Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-07-09
DOMESTIC c.REL|EF
CONFRONTS HOOVER
President Against Tariff De-
bate-Works on Plan
for Debt Disposal. .

Stimulated by the remarkable response
which President Hoovers war debt pro-
posal evoked, there have been all sorts
Of suggestions for a follow-up step Of
some kind either In domestic or foreign
policy which should improve public
psychology and establish confidence In
the business future.
The suggestions range all the way
from the legalizing of sales Of alcoholic
beverages to the formation Of large cred
IT corporations backed by the Govern
ment TO handle the second mortgage
problem OF the country and revive resi-
oence building. The politicians are ex-
changing publicity thrusts on the sub
lect OF the tarth. Senator Robinson of
Arkansas, Democratic leader, thinks the
President would do well to announce
q revision Of the tariff, but Senator
5moot. Republican, chairman Of the
finance Committee, wants, q bill of
particulars as to how the tariff should
be revised
What Mr.. smoot has in mind IL
craving fire from the opposition so
mat II specific schedules are named
the republicans can rally to their side
tne industries which would be affected
by revision downward.
Tariff Cut Unlikely.
AS matter Of fact no tariff re-
vision by Congress is contemplated.
The Democrats will plead for II, know
ing full well that the Republicans viii
not permit 1t. President Hoover u
known 10 hold the view that nothing
could unsettle business more than to
reopen the tariff question in Congress.
He thinks the Tariff Commission should
pc entrusted with such changes as
nave become necessary through the
variation in costs of production. His
answer to campaign speeches on the
tarin will be that the commission AZ
now set up can correct tariff In
equalities.
But for the moment the Democrats
are lnsHtent In their clamor for tariff
the introduction Of bills In the Decem-
Der Congress TO change certain sched-
ules especially sugar. The White House
mas been flooded with schemes and
proposals OF all kinds to stabilize busi-
ness ever since the depression started.
the war debt suspension was forced BY
the emergency in Germany.
IL was under consideration for many
months, but the President did not
think he could command public sup
port II he took the initiative last NAV.
Encouraged by Reaction.
Encouraged by the reception which
DIS action was given MI Hoover is
now OF course deeply involved in the
whole war debt problem, which Will
Jake the better part of q year for
discussion and negotiation and it Is
for the handling Of all the war debts
Is likely to be proposed before the war
debt holiday comes to an end
IL is assumed here that the .sp~.H
plan VIII involve a commercializatio3
OF the governmental debt so that tl19S
Will be distributed in the hands of the
pubic very much as were the private
debts incurred by the governments dur
ing the early days of the war.
various suggestions along this line
nave been made during the last decade.
notably one by Bernard M. Baruch of
New York, who was in charge Of the
negotiations of the original economic
clauses OF the Versailles treaty. Mr..
Baruch thought that first Of all the war
debts had to be scaled down and then
they could be hoated at low interest
rates especially If all the governments
agreed to take the present cash value
OF their debts.
Expect Hoover to Lead.
This means that instead of waiting a
half century for the principal to be
paid and collecting interest throughout
successive generations, each govern
ment would make up its mind as to
how much 1t would take in cash for the
amounts owing to 1t. In this way total
amount OF reparations and war debts
would be reduced. the tax burdens of
all countries would be diminished and
the war debts would be converted into
bonds held by the public but guaran-
teed by all the governments concerned.
Such move would not be accom-
plished In one fell swoop as the security
markets Of the world could not absorb
the entire amount at once. Probably
81 DOC, 900 900 worth of war debt bonds
would be distributed throughout the
world ut intervals of six months under
a plan whereby the securities could be
absorbed without dislocating the money
markets Of the world.
The Bank Of International Settle
mentS In Switzerland provides the ma
cnnery Tor the execution Of such q
plan. Indeed most of the experts on
reparation matters have felt that sooner
or later the war debts would be COM
mercialized and 1t Is only a question
OF whether Mr.. Hoover on behalf of the
United States Government can assume
the leadership in such a gigantic op-
Grafton. 1t Is one Of a number Of
things being discussed in the hope of
putting the economic situation Of the
world on more stable basis.