The Washington times., 1931-07-23
REICH FUTURE
CLOUDED BY
DANGERS
FutiIity of Respite Feared
in Capital; Extension Of
Moratorium Held Certain
BY GEORGE r. HOLMES

Administration quarters today
over the conclusions of the seven
power ministers conference in
London, but at the same time
there is undisguiSed anxiety for
the future.
Germany has been snatched,
temporarily, from the brink of
bankruptcy. That is recognized
here, is virtually the sole &C.
compliShment of the highly-touted
conference, the first of its kind,
since Versailles, in which the
United States has played a lead
ing part.
Disaster has been temporarily
averted by freezing" Germany's
international credit situation.
Foreign bankers who have
poured millions into Germany
during the past few years are to
leave those millions where they
are. 1t proves a breathing spell
in which further measures to af-
ford more permanent relief may
be studied.
Diagnosis, No Treatment
1t is also recognized here, how
ever, that the basic ailment Of
the Reich, while diagnosed, was
not even touched upon or treated
by the ministers. That ailment
is reparations.
The Hoover moratorium Of
June 20 relieved Germany Of
playing the major part of her
reparationS accounts for one
year.
The ministers conference has
virtually extended that repara-
tionS moratorium to cover Ger
many's commercial Indebtedness
to foreign bankers, so that the
combined result of the events of
the past month is to give Gec-
many an all-around credit breath
ing spell for the critical months
ahead.
Fall Farley Certain
In that time it will be demon
Strated whether the Reich can
come back" to the extent of re-
assuming the burden which has
been temporarily lifted from its
shoulders.
That there will be another con-
ference in the autumn or this
winter is generally conceded here.
The way in which the situation
has been left virtually neceSSi-
tates exchanges between the
powers over any new develop
mentS.
German finance has been put
under an international micro
scope, there to remain for a long
time to come. Meanwhile. Ger
many must carry on the difficult
task of putting her financial house
in order under the watchful scru-
tiny of the entire world.
Not only governments them
selves will be watching her, but
private bankers in every country.
U. S. Technically Free
From a strictly American view
point. there was satisfaction ap-
parent here today over the fact
that the conference passed with
out the American representatives
becoming embroiled in action af-
fecting the allied war debts.
Technically speaking, the Amer
lean position that there is no re-
lation between reparations and
war debts is still undisturbed.
The way matters stand today,
Germany theoretically will re-
sumo reparatiOns payments next
June and the allied governments
will resume their annual payments
on their indebtedness to the
United States Treasury. Actually,
however, there is scant prospect
of this becoming reality.
No one in authority in Wash
ington believes Germany can re-
cover sufficiently during the
years breathing spell to reas-
sumo the burden. There are pes
simists who doubt she can come
back at all, some who believe the
debt holiday now afforded her
merely delays the inevitable col
lapse.
Extension Inevitable
Thus it becomes apparent that
when next June arrives there
will be extension of the mora
torium for another year, so fa1
as governments are concerned
Whether the bankers who have
approximately $1,200,000,000 in
short term commercial credits in
Germany will be agreeable to
waiting longer for their money
remains to be seen. About halt
of that $1,200,000.00O is Ameri
can money.
The critical question for Ger
many is whether she can main
tain interest payments on heI
commercial indebtedness abroad,
If she can, the bankers will con
tinue some faith in her recovery.
If she can't, it Is likely the
bankers will fall over themselves
to salvage what they. can.
Developments. during the criti
cal months ahead will tell, the
story. No one in Washington
today was willing to predict what
| it will be,