Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-06-03
PREPARATIONS LOAN
PROCEDURE UPHELD
Lamont Declares Issue of
Bonds Was Legally Ap-
proved by Germans.
BY JOHN T. SINCLAIR.
Special Dispatch to The Star


Special Dispatch to The Star.
NEW YORK, June 3-Thomas w.
Lamont. in introducing Sir Josiah
Stamp before the Academy of Political
Science yesterday, for the first time
publicly discussed the charge made by
Representative McFadden that the new
PREPARATION bond issue was made under
duress." and therefore illegal.
Denying the charge categorically,
this Morgan partner said that not only
had Germany by a popular vote suS-
tanned the reparation issue. but that the
German Reichstag. its national legisla-
tive BODY, had approved the Young plan
and the issue of bonds.
In this connection, too Mr. Lamont
made a comparative statement of the
indebtedness of Germany. France and
England. Great Britain's total debt, as
result OF the war, amounts to $751;
100000, 900, that of France to S1S,500.-
100000 and the debt of Germany to
$1,000, 100000.
There is this distinction, however.
The German debt is all external. 1t
must be paid in gold or its equivalent.
1t deals with her foreign exchange. 1t
makes her more susceptible to world
influence. An external debt is much
more powerful and dangerous debt than
an internal one.
The debts of both Great Britain and
France. on the other hand, are largely
internal-that is, owed to their own
people. Such debts DO not raise foreign
complications. They can be paid in the
paper of the country and can be wiped
out by imitation, as the internal debt OF
Germany was wiped out after the war.
Mr. Lamont recognized this distinc-
ton in referring to the relative import
ance and size of the various national
debts.
Sir Josiah Stamp, speaking at the
same meeting of the Academy, prophe-
sled the day would come soon when
scientists and constructive thinkers
would give as much drive" to eco
Monies as they have to physics and
chemistry.
"The business leader of the future
must be more than practical man who
prides himself on keeping his feet on
the ground and possesses the theories OF
80 years ago. He must combine, In an
effective way, modern science and IN
dustry. Only the wise possess ideas.
Most people are possessed by them" Sir
Josiah said.
Then, speaking informally. with no en-
phaSis, he made this dynamic statement:
England has seen drop of 25 per
cent in the price level during the last
five years. Let England have a similar
experience over the next five years, and
neither the Young plan nor any other,
conceived at this time, could be car
ried out. Yet this subject is given only
casual mention by many"
But it was the high spot in the adj
dress of this world business leader.
The latest report of julius H Barnes,
chairman of the National Business Sur
vey Conference, is, on the whole, an
optimistic one.
Industry is carrying out its construc-
tive program announced last December,
credit conditions are improving rapidly,
capital issues are greater by 10. per cent,
the volume of non-reSidential building
is nearly up to last year and life insur-
apce actually shows an increase Of 6
per cent in the amount written this
April over April of 1929
But the basis Of the Barnes optimism
is this: /, large American industries
continue to carry out the construction
programs forecast last December; 2,
continued large capital improvements,
supported by large-scale financing, eV-
dence confidence in enlarged future
earning power and preparation for it;
8, in America and in Europe there are
evidences of increased reservoirs of ac-
cumulated credit, with consequent de-
creaSes in interest rates and resulting
benefits for production and distribution.
Comparing this year with last is
hardly fair, for the year 1929 was
probably the most prosperous year in
the entire history of the United States.
Now, take as an example the produc-
ton of automobiles for April. 1t is
467 900 units. This production exceeds
all previous Aprils except 1929, yet the
stock of automobiles in dealers hands,
both new and used cars, are reported
below the normal for this time of the
year.
Foreign shipments of cars in the first
quarter of 1880 declined As per cent
below the first quarter of 1929.
1t is in the field of foreign trade
where the real difficulties of American
industry center at the moment.
Except in the case of a few important
industries agricultural implements.
electrical equipment, motion picture and
utility issues, the common stocks of
most other groups have rallied little
from the panic low-levels of last No
Vember, announces Standard Statistics.
1t says: "a study of the individual
groups included in our composite weekly
index of 404 stocks reveals that only
half of the a claSsif1cations therein
included have advanced by as much as
10 per cent over the lowest levels re-
corded in 1929. Only five groups have
advanced by so per cent or more, while
10 subdivisions, including copper, mail
order, railroad equipment and sugar
stocks, are currently quoted at discounts
ranging from 0.06 per cent to 1873 per
cent from the extreme bottom prices of
1929"
The composite index of this service
on May 81 stood at about 20 per cent
above the level of November Is of last
year. If the five groups which show
the largest advances (woolens, motion
pictures. electrical equipment, agricul-
tural implements and airplanes) are
eliminated, the gain in the index would
be cut down to 14.3 per cent, or the
stock market level reached about De-
cember IL. 1929.
So, while much has been written
about the stock market coming back,
the real facts are that the market as a