Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-11-02
j. S. KEEPS ALOOF
IN DEBT REVISION
Place as Neutral Spectator
Maintained for Coming
European ParIeys.
ny CONSTANTINE BROWN.

by CONSTANTINE BROWN.
After having clearly indicated TO the
French and to other European nations
that the United States is greatly inter-
eSted In European problems only in as
far as their peaceful settlement is con-
cerned, the administration is now watch
ing furtder developments merely as an
interested spectator
Important conversations will take
place in the course of this month be-
tween the German, the French and the
British governments. The subjects taken
up VIII be OF both political and eco
nomic Importance. The administration
Is going to follow them very closely. but
is not prepared to take any active part
in them.
The problems which are coming TN
are exclusively European. and the inter-
ested nations are expected to be able
TO iron them out without any inter-
ference. In administration quarters the
feeling prevails that America has done
good deal since last July and has suf-
ilciently indicated the path to be fol-
lowed Tor satisfactory settlement, 1t
Is up to the European nations TO work
up some sort of an acceptable agreement
for them all
Hoover Policy Clear.
The most important and urgent quas-
ton is that Of Germany's financial and
economic position. President Hoover In
ms talks with Mr.. Laval has indicated
mat as lar as this country is con-
cerned, Europe Is free to resume the
application OF the Young plan. which is
an instrument signed and accepted by
all nations concerned in the reparation
question. The Hoover intergovern-
mental debt holiday has done all IL
could be expected to do. 1t saved Ger
many from bankruptcy last Summer
when the world was not prepared 70
face such a catastrophe
Premier Laval heartily agreed with
the President and on his return to
France on Saturday set in motion the
machinery for direct conversations with
Germany. II Is expected In Paris that
Germany viii agree to ask for an in
VeStlgation into her capacity to nav
both PREPARATIONS and the short term
credits due en- the 29th of February
ana amounting to more than q billion
dollars.
According to reports received from
Berlin 1t appears, however, that while
Germany does not see how she can
avoid asking for q moratorium, she Is
most reluctant to have another commits
sion TO investigate her economic and
financial situation. The German ar
gumem Is this: A commission to 20
thoroughly INTO Germanys capacity to
pay was appointed last Summer by the
delegates OF the seven powers who met
IN London last July and decided to
extend the short-term credits Germany
was owing America and other nations.
Recent Report Cited.
The commission, presided over by Al
pert n. Wiggtn CT the Chase National
Bank ana among whose members was
Mr.. +. Moreau o. the Banque de France.
mas presented a full and exhaustive re-
port on Germany's situation not later
than September this year. The Ger
mans claim 1t would be useless to ape
point another committee OF bankers and
econ. mlsts to investigate again Ger
mans situation at the present time
when this question had been gone into
thoroughly only two months ago. Mo-
Dody can imagine that the situation in
Germany has improved since Z, such
an extent as to Justify ! new inyest,ea-
ton. This would mean only an I'M
necessary waste Of time. when every
day brings Germany c.oser to baf1i.-
Tuptcy. The situation, according to the
Germans, is, II anything, worse than IL
was last Summer. Unemployment has
increased and the trade balance has not
improved Experts have diminished. In
dsSO Inc German exports totaled S3,4O0,-
100000. In 1881, up to September 1.
they were only $1,000, 0OO, 600.
Conse quently Germany desires i'm
meuiate action and not red tape inves-
tigs tions.
French Not to BE Rushed.
The French, on the other hand. don't
believe in hustling matters. They con-
slider that since the Young plan must
be restored In July, 1882 everything
must be done methodically, and the
commission provided for in the Young
plan must be set In melton before thew
can decide what Slashes may be made
in Germany's reparations payments.
without the report of q commission
appointed by the Bank for Interna-
tional Settlements at Basic 10 would Be
impossible to determine how much re-
duction IN payments Germany may be
allowed.
The American Government a naaanv
tanning q strictly neutral attitude IN
this matter. but two important Amarf-
can banking groups greatly interested
in Europe on account Of the large in@
vestments they have, principally IA
Germany, have two different points Of
view. The Morgan group, through the
mouth OF Thomas Lamont maintains
that Germany is in a position to pay
substantial part Of the PREPARATIONS
If she wants to; that GermanyS financial
troubles are not due to a large extent
to the separations, but to other causes;
that the German government has taken
sufficiently strong measures to straight
en- out its financial situation to be able
to continue to pay separations; that .
cancellation Of reparations would be
disastrous for the credits of all nations,
because 1t would mean the Reputation
of treaties and solemn engagements,
and consequently would shake the con-
fldence of all nations in accepted
treaties. This point of view is shared
to a certain extent by the administra-
ton.
Take Opposite View.
The other group, represented by the
Chase National Bank. of which Mr..
Wiggin is director, and the organi-
cations which are working with that
bank, believe that Germany is in a diff
fcult situation. which might crush her
unless some important and immediate
relief was afforded her Germany
signed the Young plan long before the
world depression had set in, at a time
when value of raw materials and manu-
featured products was much higher
than 1t Is today. and at time when
she had TO spend much less money on
insurance, Moreover. in
1928 Germany was economically on the
up grade and had not lost the great
amount of wealth which had been with
drawn during the three months OF
1anic which preceded the Hoover plsn.
Today Germany Is a much tmpover-
shed country as result of the world
depression and as a result of the flight
IF capital which has not come back