Evening star., 1931-12-23
SAYS CUT IN DEBTS
WOULD AID TRADE
Government Bond House Be.
lieves in SIashing Foreign
Obligations.
BY CLAUDE A. JAEGER,

NEW YORK, December 23.-Eco-
Homlc nonsense leads to economic ex-
tlnction, asserts c. F.. ChidS & Co, one
OF the oldest Government bond houses,
III its investment bulletin.
In this connection, it points to the
spectacle of nations restricting imports
and making strenuous efforts to increase
exports This, the firm says, leads ul-
tlmately to the cessation of interna-
tlOGal trade
Pointing to the United States surplus
ot goods which must be sold abroad. the
1fn urges a more liberal attitude in
the matter of both tariffs and inter-
governmental debts.
Allied Obligations.
1t recalls that as long ago as 1926 it
stated Our production. both in agri-
culture and III industry, exceeds even
the capacity Of our great domestic mar
ket to consume. There is a surplus,
anQ to dispose Of this surplus we must
reach markets abroad, which means
having purchasers abroad with money
and credit to buy"
CharaCteri2ng the so-called allied
Clal, the bulletin continues: Political
cebts interfere with the payment of
commercial and individual debts These
opposing factors lead directly to the
broakdoWn OF the worlds credit syS-
tenn"
The company asserts that the United
states was to a large extent repaid by
the large profits on goods sold to the
9llled nations on the credits extended
during the war, 1t recalls also that
England Cancelled most of the debt
Cue her from her continental allies fol-
lowing the NapOleonlc wars Again.
following the World War and prompted
by the wisdom OF experience, England
oitered to cancel reclprocally the debts
cue her for the benefit of her country's
trade
We, too, should now recognize the
fallacy, as well as the cost to our busi-
ness and commerce, Of counting any
longer upon the collection of allied
pOlllCal debts. The termination
or reduction of political war debts and
tariffs would Immediately stimulate
trade and industrial activity and there
would be no need for unemployment
ocles or contributions"
Regarding the current situation in
Europe, the bond house says: Germany
4-AoI 44Idht SAFES ABROAD IN OrQer 10
make her debt payments. We raised
our tariff and other nations followed
our example to prevent such sales. She
had to sell in the worlds markets at
prices so low as to reduce her purchas-
Ing power Of foreign products AS her
CTedltS abroad were reduced her neceS-
sltE to sell abroad was increased AS
commodity prices declined more prod
ucts had to be sold to produce an
equivalent amount of credits.
Situation in Russia.
For identical reasons. Russia, with
limited credit, must double her sacri-
fees and sell more goods abroad to
obtain the necessary credits to purchase
her requirements. Nations which chiefly
object to and suffer from the depreSS-
ing effects of that course of action
are the nations which have created and
primarily are responsible for the in
eVitable and prevailing developments.
The United States IS now suffering
because its foreign customers are in
distress. We cannot insure a perma-
rent increase in our prosperity without
sharing it with other nations One
nations gain does not mean another
nations loss
persistence in the thought that the
United States can permanently prosper
regardless of conditions in the rest of
the WCrld or that we alone can emerge
from economic depression is lunacy."