Evening star., 1928-09-30
EUROPE LOOKING TO i. S.
In WAR DEBT CRISIS
Flotation of $1,000, 100000 German Loan
Seen as Key to Solution by French
and British Diplomats.

all history Then all the American in
vestors who have already taken large
amounts of German bonds have a pat
ent interest in seeing reparatlonS not
only settled but settled at the lowest
possible figure, because these constitute
a prior lien on German assets. And
there are the American exporters. the
farmers and the industrialists alrKc,
who want to see German purchasing
power expanded. Last of all there are
the sentimentalists. who will be dis
turbed by the thought that America is
holding up the liquidation of the war
in Europe, and the politicians, who may
be influenced by the German-American
vote.
Europe Plans Campaign.
What is really going on in Europe is
the quiet organization for the great
campaign which is to be made on the
American front. when once we have
elected President and he has been in
augurated Moreover, in this CAM
paign every effort is being eXerted to
bring the former enemies into line.
There is firm conviction that the
whole mess may be more easily cleaned
up if Europe acts as unit. II they
can, the nations associated with us in
the war against Germany are going TO
bring the Germans into this new debate
on their side and. while the Germans
see the drift and do not like it. they
have not yet discovered any way out.
OF course. If the United States could
get $4,000 100000 in exchange for its
present debt claims, it would be getting
much more than any considerable
number of European experts ever be-
! lieved We should get 1t would in fact,
be very good settlement. although
nominally the British. French, italian
and Belgian debts stand on the books
at something like twice as much. On
| the other hand, what it all comes down
| to is that we are to lend the money
| by which we are to be paid. and that
| what we shall actually do is to ex-
| change the promises to pay which We
have from all but France for the single
German pledge. Our old debtors walk
| out and Germany walks in. And We
! have to collect--if we can.
| In all this maneuvering the Kellogg
peace pact has come as real and ur1-
expected blessing to the Europeans. 1t
gives them the obvious chance to say
that we. who are so eager to serve the
cause of peace by words. should now be
willing to translate our words into
deeds. We believe in peace, we want to
assist in establishing European peace.
| but the greatest present danger to
peace grows out of the reparations
problems and the resulting occupation
| troubles Europe has accepted our lead
| in sbolishing war; but has 1t not a
right to expect our aid in abolishing the
dangers of war?
I believe that it would be far better
to cancel the debts than exchange them
for German bonds. not because / believe
the Germans will deliberately issue
bonds which they mean later to repu-
diate, but because do not believe that
Germany can bear the burden Of a
foreign debt. which, with the repara-
tions account and the existing loans,
would certainly amount to more than
$4,000, 900, 900. And if We Cancelled the
loans the loss would be evenly dis
| tributed among the taxpayers. while II
| the investor loses the loss will be con-
centrated.
| The one thing which has been clear
/ from the start is that the nations which
were associated with us during the war
don't believe their debts to us have
moral justification, and they don't
mean to pay them. They are willing
/ to let the German carry the load.
But the German cannot now carry the
/ load. To pay us what his enemies owe
us in return for what We lent them
| to help defeat him. the German has
| got to borrow the money from us. And
! then. when that transaction is over, all
| the money involved will be what We
have put up.
American Aid Imperative.
! Meantime all the present European
talk about liquidating the war and set
| tling up reparations without the United
| States is. in the language of the street.
nothing more nor less than "the bunk"
There is only one person who can pay
German reparations or allied debts. and
| that is the American investor. And he
has been paying them ever since the
Dawes plan started and the debt settle
ments were signed All Germany has
paid her conquerors. and much more
besides, We have lent her. All the
allies have paid us, or at least the
largest part of it. is our money, which
the Germans handed on to them.
So far. then, We have paid repara-
tions and allied debts, and all the
present European program calls for is
legallzing the process and making it
direct instead of indirect. Actually the
process has not cost us anything, be-
cause the money we have lent has come
back to us. but neither have we made
any progress in collecting the debts. be-
cause. while the sum owed us by FlIro-
pean governments has been slightly re-
duced the amount owed us BY the
Germans has been more than proper
tlonately increased. But the allies are
not satisfied, because they know the
process cannot go on indefinitely. and
the Germans are equally dissatisfied,
because they are signing notes all the
time and are not getting either eyacua-
tion OF their territory or any limit put
! of them.
| So the situation resolves itself into
the fact that. while IL years ago Eurone
was singing THE Yanks Are COMING"
! today they are singing The Yanks Are
| Coming-Across." --Ae
tCopyriEht 1922