Evening star., 1931-06-23
DEBT SUSPENSION |
|. LIFTS WORLD HOPE
Government eratiHed by Fa>
VoFabIe Reception of
Proposal.
BY DAVID LAWRENCE.

Although . favorable reaction was
expected. the truth is the entire Gov
ernment here is pleasantly surprised by
the extraordinary enthusiasm which
mas been evoked throughout the world
oy President Hoover's proposal of q
holiday in war debts payments.
News that the security exchanges
everywhere rose materially, coupled
with the messages of appreciation from
business men everywhere, has sent
hopes sky high here again just as the
spirits OF officials anxious for an upturn
In business had sunk to despondency.
IN the wave of approval that has
come from the four corners of the
earth, ofictals here perceive something
more than was intended in the Presi-
dents statement, something more than
q suspension of war debt payments for
year. For 1t Is realized that If Ger
many cannot pay during the next fiscal
year 1t is unlikely that she will be
able In the short space of IL months
70 resume payments or to pay anything
on the year that will have been omit
ted.
Complete Review Expected.
Something in the nature of a re-ex-
animation Of the whole debt problem Is
confidently expected now, with the
~.AASSA A1VUoCo PAdyL1B d iIlOIG active
role and willing to make sacrifices only
II other nations are ready to do like
wise
The strength of the American posi-.
ton Is but dimly appreciated now
abroad. Heretofore when debt settle
ments had not yet been made, it was q
question of capacity to pay and the
United States refused to consider Eu.
ropean internal debts as having any
hearing 4 q 49,
should pay to America. Now, however.
with all debt agreements specifically
FUNDED over term of years, the uues-
tlon may well arise as to how, without
scaling down the principal, there NAV
be accomplished spreading of the
debt over longer than 81 years, posi-
bly, hundred. so the annuities may fall
with less weight on the taxpayers of
Germany and other countries.
U. s. Credit Secure.
The unexampled credit of the United
States is, of course, the basic factor
In what has happened. A postpone
ment Of $246, 900 900 in debt payments
10 America for year, indeed a cut
ting OF substantial sum like that every
year for five years until the world has
recovered from the depression, would
not make a dent in the credit of the
United States, for it has taxed itself
and retired nearly half of its debt in
decade-an extraordinary perform
ance in world finance
1t is not considered polite here to
discuss what the next step will be
whether calling of an international
conference of debts will be promised
for some time before the years holiday
expires or whether the nations will
merely postpone payments from year
TO year, depending on how conditions
appear toward the end Of the holiday.
The assumption is that now that
America has taken the initiative in
handling the debt problem and has
received such large support from both
political parties, it will not relinquish
the leadership and will gradually bring
about a better relationship between
governments on war debts.
Confidence Is Restored.
1t is hoped, too, that if better busi-
ness results from the Presidents move.
there will no longer be any doubt in
this country of the value of the argu-
ment that relie1 for the German tax
payer Is essential to world prosperity
and to the stability of European gov
ernments.
Already the increase in prices, due to
partly restored confidence, is many
times the sums that Germany is to be
renewed OF paying Tor one year and
many times greater than what the
United States will have to forego.
From all parts of the United States
messages are coming to the White
House telling OF changed psychology.
OF an atmosphere of confidence and real
hope. From abroad the communica-
tons are even more buoyant, for the
end is seen of the American policy of
isolation and the beginning of helpful
policy OF economic cooperation.
(Copyright, Ie3Il