The Dominion SATURDAY, JUNE 9, 1923. ANGLO-AMERICAN CO-OPERATION

Dominion, Volume 16, Issue 224, 9 June 1923, Page 6

The Dominion SATURDAY, JUNE 9, 1923. ANGLO-AMERICAN CO-OPERATION

It is an accepted truism that Anglo-American co-operation is o f the utmost importance as a safeguard and guair . • nations On the other hand, .the extent to which the English- peaking; nations are likely to co-operate in international affairs is at times the sublet of rather dubious speculation. the WashingIn suite of the initiative exhibited in connection with the wasni g ton OonfSnce and more recently in President Harding's advocacy of American m/mb«r s l.,p ol the World Court the " sections of the population of the United States admittedly tends o th ° Againstlis, however, there is to be set the fact that great forces are operating steadily to bring America more and more into touch with the rest of the world, and to link her fate with that of other nations. From a purely political standpoint, the ruling tendency of her people may still be to cling to a policy of nafclonal ; solat 2 or at all events to look doubtfully on each departure from that POI1 Developments in trade and finance are,-however progressively undermining the policy of isolation. America to all appearance is committed irrevocably to a policy of foreign investment and commercial enterprise. This can only mean that as time goes on she will find herself impelled more and more to take an active practical interest in world affairs outside her own territorial limits. It is an important phase of this development that necessary financial adjustments arising out of the war are bringing America into relations of co-operation with Great Britain which seem likely to pave the way for a broader co-operation between the two countries in international affairs. - The importance and significance of Anglo-American financial cooperation at the point to which ,it has been developed were effectively brought out by Mr. F. O. Goodenough,- a well-known British banker, in a recent address to the American Bankers Association at New York. The- Anglo-American debt agreement, Mr. Goodenough observed, might be regarded as the turning point in the discussions and negotiations relating to the general financial settlement after the war. It would, he added, “bring about closer co-operation between Great Britain and America in the solution of the different problems in which they were both deeply concerned, because of the similarity of their interests in the complex problem of international payments which would follow reparation and debt agreements.' As a creditor country, in need of foreign markets for manufactured exports, America seems bound to adopt the permanent policy of foreign investment which Britain has pursued for many years past. The conditions brought abouti by the debt agreement with Great Britain make it all the more necessary that America should adopt this solution of her economic problems. British payments of interest and principal must be made in goods. The Fordney Tariff, however, as Mr. Goodenough pointed out. ' is likely to exclude such of Britain’s manufactured goods as would, compete in America’s home markets. This may mean that a proportion z of the raw materials America needs will be paid for, in their various countries of origin, not in American goods, but in British goods. In these circumstances, Britain would be enabled to make her debt payments to America, but American export trade wduld suffer.

Assuming an increase in consumptive capacity, however, it may be feasible for America to maintain the volume of her export trade by lending a proportion of the proceeds to her foreign customers. An extension of the ,same policy appears to be necessary if America is to collect in whole or part the war debts owing to her by countries other, than Great Britain. Even if all these countries were in a position to pay, America could not by any expeditious process convert what they owe from external into internal assets. Neither could she take any appreciable step in that direction without contracting the foreign markets open to her exports. All the indications thus are that America, "partly from choice and partly from force of circumstances,” will adopt an enterprising policy of foreign investment. In that event, as Mr. Goodenough observed in his address, there would be a great community of interests between Britain and America.

Both would, have world-wide trading and world-wide investment interests, and both would be deeply interested in furthering world-peace and worldprosperity. The unsolved problems of reparations and international war debt offer obvious scope for Anglo-American financial co-operation. An agreement between the Allies and Germany is necessary in the first instance’. If that were once achieved, there canftot be any doubt that the conversion of a proportion of Germany’s reparation obligations into securities negotiable in the world markets would make for peace and stability. It is important to remember, as Mr. Goodenough remarked, “that Germany could not afford to default on a widely-held bond issue, whatever she might do in regard to debts held directly by the Governments of her late enemies.”

In the right conditions, an issue of reparation bonds would improve the prospect of substantial payments being made and continued by Germany. At the widest view such ait issue, in its immediate effect and as a contribution to the solution of the total problem of reparations and war debts, would make ror peace, stability, and the unimpeded development of world trade.

These considerations are likely to influence the future policy of the United States. Speculation and conjecture apart, actual developments in finance and foreign trade are manifestly operating to bring America into a new relationship with the rest of the world —a relationship which will give her a strong alnd increasing incentive to co-operate in international efforts to fuMher world peace and prosperity.