Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-10-12
Everybody's
Business
Further Aid to Eurofean
Nations Should Assist
Materially IN Shortening
the Period of Depression.
BY DIR. MAX WINKLER.

Special Dispatch to The Star.
NEW YORK, october 12.-Those
who are of the opinion that re-
Mobilization in order to be genuine and
lasting will have to be worldwide, and
not merely confined to one country,
have good reasons to be optimistic.
Following the announcement OF a
plan designed to assist the situation in
the United States, President Hoover
intinates that he is ready and willing
to extend aid to the rest Of the world.
While still opposed to cancellation of
intergovernmental obligations, the Presi-
have no desire to attempt to extract
any sum beyond the capacity OF any
debtor to pay and that whatever
changes will be made in the future will
be based upon such capacity.
Capacity to Pay Varies.
There Is, however, certain fallacy
in the capcity-to-pay theory. 1t IS
subject to constant change. The
capacity to pay tomorrow may be very
different from what it is today.
Brazils capacity, for example, to meet
obligations, with coffee quoted at 20
capacity when coffee is quoted at 6
cents. When tin prices are depressed
Bolivia's capacity is greatly reduced.
The same applies to Cuba, whose princi-
pal standby Is sugar; to Chile, which
depends chiefly upon copper and
nitrate; and to numerous other so
called one-product countries.
Furthermore, the changing price
level exerts also a very marked influ-
ence upon European debtors. 1t appears
that in order to overcome this difficulty
a body might be created, composed of
representatives of creditors, debtors and
neutral parties and charged with evolv-
ing a so-called prosperity index, which
would take into consideration all factors
pertaining to the economic and finan-
cial conditions of the respective debtors
and upon which would be based the
nature Of payment.
Gold Standard Rumors.
Europe is needlessly alarmed over
the monetary situation in the United
States, and is withdrawing funds on
an increasingly large scale for ship
ment to Holland, France and Switzer-
land. The result is that the dollar in
Amsterdam is worth only 1886 cents:
in Paris SO cents, and in Zurich 965
cents.
RumorS about the United States con-
templating abandoning the gold stand
ard are absolutely without the slight
est foundation. Estimates place the
total Of short-term balances held in
the United States for foreign account
at not more than $750,000,000. Even
if the total is recalled. the Federal Re-
serve System would still have an ade-
quate cover for notes and deposit LA
bilitieS now outstanding. Little dam
age is, therefore, expected to result as
far as American institutions are con-
cerned from Withdrawals.
On the other hand, the transfer to
certain foreign countries whose supply
of gold, while adequate, is not unreal
sonably large, may cause serious en-
barrassment to the money centerS as
we'll as to the creditors, in the event
that the latter should demand their
funds simultaneously.
Railroad Fund Rumored.
There is serious talk in financial
circles that Congress may be prevailed
upon to set up fund to aid the rail-
roads in reflnancing activities. as was
done during the war, when the rail-
road administration made large loans
to the United States transportation
systems. Whether this move. even if
it were taken at once, would suffice to
help insurance companies and other
institutions holding railway securities,
is highly problematical.
Nevertheless, something is confident
~ expected to be done on behalf of the
roads in the very near future. Outside
of a possible increase in freight rates.
which is expected to be made on a
sliding scale, 1t is believed that re-
volving fund will be created which
would enable the roads to borrow for
the purpose of meeting maturing obi
cations and purchasing equipment.
A decline Of less than per cent in
the u. S. Steel untitled tonnage for
September is regarded as distinctly
satisfactory even though the total is
the smallest reported for any Septem-
Der in more than q decade.
During the past 10 years declines in
the September tonnage were registered
only twice, in 1925, when the shrinkage
compared with August was about per
cent, and in 1927, when the loss was
approximately per cent? Last year
the gain amounted to per cent, against