Evening star. [volume] (Washington, D.C.) 1854-1972, 1925-12-31
ECONOMICS WIN OVER POLITICS IN 1925 POLICIES

policy Of resistance TO the depreda-
tons Of foreign InonopOlies, especially
in countries where governments in ef-
feet support such mOnopOlieS and in
products, too. which the American
consumer must have. The possibility
that certain prodscts may be held at
exorbitant prices has engaged the at
tention of Secretary Hoover of the
Department Of Commerce, who has
started little trade war of his own,
using the power OF the Government
to prevent loans 10 companies abroad
desiring to extend their mOnopolies so
as To hold the American consumer in
the palm of their hands. II is "a deli
cate problem. likely 10 irrItate Ameri-
can concerns affiliated with these
foreign monopolies, but the Govern
ment has felt an obligation TO inter
vene just the same. The American
dollar is travelling around the world
playing an incalculable part in the re-
construction history of the world in
this the seventh year since the
European war, but the Government
at Washington is determined that it
shall not be used TO assist govern
ments TO further eXtravagances II
their budgets are unbalanced or TO
further armament and unproductive
enterprise. when there are so manv
productive enterprises needing that
money.
BY and large. the debt settlements
which the United States has endeaV-
ored to negotiate during the past year
have transcribed in Importance any
single phase of foreign policy here,
but they, too, have been characterized
by less politics and more economics
than would be expected with such a
variegated political situation abroad
and at home. Basically, the United
States has believed that an advan-
tage to the credit of the whole world
lay In the recognition of the integrity
of an international obligation. No
nation could expect leniency, or con.
sideration even, unless such an ex-
plicit recognition were forthcoming.
The talk of reputation and cancella-
ton has to be thoroughly erased from
the minds Of all concerned. So the
foreign governments one by one in
various ways have come forward to
state their respect for the sanctity
of the contracts they made when the
American people extended financial aid
in the distressing hours preceding and
succeeding the armistice.
Capacity to Pay as Policy.
AS for the amounts that should be
paid, there a question presented it
self which from the outset of the ne
gotiationS was inescapable-the &C.
tual capacity of foreign countries to
pay their debts. On this indisputable
evidence was available. Capacity to
pay was a principle that had to be
adopted, not only as a measure of po-
litical good will among the nations of
the world, but as a sound principle of
economics in dealing with creditors
a n trc -to tn,
solvent. Indirectly the nations de-
pendent upon her to pay the cost of
the war stood financially embarra ssed,
too. America did not like the idea of
tying up payments to the United
States with payments from Germany
but the effect of the debt settlements
which have been made Is neverthe-
less to accomplish that very thing.
Europe Is slowly but surely ap-
plying the Balfour plan of collecting
only enough money from creditors to
pay off Indebtedness to the United
States. The receipts from German
reparations in future years may, Of
course. be higher than at preserA in
dictated, but the general impression
now is that in the end only such sums
will be transferred as will meet the
debt requirements of America This
may make America unpopular and
, may even make the course Oh iIlIeT-
national trade and exports somewhat
disturbing from time to time, but
again the f1exibility of the American
Government may come into play.
u. S. as Collector.
The United States will not continue
a rigid collector If at the same time
such process diminishes the oppor-
tunity of America to do business with
creditor countries. It's a question of
economics that is sooner or later going
| to require vital decision. but as with
! the Dawes plan, 50 the American
debt settlements are designed to meet
a situation this year, and they can be
modified IL necessary when the occa-