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Show Foreign Loans American investors have lost millions of dollars in the purchase of foreign securities offered ioi sale upon the American market. The large financial firms or banks which sponsored these loans made millions of dollars in profits foi-acting foi-acting as the intermediary between be-tween the foreign borrowers and the American investing public. When the crash came, however. these investment bankers wore found to own a very small amount of the securities they had passed on to the Investing public. There has been some sharp criticism of the part played by the American Department of State in regard to apparent authorizations authoriza-tions of such security issues. "The State Department is morally responsible," re-sponsible," says Senator Glass, Democrat of Virginia, "for every dollar that is lost by Americans in foreign bond issues and every indebtedness in-debtedness that will not be paid. It has no legal right to express its opinion regarding them, and when It does so it takes upon itself a moral responsibility for the issue " While the State Department always al-ways disclaimed a,ny effort to pass upon the merits of foreign, loans as public propositions or to assume any responsibility in connection con-nection with such transactions it did follow the practice of informing inform-ing the American bankers that it offered no objection or was not in a position "to indicate that it perceives per-ceives no objection to the financing financ-ing " In 1922 the State Department requested American bankers to furnish it with the essential facts in regard to all contemplated foreign for-eign loans so that objection could be offered if the flotation of such securities was opposed to our own - national interests. In some cases where the State Department realized re-alized that there was some doubt as to the financial responsibility supporting the proposed loans, the Department made no public expression ex-pression of such misgivings. |