Evening star., 1931-12-23
The Moratorium.

1ne moratorium.
By an overwhelming vote the Senate
has ratified the Hoover intergovernmen-
tai debt moratorium, placing the fin
lShlng touch, so far as Congress is con-
cerned, on the legislation needed to
make the moratorium effective. Any
other course would have left the United
States in a position of acting in bad
faith. President Hoover last June pro-
posed to the other nations the suspen-
sion of debt payments. He took this
action at the same time that he OBJ
| tanned from congressional leaders Of both
the Republican and Democratic par
ties approval of the debt suspension
plan. Later total of 68 Senators
and 276 members of the House gave
their approval to the Presidents plan
for moratorium. designed, in the first
instance, to save Germany from a
| financial debacle which might have
had serious repercusSions in the United
States. The moratorium agreement was
| formally entered into by all the ma
tionS involved The United States Gov
eminent, because of a clause i'll the
| foreign debt funding law, could not
| give final consent until Congress had
acted. But virtually thS Government
of the United States had been pledged
both by its President and by ma
| jority Of the members of the two
| houses of Congress
President Hoover'S action in proposing
the moratorium, in the existing financial
| stress last Summer, was amply justified.
| The moratorium accomplished its pur-
pose and gave reinsurance to the world.
! The objection of France to the full
measure Of the moratorium originally
! proposed by the President was unfor-
tunate. But in the end. Frances as
sent. with some notifications which
appeared necessary to that country,
was obtained
Ever since the moratorium was pro-
posed efforts have been made in the
press and by opponents of President
Hoover to show that it was first step
toward debt cancellation. Debt cancel
lation is not popular in this country.
Nothing that President Hoover has said
in his moratorium proposal or his mes
sage to Congress has placed him in
favor of debt cancellation. On the con-
trary, the President has consistently
and from the first declared his opposi-
| tiOn to cancellation. declaring it to
be morally and economically wrong.
| That is the position taken by the
White Mouse today. But, the ad-
miniStration's critics contended, the
moratorium leads at least to debt re-
duction. Debt reduction Is no more nor
less than debt cancellation. There
is common sense, however in a
course which gives consideration to
the capacity Of the debtor to pay, and
that is the course which the President
has recommended, a course which has
been followed by the United States to-
ward its foreign debtors ever since the
beginning of the discussion Of the debts
growing out of the World War.
The Congress inserted in its resolu-
ton ratifying the moratorium q decla-
ration that 1t was against the policy OF
the Congress to favor debt cancella-
ton or reduction. That is the stand
taken by the President since the first
proposal Of the moratorium. A post
ponement OF debt is not cancellation,
If at the end Of the period Of the NOR
atorium next July nations find them
selves unable to resume payments of
their debts a serious situation will pre-
sent itself, which must be dealt with
then. They are on notice from this
country that there is to be no cancella-
tion or scaling down Of the debts. 1t
Is up to them to make preparations
during the present fiscal year to meet
their debt payments II there is a
clear inability TO pay, which Is very
different from refusal to pay, this
Government and the other governments
will of necessity take the matter under
advisement.
The opposition to the moratorium
resolution in the Senate, led by Sen
ator Hiram johnson OF California. a
bitter foe of the Hoover administration
was vociferous but small. With only
twelve votes cast against the resolution
the group nevertheless occupied two
DAYS of debate in the Senate. 1t had
originally been the hope Of the opposi-
tion to carry the resolution over until
after the holidays, with debate and
more debate. Fortunately for the more
orderly conduct of business, they were
unable to accomplish this purpose after
the House had acted so promptly.
English railway trains may seem like