The Washington times., 1931-07-21
HOOVER URGES INTERNA BOARD TO STUDY REICH WO
u S. Proposal
For ReHef.O
Germany

Ine ICJL OF kHS AUbGTtCuU PFC
posdl as transmitted to Londo,
tolloUs In part:
"The essence Of the problem
is the restoration Of confidence
in Germany's economic life,
both in Germany and abroad.
"On the political side, the
United States hopes that,
through mutual goodwill and
understanding, the European
nations may eliminate all fric-
tiOn 30 that the world may rely
upon the political stability Of
Europe.
"On the economic side, the
present emergency is strictly y
short term credit crisis. Funda-
mental pressure upon German
economy during the period Of
depression has been relieved by
the joint action Of the creditor
powers in SuSpending all pay
mentS upon governmental debts
during the period Of one year.
Credit Basis Sound
But Germany has financed
her economic activities to q
very great extent through the
medium Of short term foreign
credits. There is no reason to
doubt the SOundneSs Of the
basis upon which these credits
rest. But the general uncer-
tainty which has prevailed for
the last week resulted in such
a loss Of confidence that the
German banking and credit
structure was subjected to a
severe strain.
Present New Paramount
"AS to external credits, we
believe that the first approach
to this problem is the develop
ment Of a program that will
permit the maintenance for
an adequate period of time of
the present outstanding lines of
credit.
In this connection, it is our
understanding that this volume
Of credit together with the
freed reparatiOns and the
natural gain from the alIay-
ment Of the panic should be
adequate to meet the needs of
German economic life for the
immediate moment.
"On the other hand, it must
be apparent that, unless pro-
vision is made for the mainte.
nance of these credits, an at
tempt to provide new ones,
whether of = short or long term
character, would be ineffective.
I'm the development of such
a program. the governments Of
the countries having principal
banking centers, including the
United States, Belgium, France,
Great Britain, Holland, Italy,
Japan, and Switzerland, and
other important banking cen.
terS, might well undertake to
encourage their bankers SO to
organize as to permit the
maintenance for an adequate
period of time of present-day
outstanding lines of credit to
Germany.
New Confidence Seen
at is our belief that If such
a program could be made
promptly effective it would re-
suit in an immediate restOra-
tiOn of confidence and that in
q comparatively short time the
necessity for restrictions Of this
character would disappear and
normal conditions would once
more prevail.
There is all the more ground
for faith in such q result in
view Of the fact that the
United States debt-Suspension
program has now become effec-
tive and that the events which
succeeded the announcement
Of that program clearly demon
Strate that relief from payment
Of intergovernmental debts
established In the minds of the
business world the basis for
renewed confidence.
Committee Suggested
"a committee should be sc.
lected to secure cooperation ON
the following question:
"(a) In consultation with the
banking interests in the differ
ent countries to provide for the
renewal Of the present volume
Of outstanding short term cred
Its from those countries.
"hl In making an inquiry
into the immediate further
credit needs Of Germany.
"(c) In the development dur
ing the course of the next six
months Of plans for a CONVEX
sion Of some proportion of the
short term credits into long
term credits"