master clock at the power house. Until these master clocks had been devised the variation in alternating current cycles was so great that keeping time by them would have .been out of the question. Now, in most systems, ‘the cycles are so closely regulated that synchronous clocks are often better timekeepers than the best spring- driven clocks. Increase in Borrowing. From the Hamilton (Ont) Spectator. i relations which have led up to the pres- |C BLIC LIBRARY “Tortured China.” In connection with the hostilities in Northern China and Manchuria, the Public Library calls attention to the fol- lowing books, which together trace the ent situation: Treaties and Leases. Treaties and Agreements With and Concerning China, 1894-1919, comp. and ed. by J. V. A. MacMurray. 2 v. 1921, JZ66.M22. fes and Agreements With and Concerning China, 1919-1929. Car- negie Endowment for International Peace, Division of International Law. | 1929. JXAR.1C22.v.2 Manchuria, Treaties and Agreements. | Carnegie Endowment for In!rlmt-l tional Pe Division of erna- tional Law. 1921. JXAR.7C22.v.16. | Jepanese Jurisdiction in the South Manchuria Railway Areas, by C. W. Young. 1931, JU667.Y88.v.3 International Legal Status of the Kw ed Territory, by C. | 7 31, JU6GT.Y88.%.2 Demands, Japan vs. Wood. 1921 The The by Sao-Ke Alfred Sze. 1926 sions on the international as- of the Chinese situation, the Guestion of extraterritoriality = and | China’s treaties Relations With Foreign Powers, ) Financial Control in China, by | HC66.0v21 n fina, b (Continued From Th writes down" entitled On Guard (Na culates 460,000 copies Army Press has 120,000 respondents who report to it ress eve Nearl; military training two million cow during a re tion. They we ent Bols a the parade peared at least 35 per ce ished. A whole suit of cls pair of shoes was a rar; artial music and sti the civilian marchers had a tired, list- less presence. Soldiers Well Fed. But the soldiers did signs of f90d r: 5 were spotless and of exce Their boots and belts leather, their eq | condition. Except which has been “declassc prived of citizenship as be ally and ale 21 j and soc regim every antagorn Servic the Soivet cluded. is made to pay f gigantic wa Since reorg in 1925, the been keeping i 000 soldiers. Russian Army averages one every 240 civili fet’s next-door uniform to every reader | it the subject spheres | | spheres of influence of interest I open door, concessions pendence 2 and | and Interests oughy. 1920 oughby of Johns in China JX WE86! Hopkins | to the | e war. He dge to com- ts conferred nts of an of igners and for- Foreign Righ pecial know ent of the 1 by s ahd agreeme cial character upon f elgn powers Con loughby reaties. resc i Sibe P lem e Open Door Doctrine in Relation to China, by Mingchien Bau. 1923 JUG6 B3380 An explanation of the “origin. mean- ing and application of the open door doctrine and . . . its relati n tegrity of China, spheres of influe the Chinese railways, Japan's special | and the international A R JX W rence 192 by | H86(¢ Sha: Cove stand tung A Re- Johns Hopkins U tember 17-20, 1 1925, JU66.CT6. China: A Commercial and Industrial Handbook, by Julean Arnold. (U S. Bureau of Foreign and Domestic Commerce.) 1926. HK66.Un3 | e China trade act of 1 \ded by the act of February n Trade of China, by C. F. 26, HK66.R28 and impartial ng he Powers, by H. K. Nor- the status of | na—the pecul- t Rus- Japanese and-t on | interested referee | olitical and Diplo- | P. J. Treat. 1928 | political and diplomatic | in Revolution, v of the Chinese Rev Leang-Li. 1 detaile the best books on which have appeared F. R. Dulles. v list Prog lonalist former Minister from | United States by H.F. James v of Political and ladelphia.) 1930. F6 of social condit pment, politics and for is, with some discussion of the problem in Manchuria and Mon- gclia. China: The Collapse of a_ Civilization, Nathanie] Peffer. 1930. F66.P344 The auth has sought to pre- sent the effects of a conflict of civiliza- tions in that country—the influence, in other words, of the impact of Western military power, economic invasion, in- dustrialism and ideas.” tured China, by 0. JU66.Ab33 book with & thesis. It says, in sum that conditions are so hopeless in China and give no promise of being anything there must be some sort of international intervention to because she cannot help Hallett Abend. Hawaii Chinese Buy Quarters for Consul ER——— HONOLULU, Hawaii—With lack of government funds to purchase a home and office headquarters for the Chinese consul at Hawaii, local Chinese residents are subscribing to a fund to supply such a building. They have already pur- chased a combination residence and office in_a semi-business and semi- residential section here. It is hoped that enough money can be raised shortly to_complete the deal. The Japanese consul general here has handsome official quarters and an adjacent large residence, but _the Chinese consulate has always been housed in rented quarters. Local Chinese, headed by the president of the Chinese Chamber of Commerce, felt that this situation was not fitting to the great new republic of China. It was then decided that a new building be bought and presented to the Chinese government. (Copyright, 1932.) Paying for Public Office. Our English cousins take occasion to criticize Americans because of the gen- erous amounts that some of our can- didates for office spend to secure nomi- nation and election. As a matter of fact, this system really originated in England, where it was at’one time quite the custom for an ambitious man to pay & large sum for the honor of rep- resenting his constituents in the House of Commons. In 1640 the member for Hastings paid the borough 20 pounds down and 10 pounds a year for his seat in the Commons. Prices rose rapidly so that in 1673 a man named Sprague offered the Borough of Dover no less than 300 pounds a vear to act as their member and in 1688 a baronet named Napper paid Poole a sum of 1,500 pounds. Things reached such a pitch that certain constituencies actually put themselves up for auction. Andover It is not at all surprising to read that more booke were borrowed from lending librares in 1931 than ever before. More g{)deyverymmz ‘was borrowed from every- was ready to return s members any two gentlemen who would pay 4,000 | ou a and Japan down to |9 litical the org: Trotsk To our enemies at M. Kaganovich that our army stror the farm workir oTe rgani: members members izatior, f volur more than ___(Continued From T! treated as outlaws authoritie Thus, the problem mitted to be an i the Nicar should cc No mat mi ance of stch [ tances true that ble policy, the toward El Salvador cause it confirms intervention That the good w American republics w ed by following t lous. Latin Am intervention, to th ence from outside affairs, ed here Only an with a few months Latin American member: STEAMSHIPS. to the masses and corner of the Sovie e Lenin's tomb in the Red Square at Mos- bleak-looking | except for the 40,000 trooy The run of civi were ipment that part of t pulati 11 by ¢ e policy of is cot ightest is too well known to be repe: ird Page.) to the Soviets, 3.000.000 members of ~ |the League of Communist Youth and is 4,000,000 pioneers. The leaders of this Strazhe), cir- army are 2,000,000 members of the weekly. ~ The Communist the best organized volunteer cor- proletarian par the world." prog- | There are basic disagreements be- is making in tween peasant and government over the t Empire governm ectivization program rsons The indus grievances severe the subject of the ever, the Soviet united country achieved this naticnal ly by impressing the belief that the ur of the country has solely in the inte passed hevist celebra- Tot readed ans ap- nt undernour- sthes or a new In spite of rring emblems, lext war,” government, hind it solidarity people rsal been u; of defense. dems have thy has 1t who a nas large- with the itarization dertaken success- pro- tire not This not show a Their unifor llent material of finest the best ince of foreign been ot atement ha viet s ) the T territ st carried remote ere is n not recite in that in commussar for de a general disar- t Genoa. ar programs he League of old what the v us T view of Soviet > immediate nei Latvia, Es ose armies, navies and ing to Soviet kes- financed, armed and offi- d by France.’ support contention to the its foreign policies f peace and not of imperial- Viet government points to a, While but -mutually s transactio; INew Policy of Unite In" Latest Cr is in San Salvador the Council of the League of Nations protested against the Japanese deman: that Japan be authorized to persecute Chinese bandits in_Manchuria.. They opposed the recognition by the League country to send troops police into anoth wifich such an au- have amounted to an he N op- I their D! dispatch 1 refel from Sa hat “custom a fiscal agen and force the to s pos he Governme es would send Ma collection of debts owed It did not say what exact- ie United States woul to punish the Salvadoran def: Of course. Salvador is not American republic rced by ¢ gravest ec n of modern es to tem spend payments on her foreign al obligatio Of cour have already t this is an ext insure the its citizens Rist all over the world to the conclusio ordinary emergency by force can they get where there is nothing to get But_even so, any one who remembers the Caribbean policy of the United he last 30 years, and partic- can. Haitian and Nic- episodes of the Roosevelt pe- and hears now of these Latin an defaults as a “matter of 1 will have to admit that condi- s have changed and that there is v a new Latin American policy in e State Department STEAMSHIPS. more equita- ude observed more 50, be ne of the Latin be more easils oppOS od interfer- their domest three sat ago, the who EUROPE ST. LAWRENCE SEAWAY Go this most direct Atantic lane. 2 days in sheltered waters::.only 3 to 4 days open ocean! Choose from 12 Canadian Pacific liners each one a distinguished ship in her classi 3 Fmpresses Economical huxury: 4 Duchesses Luxurious economy 5 Cabin Class Ships Tourist and Third Clagg..all ships Compare fares from home back home. 3 to 5 sail- ings weekly from Montreal and Québec (traing to ship-side) to British and Continental ports: ORIENT JAPAN . CHINA: MANILA - HONOLULU From Vancouver and Victoria Fastest crossing is via Direct Express _mtel Yokohama in 1Q days flat! 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