Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-10-11
i. S. READY TO CUT
ALLIES PAYMENTS
Europe, However, Must First
Promise to Put Political
House in Order.
Continued From FIRST Page,

A VII hoS a a6N'J
ing big loss to convert their holdings
of foreign bonds into cash to pay de-
poSitors. The same holds true with re-
srect to railroad bonds. That's why
the President is so interested in de-
veloping a revolving fund of $500 ,000,-
600 either through the new National
Credit Corporation or the proposed
Government Finance Corporation, pat
termed after the War Finance Corpora
ton, to take care of the railroad Sc
curity problem This is vital because
insurance companies and savings banks
have so many billions invested in rail-
road securities.
A relatively small fund and pledges
of Government cooperation in ref1nanc-
ing railroads next year when so many
bonds mature is expected to have the
psychological effect necessary to I'M
prove the whole bond market. The
latter is in effect Americas source of
long term credit and until that Is inn
proved a general Improvement in bust
ness cannot take place.
Mistakes Have Been. Made.
So the foreign and domestic situations
are interviewer and hence the announce
the bankers of the country by aSsur-
ing them of a better relationship be-
tween the United States and Europe
on war de BITS. 1t may be said that the
American bankers had no business lend
ing such big sums on short-term credit
to Europe, but the fact is they have
loaned 81 900 00o 900. and it is a condi-
ton and not theory that confronts
the President. So also with respect TO
slow assets in country banks. Mistakes
have been made, but the problem Is how
to prevent the greater damage that
comes from a Seepage in public conf
dence.
The debt question will not be settled
quickly. The President first must reach
an understanding with M. Laval on the
moratorium extension. 1t may be
that the decision will be TO forget the
moratorium and go directly to the prob
lem of revising war debt payments,
though members of Congress will I'M
questionably insist that a moratorium
of two or three years would be better
than any attempt TO revise war debts
on capacity to pay in a disordered eco
nomic world.
If Mr.. Hoover cannot get agreement
for an immediate conference to revise
debts, he no doubt will consent 10 mora
forum extension as the best obtainable,
sentiment in favor Of getting some re-
vision of war debts definitely under way,
50 it will not be constantly plaguing
the principal nations of the world and
their finances.
Must Put House in Order.
It is being made clear here that be-
fore there can be any revision of war
debts Europe must promise to put her
Lolitical house in order Relations be-
tween Germany and France must be
sonably assured. The United States
has no wish to decide. for example,
whether the Polish corridor should or
should not be returned to Germany.
but these European questions must be
settled by European nations themselves
before the United States Government
sees the wisdom of agreeing to a per-
manent revision of debts.
Such a collaboration between Euro
pean nations. however, will hardly get
momentum unless in the distance is
some goal which will appeal to the
peoples, namely, revision of tax bur-
dens Gables from Paris indicate that
Premier Laval fayors a so per cent cut
in annual payments on war debts and
% per cent cut in armament budgets.
This Is suggestive of the great impor-
lance that may be attached to the
forthcoming conferences of the heads
Of the governments of France and the
United States 1t means that within
the next month decisions of policy will
be taken to strengthen the foreign eco
nomic situation and in turn the con-
hdence of American investors and de-
posters in the soundness of their
financial institutions
(CopyriRht, 1917