The Washington herald., 1922-10-17

of the annual payments for q few
years In order to promote economic
stability, then there needs be
demonstration of the facts in re-
spect to each individual country
that would be convincing to the
American taxpayer and t. Congress.
The taxpayer will naturally need
conviction that such posponemen
would bring returns to him and
would really mean such genuine
stability as uid warrant such
a sacrifice. I.e would naturally
consider that there are other things
of vastly larger dimensions than
the postponement of $3.50. 900 900 a
year which must march in advance
secured TO Europe.
For economic stability requires
that there must be such political
and economic readjustment between
the states of Europe as will bring
about an atmosphere OF peace in
replacement of an atmosphere Of
war. There must be rearrange-
ment of economic boundaries of
Europe that will give the hope Of
economic survival OF states which
can be saved by no financial opera
ton OF any kind. There must be
reduction of armament not only
as a guarantee of peace. but as
a contribution to the balancing of
budgets and the cessation of infia-
ton. There must be a general in
tent to create good will and peace
ful working conditions among the
nations to their own reconstruc-
I'M ~ NJ
renee of political crises which so
narrowly escape war and so sadly
disturb commerce. All these things
OF Europe. They would also as
loans, for the burdens on Europe
which these loans impose are triv-
ial in comparison with wastes and
mated by ecorbmic progress of
the above forces.
Dealings With Europe.
"Fifth-America has dealt with Eu-
rope during the past few years in
terms OF idealism. We have al
ways given; we have never re-
ceived- No one can deny that we
are capable Of great sacrifices and
of great generous charity. We
want to take part in making a
better world. but It must be clear
that sacrifices and charity from
a merica do not themselves bring
about a cure for those evils which
now gnaw at Europe's economic
life. What the American people
would do in the circumstances that
the forces of real economic stabIl-
ity were put in motion, could easily
be determined when the time comes.
Our record to date has been one
of helpfulness.
Current discussions as to the in
ability OF the countries on the con-
tinent to meet payments OF these
debts have revolved upon the work.
ing of intricate economic forces
In arguments advanced that the
loans must be cancelled or further
the claim is seldom made
that the payment of interest can not
be provided out of taxation or re-
duction of expenditures in the
debtor country and payments made
in the local currency of that coun-
try. The contention is that such
currency must be transformed into
goods or gold in order to be shipped
to the American people. The argu-
ments against payments nearly all
bear upon the difficulties that this
implies. and in them
there are a large number of assump-
tions.
Assumptions Cited.
These assumptions include: That
the only method by which payments
can be made In international bal
ances Is through the shipment Of
goods or gold: that these shipments
would necessarily be direct from the
1ebtor country to us: that such
shipments might embarrass our in
and employment: that the
capacity OF q given country to pay
obligations 10 depend
ent upon its ability to produce a
surplus of goods for export over
and above its necessary imports;
that present trade balances should
be taken as an indication of future
paying power. It appears to me that
the whole of these assumptions as
to the relation OF debt payments to
US to the movement Of goods need
10 be seriously modified, for there
are other large weights in the in
ternational balances.
THE settlement Of international
balances between America and
Europe contains factors that are In
their volume unique in International