DUTCH SEE HOPE

Evening Post, Volume CIV, Issue 4, 5 July 1922, Page 13

DUTCH SEE HOPE

OF. AMERICAN AID FOR EUROPE

The report that the American Stat« Department has approved the participation of Benjamin Strong, of the Federal Reserve Board in the proposed conference of representatives of emision banks has been received with great enthusiasm here (telegraphed The Hague correspondent of the Now York 'limes on 29th April).

Commenting on this decision the Amsterdam Telegraaf says that the' United States is beginning to wake .up to-the fact that a policy of disinterestedness ill European affah's is not satisfactory. For the European nations which are trying to extricate themselves from the present impasse, it continues, this small ray of hope is, a real consolation. But the Telegraaf Temarks that expectations regarding America's co-operation. should not be too sanguine,, especially' so far as the exchange question is concerned, since such expectations are not justified by the general tendency pf the American international financial policy for the last- few years. America, it says, refused to participate in the Genoa Conference, while she has taken only a slight interest in financing the world's commerce.

"Some years ago," the editorial continues, "the Federal Advisory Council objected to participation of. the Federal Reserve system in foreign valuta transactions, while private banks which aTe incorporated in the reserve system, although actively interested in valuta operations, are now gradually desisting from them. The Federal Reserve system established several foreign branches: in the course of the war, -which, however, have never shown remarkable activity. This all indicates a certain indifference concerning an international financial policy." The Tclegraaf asks : "Will the future also prove hopeless ? Will America persist in her splendid financial isolation? There is unnecessary pessimism on this point because America must now consider various factors which oppose a continuation of the present policy of economic and financial isolation.

"These factors may be defined thus: First, the danger of inflation caused by America's present financial policy, which increases her gold surplus; second,«the danger of higher prices caused by a mistaken gold monetary policy, culminating in possible inflation, but still more through a high protection policy; third, investment interests embodied in American holders of European valuta values, •who are thus directly interested in Europe's economic reconstruction; fourth,American exporters' interests, which demand the re-establishmeht of the buying power of their European clients.

"The restoration of the gold standard and the stabilising of the: international monetary system are vitally important to American foreign trade, being one of the most essential reasons for- American co-operation in, the reconstruction of Europe.

"As the factors mentioned are of the utmost significance, owing to the universal interest involved, they "will possibly be instrumental in making America change her policy. For, the" moment, however, neither Congress nor public opinion is ripe for sudden, radical changes. We are perhaps on the eve of a new era, but European countries should live up to the motto.: 'Help yourselves and America, will help you.' " ~