The Washington herald., 1922-01-23
American Aid Hinges on
Three Conditions, Say
Observers Here.
INDEMNITY CHANGE
NEEDED, is BELIEF
Administration Attitude
On DeflatiOn Reflected
In Statement.

NHSlheE Ine OHlleu obaeSS SOh-
sents or declines to participate in
the international economic confer
ence at Genoa, March s. American
aid for the rehabilitation of Europe
will depend upon Europe meeting
these conditions:
l. Dehation and balancing of
budgets.
2. Adjustment of Gsrman repara-
tions within the power OF Germany
to pay.
pense OF which is largely response
BILE for European imitation.
These are the essentiol factors of
the stabilization OF international
exchange set forth In q statement
issued yesterday by the United
State section Of the Inter-Ameri-
can High Commission While the
high commission represents North
and South American countries only.
and the European situation Is dis
cussed merely as a factor in sta
bilizing inter-American exchange.
the views of the section are par
ticularly significant because they
represent the attitude of the ad-
ministration toward the economic
problem OF Europe.
Imitation Must End.
"a review of Europe's situation
the weak, disturbed and unstable
storm center In international trade
and inance-draws US to the in
evitable conclusion that there can
be no stabilization of exchange
id q
cessation of imitation in the prin-
statement Imitation Is the result
OF unbalanced budgets, which them
selves are the result of the neces-
sary expenditures upon reconstruc-
tion, the unsettled situation of Ger
man reparations, tho maintenance
OF land armaments and tncreasing
debts. The disturbing forces are
indeed fpredominantly European,
snd-while Europe has made great
progress in agricultural, Industrial
social and political stability since
the war-the fiscal situation con-
tinues to disrupt exchange with
great severity.
Must Reduce Armies
The German government Is moi
by taxation: while other countries
are unable to mobilize enough tax
able resources to cover their ex-
penditures for reconstruction, for
military forces and other purposes
There can be no hope of sta
bility in the world exchange un'
TIL. in the first place, German
reparations payments have beer
nut upon a basis not only secur'
ing a definite flow of economic
strength into the just task OF re-
habilitating the devastated coun'
tries. but also calculated to bt
within the practical power of the
German people to pay.
Furthermore, 1t is necessary fol
economic stability that land arma
ment on the continent of Europe
should be reduced. Armies II
many states are of such size a:
TO necessitate continuing imitation
either through currency or shor
time bills. The economic loss II
nroductiyity of the nations is no
measured alone by the number o
men under arms but by the spiri
that surrounds the entire situa'
tion.
Russian situation Analysed
The situation in Russia and
Eastern Europe has also bear
inr upon the problem. The tota
EXTINCTION of economic productiv
itv in Russia from an export and
import point of view seriously de-
ranges the economy of Westerr
Europe The slow healing of thu
economic disruption due to tn'
creation of new states cannot ot
ignored.
Beyond this again, there arise.
the question Of domestic debt In
some OF the states of Europe. The
Increasing volume of these domes'
tfc debts under the pressure Of
unbalanced budgets makes more
and more uncertain the point at
which stability of values can be
expected.
Oyer.tocked with Gold
The washington conference or
the limitation of naval armament
"a a definite and positive step In
the only path that leads to com
nercial stability and its effect has
already been felt in the exchanges
of the world
Commenting on the flow of golt
to the United States the state
ment says:
..The situation in the United
states is unfortunate In that the
high premium on American ex'
change attracts to this country tbs
gold flow of the world We are
today overstocked with gold be
vond our currency needs The
surnlus earns no interest anC
a-,.s M useful purpose"