Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-07-14
DEBT PLAN DELAY
ADDS DIFFICULTIES
Situation in Europe Regarded
Worse Than Ever, While
Operation Still Ponds.
epsc,aI Dispatch TO The Star.

The financial world Is mystif1ed over
what has delayed the Hoover plan Tor
the postponement of war debt pay
ments. In Wall Street yesterday the
question was asked: Is 1t only another
"scrap of paper?"
When the announcement was made
that an agreement had been reached
between France and the United states,
the world was hopeful that all nations
were going to work IN good ialtn 10
cure the financial difficulties OF Ger
MANY. Nobody seems to know now
whether the plan is in operation or not
Apparently there was no definite un-
derstanding when the reparations holi-
day should start. All the important
nations but France says the holiday Is
in effect France says it isn't. The
European situation Is more muddled
than it was before Mr.. Hoover made
mis- proposal So much Squabbling has
developed over details that statesmen
seem to have forgotten the original in
tention of Mr.. Hoover.
The latest move of the American
President to straighten out matters IN
Europe appears to have revived all the
war hatreds between France and Ger
many. Instead of the guns of 1914,
however, economic weapons are being
used and they ale just as cruel and
ruthless. France refuses to help Ger
many with money unless the former
stops building battleships and ends her
trade treaties with Austria, and the
Germans say no German government
can make such humiliating sacrifices
and continue to rule.
Germany's position went from bad to
worse over the week end. One OF her
important banks failed, others had to
restrict payments to depositors, and
still there were no signs OF outside as
Gistance.
Germany at the beginning was enthu-
siaStic over the Hoover proposal and
believed that the United States would
extend immediate financial aid in the
form Of a large credit. No credit has
been forthcoming, and inquiry among the
important banks yesterday did not en-
courage the belief that any large credit
would be extended to Germany yet.
The Executive Committee of the Fed
eral Reserve Bank of New York held
It's weekly meeting yesterday and ad-
journed without making any public
statement in connection with the Ger
man situation. Washington intimated
that any credit would have to be ex-
tended by private banking interests,
which would be given free hand.
New York bankers apparently are
divided in their opinions as to whether
more money now 1t Is possible that
the banks heavily involved in Germany
would like to see a credit extended, and
those not involved hold different views.
Plainly. foreign bankers are little
dubious about the strength Of the pres
ent German government. They want
to know why Germany hasn't under
taken more drastic measures to pro-
tect herself 1t is estimated that about
q n 80 fal with lrox oil
from Germany were of German origin
that Is. the German people have been
turning their money into sterling, dol
lars, francs or other currencies. For
eign bankers do not feel like lending
Germany money if her nationals are
going to send it out OF the country
again.
It is thought that II the German
government had put restrictions on the
export of capital two weeks ago the
present crisis would never have been
reached. Directors of all the German
banks met yesterday and agreed among
themselves to limit payments to deposit
tors who want to draw money to send
abroad.
The German muddle is made much
worse by internal politics and an ex-
cited press. German political parties
are using the present crisis to suit
their own ends. The closing Of the
Darmstsedter und National Bank is
blamed on political enemies and attacks |
in the press.
Bitter assaults are also being made in |
Germany on foreign creditors who ex-
tended money freely to German Dor
rowers in the last five years and then |
suddenly demanded repayment Ger
many accuses the powers of raising her |
hopes by postponing reparations pay
ments and at the same time refusing |
financial aid.
The French are playing lone hand. |
They point out that they solved their |
own problems in 1926 without outside |
help and call upon Germany to bring |
about her own reforms. The delay by /
France in accepting President Hoover's |
proposal probably precipitated the pres !
ent trouble The French have not such |
a large stake in Germany as Great Brit |
ain and the United States.
And while France was arguing over
the details of the Hoover plan she was
withdrawing her credits from Germany
To make matters worse France has been
drawing down her balances in London
during the last few days and gold is be-
ginning to flow from London to Paris.
This has caused quite swing in Eng
lish sentiment to the German side.
German bonds were sold heavily yes
terday all over the world. The German
Government rs. the Dawes plan bonds,
slumped to a new low record of 895s on
the New York Stock Exchange for a
loss of 9 points. The German Govern
ment SIS and 5l2s, the Young plan
bonds, declined Ga points to a new
low record price of 623s. The Young
plan bonds we're offered to investors
of the world in June, 1880. at 80. The
total loan was s3o0.000.oo0, of which
about $99,000.000 was taken in this
country.
On July % the directors of the
United States Steel Corporation will
hold a meeting. and the results of their
deliberations will be of great impor-
lance to American workers. At that
meeting the steel men are expected to
decide whether they will continue to
maintain the present wage scale of the
corporations thousands of workers.
No indication is given that a wage
cut is contemplated. but If it Is put
through, it might result in similar ac-
ton being taken by other corporations.
Clerks of the Pennsylvania Railroad
for an indefinite period will have va
cations every Saturday without pay.
The American Tobacco Co. has
opened a new addition to its cigar fac
tory in Charleston, S. c., which will
eventually afford work for 1000 EN-
ployes The plant has been completely
fitted up with new machines for more
efficient production.
(CopyriEht. 1891. by. the North American