The New York herald., 1922-01-29


tress in trade conditions.
Again. If the international debts re-
main as an unpaid and unpayable
mortgage on the future of human in
dustry. there will be no return to
President Harding's "normalcy."
Thirdly, Russia with her horror on
the Volga, her industrial degeneration
and her standing Red army, must be
given economic aid subject to drastic
conditions including rehabilitation OF
Red soldiers and Red propaganda, or
there will be no chance OF recovery of
that great trade which formerly flowed
In and out of the Russian Empire, as
part OF the life blood of many peoples.
Now as regards German reparations
the super-irritant OF Europe-it Is
well to write plainly. even at the risk
OF offending the strong and sincere
sentiment Of loyal people. and am
going to do so. taking that risk. 1t Is
impossible at the present time for
Germany to pay the full measure Of
the indemnities imposed upon her
without financial bankruptcy. That is
the opinion at best of many British
and French financial experts. who are
economists and not politicians. 1t IL
possible, that at some future time. in
fifteen or twenty years, Germany
might be able to pay more easily If
her industrial life is progressive in
energy. was convinced during a re-
cent visit to Berlin that Germany's
impending bankruptcy Is not fraudu-
lent. in spite Of certain dishonest tao
ties. 1t Is true that many big indus.
trial and financial people are evading
income tax and smuggling their money
out Of Germany.
Germany Overtaxed.
But 1t Is also true that the main
body of the German people, including
German workingmen, are taxed to the
utmost limit, amounting to 38 per cent.
on small incomes. 1t is certain. be-
yond any doubt. that II Germany is
forced to continue reparation pay
ments according to the old ruling of
the Supreme Council and its repara-
ton committee, so that when every
payment became due she has to buy
foreign money with German marks
the English pound sterling when I was
last in Berlin a few weeks ago--the
mark will slump still further until it
reaches something like 1000 to the
English pound. Now this means two
things. 1t means first Of all that Ger
man industry can only exist on star
walton wages-the slave labor Of Ger
man people-and second. that the pro-
ducts Of German labor will continue to
undersell American and British goods
in every port of the world
It will also mean that II Germany
defaults. as she is bound to do, France
will exact new penalties, which may be
just, may be entirely mercenary from
the French point Of view, but will keep
an open wound in Europe and prevent
any healing spirit of peace. 1t Is the
United States chiefly which must make
the decision upon this problem. France
has already decided. She will wait
until Germany defaults. and then exact
her new penalties, securing her hold
on the left bank of the Rhine. Great
Britain has also decided. but Is not in
position to enforce her decision
against France. She has decided that
it Is better policy for herself first,
and for Europe generally, to allow
Germany some abatement to encourage
her industrial revival to the point
where the mark will rise in value and
not undercut all competitors. and to
wash out hatred and vengeanceA-even
some claims OF Justice itself--for the
sake Of the peace spirit in Europe.
America Could Decide.
The United States alone in the world
has the power to decide. because into
whichever scale OF her balance she
throws the weight Of her influence that
side will prevail. But, as far as ]
can make out. the leaders and people
of the United States are not ready to
make a decision as regards to inter-
national debts. Every financial expert
in the United States and Great Britain
with whom ] have talked, and I have
talked with many. is in favor theo-
retically, of a complete wash out" all
round
This Is not due to altruism or ideal
ism on their part. but to a conviction
that 1t would restore a more healthy
economic state In the world, help to
balance budgets and lead to a renewal
Of world trade. Their only objection
to the plan is the present impossible
ity Of persuading politicians and peo-
pies that It Is good business and
common sense. I am not at all sure
that the peoples are not ahead Of the
politicians in coming to this view
which sooner or later will and must
prevail.
As regards Russia have already
written my belief that she holds the
key OF the world situation. II by i'm
posing conditions such as the demobil-
ization of the Red army and the aboli-
ton OF revolutionary propaganda a
combination OF Powers agreed to give
her economic aid there would be a
rather rapid revivai--outside tho fam
inc area--of n great market for
manufactured goods and of a great
stcrehouse OF raw material which the
rest OF the world urgently needs. The
Soviet Government must be recognized
and modified. There Is no other way
OF bringing Russia back into the COM
mon veal.
TIE Genoa conference will be a.
ghastly failure IL It refuses to recog-
niZe the plain facts which have ven
tured to state with brutal simplicity.
And IL the Genoa conference fails It
Will be the failure OF Europe to adopt
"a