agers of the proposed investment group in America as follows: Investment Mobilization in America. (2) The organization in America of a country-wide investment group of banks and bankers; the managers of which, working in unison with commercial and manufacturing interests, shall (a) act in co-operation with the Special European Committee, and (b) co-ordinate the American investment public in broad plans for meeting the European situation. Such American group to act under the general approval of the United States Treasury, and American credit operations generally to function through this group. Recommendations to Congress. (3) To present the situation to Congress, in order to secure such legislation as may be necessary: (a) To grant total additional credits to any or all the countries in Europe of sums not to exceed $ on condition that any part of such credits as shall not have been availed of by January 1st, 1921, shall thereupon be cancelled. If Congress shall see fit to authorize such credits, that very fact will lead to greater activity and confidence on the part of American exporters, and will lessen the amount of credits requested from the Treasury. (b) To fund, without interest, for, say, three years, interest payments, due or coming due, upon obligations of European countries held by the United States Treasury. (c) To grant the War Finance Corporation power, within prescribed limits, to assume the risk of practically direct commercial credits against American exports. Educational Campaign Essential. (4) The organization of an active campaign of education for the purpose of acquainting the American public generally with the urgency of the whole European problem, the necessity for hearty co-operation in solving it, and for handling the situation in a broad and generous manner. To-day there is no real conception in America of the situation in Europe. Not only is the desperate character of the situation not understood, but there is no appreciation of the fact that America's destinies are in a large measure inseparable from those of the rest of the world. Complete knowledge of the situation here can be gained only through observation upon the spot. Sympathy, however, and desire for co-operation can be cultivated through the establishment of joint interests. If America comes to feel that she has in Europe an interest that is both material and spiritual, she will grow to have a more kindly understanding of Europe's needs and of the ways to help her. The practical workings of the League of Nations will be immensely stimulated if the citizens of America can persuade themselves of the wisdom of taking a close interest in the affairs of the European nations. Nothing is more certain, for example, than that, in case the American people grant credits on a substantial scale to the European countries, the close interest that will result will surely prove a great permanent factor in increasing the harmony and peace of the world. To this manifestly desirable end, education, in the broad sense of the word, is essential throughout the United States. No one, at the present time, can set that process of education under way so admirably or so effectively as the President himself. DOCUMENT 52. Confidential report (printed), June 4, 1919, from a Committee of Economists appointed by the Four Heads of States to report on Europe's requirements of food and raw materials, and the means of financing such supplies. This report was never seriously considered by The Four. MR. NORMAN DAVIS PROF. ATTOLICO for United States. for British Empire. for France. for Italy. having been appointed a Committee by the Four Heads of States to report on Europe's requirements of food and raw materials and the means of financing such supplies beg leave to report as follows: 1. They have considered separately the problems of the new states and Eastern Allies, of the Enemy States, and of the Western Allies. 2. In the case of the New States and Eastern Allies (i. e., the Baltic States, Poland, Roumania, CzechoSlovakia, and Jugo-Slavia), the Committee find that private credit will be inadequate by itself to provide the working capital necessary to restart industry, mainly for the two reasons, first that the credit of the individual firms is in itself not sufficient under present conditions to enable them to obtain large funds abroad, and second that, where the firms are in a satisfactory position to manufacture and market their goods, they are likely to receive in payment depreciated paper money which is inconvertible into the foreign currency required to liquidate the credits so obtained. Both factors hinder merchants or bankers outside these countries from lending on a large scale, and the second factor deters prudent and businesslike persons in them from incurring foreign obligations, even when they are in a position to do so, which they see no likelihood of being able to discharge out of the proceeds of selling their wares. Overriding all this are the two political factors, that most of the Governments are in an experimental stage, and general political movements rendering all credit uncertain are at least a possibility, and that, of the principal natural markets of these countries, neither Russia nor Germany will be in a position to purchase as before. The Committee, is, however, of the opinion that no lasting solution is possible which is not based upon a reestablishment of international trade on the basis of private rather than Government credit, and with this object they recommend that: (i) Each of the principal Allied and Associated Governments should seek out some appropriate method by which their own traders can be partially relieved of the credit risks of trading with these countries whether by an insurance scheme, by some Governmental or semiGovernmental body sharing the political as distinct from the trading risks or otherwise. There should be an interchange of information between the Governments concerned as to the progress of such arrangements. The Committee is of opinion in this connection that it is more necessary for Governments to share risks than to provide funds, the latter being within the capacity of existing banks. (ii) A currency reorganization should be carried through in these countries with a view to withdrawing all the existing issues of currency and replacing them by a new currency based on a definite unit of real value. The Committee is of opinion that the Governments of all these countries should, as a condition of receiving any further financial assistance whatever, forego absolutely the pre rogative of issuing currency or legal tender of any description for a period of not less than ten years. The committee is of opinion that if this currency reorganization is to be carried through it will be necessary for the principal Allied and Associated Governments to contribute a guarantee fund which might have to amount to as much as £80,000,000 to £100,000,000. It would also be desirable that the assisted Governments should undertake to pay over to the guarantee fund a proportion of their customs receipts or other revenue for a considerable period of years. The issue of such currency should aim at being as automatic and as much out of the control of the Governments of these countries as if it were actually composed of full value metal; and to secure this the issue should be under the control of some independent authority satisfactory to the Governments contributing to the Guarantee Fund. 3. Both of the above measures, especially the second, must necessarily occupy many months before they can come into effective operation. In the meantime provisional measures are necessary, mainly for the supply of raw material for industry, of tools for agriculture, and of means for the restoration of communications, without which there can be no employment. The Committee is of the opinion that for the immediate future a sum of from £30,000,000 to £40,000,000 might be adequate for the whole of this group of countries. They do not believe that this sum could be obtained through private channels, and, if provided, it would have to be by the Allied and Associated Governments. They suggest that it should be a condition of such supplies that no expenditure be incurred by any of these countries for munitions, except with the approval of the Allied and Associated Governments, and that unauthorized hostilities of any description should be followed by an immediate stoppage of supplies. There would be advantages in arranging that these supplies, so far as they were required for commercial and industrial purposes, should be made through private firms who should obtain the best possible security from |