The Watchman And Southron

PERMANENT CHARTER FOR FEDERAL BANKS

President Welles of Bankers Association Discusses Federal Reserve System and Farm Credit Problems

Los Angeles, Cal., Oct. 5--Error on the side of moral fairness and economic reasonableness in the settlement of war debts rather than terms that would prove unduly burdensome on debtor countries was advocated here today by Oscar Welles, president of the American Bankers Association in the president's address before the opening session of the annual convention of the organization.

Mr. Welles advocated a permanent and unlimited charter for federal reserve banks and discussed problems of financing the farmers and credits at home as well as abroad.

Bankers above all others realize the necessity of looking into the ability of the debtors to pay, Mr. Welles told the convention. They have learned, he said, "the value of appraising the liquidating power of those who pay be in default or who may be suffering from debt depression. The principle here is the same, and, if I may take the liberty of interpreting the attitude of this group, I would say that though we feel that our government has been practical, broad-gauged and liberal in dealing with our debtors in the matter of these debt settlements, our influence will be exerted in favor of a policy of making such terms as may be necessary in order that the sums to be collected may not be burdensome beyond the ability of the debtor countries to bear. We would rather err on the side of moral fairness and economic reasonableness. One would need the vision of a prophet to undertake at this time a forecast of the outcome of this perplexing situation. It is not strange that the issues involved in it continue to afford opportunities for public opinion to occupy itself.

"There is yet the troublesome element of assessing the reparations and fixing the extent of their influence upon the various inter-government claims and obligation. Among the considerations to be given to the final understandings, upon which a settlement must rest, are those involved in tolerance, sympathy, a mutual faith, and confidence in the purpose of both of the contracting parties. Unless the populations of the various countries are actuated by such principles of mutual regard for the viewpoints of those with whom they differ the settlement will not be made on the right basis. It is to be deplored that some symptoms have already presented themselves as reflecting a spirit of critical suspicion concerning the righteousness of our position. Even so, when difficult problems need solving we should abstain from developing the habit of finding fault. No enduring agreements can be made through acrimonious debate and, being the creditor nation, we dare not ignore the greater responsibility for making a program that will include no more than is practically obtainable and at the same time is compatible with an early return to normal economic relationships. This would be in keeping with the circumstances under which America entered the war. Nearly one-half of all our exports are sold in Europe which accounts for our interest in the restoration of the purchasing power of the European countries and the maintenance of accustomed trade relations. It is conceivable that impoverishment might easily prove to be more costly than debt adjustment."