Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-01-15
PREPARATIONS HELD
DEBT SOLUTION KEY
Cancellation of InteralIied
Obligations Declared Contin-
gent on German Payments.
BY JOHN F. SINCLAIR.


prices seek their natural level, stol
artificial bolstering of prices, reduce
wages, reduce Federal capital gains
tax, keep markets open and prices
free!"
So advised Albert H Wiggin, chair.
man of the Chase National Bank, thu
worlds largest, to his stockholders.
Il have no sympathy with prlce-f1x'
ing palliatiVes whether employed by
governments or by trade combinations
which merely delay necessary ADJUST
ments," Mr.. Wiggin said. Il think that
the forced maintenance OF wage scales
at which labor cannot find employ
ment, does no good to labor or to any
one else Our depression has been pro-
longed, and not alleviated, by the de-
lay in making adjustments"
Mr. Wiggin thinks his suggestion Ia
voring the United States Government
initiating q move to reduce lnteraIleo
debts is good business" The European
press commented upon this phase OF
his speech widely. He said nothing
about reducing German reparationS.
Probably these were included by INFER
ence, for while German reparations are
not considered interallied debts, they
are part of the foreign debt picture and
cannot be ignored, when interallled
debts are being considered.
Problem Must BE SOIVeu,
To reduce or cancel interallied debts
without reducing the German repara-
tons would make the situation, If any
thing worse than it is.
Why should the United States cancel
or reduce the debts which France, Italy,
Great Britain, Belgium and other ma
lions owe without at the same time
having the allies write down, in the
same degree, the debt which Germany
owes to them? Otherwise, the United
States would be Shouldering the entire
cost Of the war!
Nevertheless, this problem will not
down. It's solution is holding back
business recovery. Many people who
watch the huge sums spent for war and
war preparation wonder why some OF
these items cannot be cut and the war
debts paid. But an external debt is a
far different thing from an internal debt
and the international debts are so top
heavy today that something must be
done about them before 1881 passes.
The candid statement of Mr.. Wiggin
should have the effect of bringing it
once more before the American people
as a major business problem which has
not been solved.
Harvard Economic Service.
William P. Everets of Boston, Har-
ward graduate student of business, has
been following, among other financial
and economic services. the one called
the Harvard Economic Service. The
name Harvard" is on the service.
And the cool discerning Mr.. Everets,
studying the different bulletins issued by
the service, is convinced that this serv-
ice has been entirely wrong during the
past two years." and wants to have
something done about it.
This influential bulletin, backed UP
by the prestige of the oldest university
in the East" he says, helped to push
the market up higher and higher and
made the inevitable crash so much
greater, and then helped to delay the
real recovery by ill-timed optimism"
Mr.. Everets goes on to say that this
service stated that a depression of the
type like the 1920-21 one was out of the
question. and that the depression would
terminate In the Spring (of 1890 or
that prices were already at bottom
(early in 1890
Charts were produced; plenty of data
and diagrams and all kinds of devices
reSorted to in an endeavor to show that
the work was scientific. Now Mr.
Everets believes that great harm was
thus done because It caused many peo-
pie 70 follow its advice and lose money.
Still, the Harvard service never was
anywhere like as optimistic in its state
economic services which sprung up
throughout the country, claiming to
be scientific and telling when and what
to buy.
The New York Journal Of Commerce
states the case this way: There is
not the slightest scientific warrant for
thinking that they (such seryices) can
make or ever successfully forecast COM
ing events and the time of their oc-
currence with accuracy
This Is pretty strong but many who
have lost money in the market follow
ing the suggestions of such services
agree with this conclusion.
Prophecy, up to 1881, always has
been dangerous luxury to indulge in.
Rail Merger Movement.
The failure of the proposed Great
Northern-Northern Pacific merger, due
largely TO the conditions which the
Interstate Commerce Commission laid
down with reference to the Burlington,
has thrown a dash of cold water in
the face Of the whole railroad merger
movement.
Never were the railroads harder
pressed than they are now. The bus
lines are cutting into their profits, from
both the passenger and the freight end.
Few economies are left TO be made
Farmers cry out for cheaper railroad
rates. so do business men in many
places. Many railroads-good ones.
too-are not earning their dividends
because both freight and passenger
receipts are away of"
Then what is the way out for the rail-
roads? Apparently, only by series OF
mergers which will cut oyerheads and
will allow in return a reduction in
freight and transportation rates. But
the act, allowing mergers, has been in
existence for 10 years! Nothing has
been done yet.
The railroad situation, as it exists to-
day, is an impossible one. II cannot &c
on. Railroad executives know it. and
many of the railroad labor leaders also
know it,
But. what's to be doneP Speed in ef-
fecting mergers is impossible. Gen. At
terbury of the Pennsylvania announced
the other day it would take years-noi
weeks or months-to work out the big
four railroad agreement in the East
But what is holding mergers back Il
the lack Of unanimity among railroad
leaders themselves, as well as the public
as to just how such mergers can bt
brought about Again the crying neec
is a far-Yisioned leadership, strong
enough to bring order out of chaos.
British Loan RumOred.
Is the British government about Il
negotiate a $500,000,0OO loan through
j. P. Morgan & Co?
It is Is years now since Great Britain
borrowed publicly in the American mar
ket At that time an external gold 81:
per cent loan was made Bonds total
ing $l43. 100000 Of this issue are still
outstanding. but are not cailable befor
their maturity in six years. These bond
are listed on the New York Stock Elk
change, have never gone below 1919
and have sold as high as 1918, witt
quotations yesterday around los.
No intimation, however, has beef