The Waterbury Democrat., 1931-06-20
Movement Is Started
 To Protect Germany
 From Economic Crash
Hoover Calls in Democrat Leaders for Consultation Great Britain Much Interested in the Help for Germany

From one high quarter, however, it was learned that readiustment of Great Britains debt was one of the proposals being given serious consid- eration.
 More than half decade ago, Lord Balfour told the world Great Britain would scale down its de- mand for German separations in proportion as its debts were cut. Britain, he said in effect, wanted from Germany only enough to pay its own creditors. Thus, if the Hoover administration cut Britain's debt, that country could ease the reich's staggering separations bur den.
 Great Britain funded its debts to the United tSates earlier and on less favorable terms than any other European power. The final debt agreement called on Britain to pay $4,426,O00,000 (billion) as compared with $3,S65,000,000 (billion) from France. So high is the British in terest rate that of its payments up to November IS, 1880, $1,017,360.- 900 (billion) went for interest ana only $174,O0O,000 could be applied to reducing the debt.
 Thus, it is pointed out, the United States could save Britain millions of dollars each year merely by cutting the interest rate on its loan, leaving the principal untouched. Some ob- servers believe popular objection to reducing interest would be far less than to lowering the principal. But any meddling with war debts. 1 observers here are convinced, would strongly affect domestic politics. That, they believe, is why MT Hoover called in such men as Senator Glass, democrat, Va; Senator Walsh, dem- ocrat, Montana; Senator Bingham. republican, Connecticut; and Repre- sentative Bacharach, republican, New Jersey, to advise him on prob- able congressional and popular reac- | tion. Even change in interest rates would require congressional sanction.
 Another method of aiding Ger many - immediate and practicable without congressional authority - was suggested in second quarter. The Federal Reserve banks, it was said, might tide Germany over her present financial crisis, aggravated by withdrawal of short term credits and a drain on the reich banks gold. by allowing Germany a substantial credit here.
 It was recalled that about five years ago, when the stability of the British pound was threatened, a. $500, 000, 900 credit was advanced to the Bank of England. The psychol- ogical effect was so great that the British weathered the financial storm without drawing a cent from their American account.
 If, it was suggested, similar credit were advanced the Reich bank, it probably would halt the withdrawal of short-term credit from Germany by private bankers. Perhaps none of the money would be used. But, an American official pointed out, such a credit, would bullwark faith in Germany's finan- cial ability and ease the strain on her own resources.
 | MT Hoover's avowed purpose to aid Germany is in itselr regarded as an immense psychological boost to a discouraged nation.
 Germany's present obligations. coupled with a recession in trade and increased unemployment since adoption of the Young plan in 1930 have placed the nation in d sad con- dition. Of its total separations -- estimated. with interest until 1888, at $26.000, ,000,000 (billion) - Ger many will have to pay S3S7. .000 900 this year. German budgetary ex- perts believed when the Young plan was drawn up, that amounts of this size could be paid. They did not reckon, however, on the world de. precision.
 Since 1928 Germany's wholesale price level hos declined 20 per cent; the general volume of production has dropped 25 DOT cent; imports have fallen off 90 per cent. Even worse, unemployment has Increased until now 5000. .000 Germans . fourth of the working population nre without jobs.