Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-11-08
BY DIR. MAX WINKLER.
Special Dispatch to The Star.

Special Dispatch to The Star.
NEW YORK, November THE resig-
nation Of Jose Maria Marulanda, Co
lombia's minister of finance, may be at
tributed to his insisting that Colombia
emulate her neighbors and suspend pay
tons chief executive Olaya Herrera. is
understood to favor prompt maintenance
of debt service, irrespective Of the sac
rifices which the country may be called
upon to make. With more than $780,
100000 invested in Colombia by Ameri-
can interests, the suspension OF pay
ments by the southern republic, If re-
sorted to, will not be viewed with in
difference in the United States.
The expansion, or even the main
tenance, of the commercial relations
between the United States and the re-
public of Colombia will depend I'M
doubtedly upon the evidence Of Ameri-
cas- southern neighbor to honor con-
tractual obligations, and to respect the
rights and privileges of creditors; upon
the honest and sincere efforts on the
part of Colombia to abandon unsound
economic policies and introduce order
into her financial house, and last, but
not least, upon the willingness of Co.
lombia's creditors in the United States
to cooperate with the republic in
SplI1C Oh lElcllululcSS dIu equality,
rather than one of hostility and superb
GRITTY.
Cooperation Needed.
Once there is definite evidence of gen.
uine cooperation between debtor and
creditor, the prospects of a return of
confidence and normality in the econ
o-nic status of nations will be much
more promising.
To be sure, one is not unmindful of
the many errors which have been COM
mitted by both borrower and lender
within the past few years; nor is one
unmindful of the sincerity with which
such mistakes may be assumed to have
been made. The fact. however, remains
that Colombia permitted herself, or
was permitted, to accumulate debt,
the full service of which, under pre-
vailing circumstances, constitutes a de-
cided burden upon the nation.
United States investors are appraiS-
ing Colombia's credit in the American
market at 20 to 35 cents on the dol
lar. Such Is the discount at which
are quoted the various obligations of
the republic, her departments, her
municipalities and mortgage institu-
tions. Is it not somewhat inconsistent
If one expects 100 cents on dollar
DldCGQ III NO1OAlAbAdp OAAO Ae$eOSA .
creditors put value on it of only one
fifth or one-third? This situation
doubtless is due to fear on the part of
American investors that Colombia may
cease payment on her contractual obli-
cations altogether.
AS it is within reason. to assert that
Colombia does not wish thrown against
her the stigma of default and as the
country's creditors are just as anxious
for Colombia to maintain her good name
and prestige among the nations OF the
world, it would seem that there is only
one path which Colombia can choose.
She must do her utmost to continue to
nav interest on her contractual obliga-
tions with the promptness and punctu-
ality which have characterized her pol
lev for many years, and II temporary
aid is required it should be extended,
as was done in the case of number of
European debtors. The United States
owes that much to her neighbor, unless
she feels that the dollar invested in
Europe is more sacred TO american
Iorobia. If it should not prove feasible
to aid the republic at a time when aid
is most needed, it may become neces-
carv to permit Colombia to pay, with
RESPECT to her debt, whatever she may
he able to do without completely under
mining her economic structure, but no
change should be effected until the
question of capacity is definitely deter
mined.
Sinking Fund Payments.
Colombia's creditors might, however,
make one concession and thai is an
agreement relative to the suspension OF
ali sinking fund payments for a period
IF Ave wears, with Colombia reServing
the right to resume amortization at an
earlier date. The nations creditors
might further arrange for Colombia'S
fiscal agents to utilize amortization
finds. in the future, for the purchase
Of bonds In the open market, rather
than, as seems to be true OF many Co