The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1931-07-15
SYSTEM FOR INTERNATIONAL
PAYMENTS THREATENED AGAIN
Young Plan May Be Strapped
Along With Dawes Plan and
Other Proposals

copyright, 1881, NEA Service, Incl
washington, July Is. HARD eco
nom1c facts again threaten to knock
down the international set-up under
which Germany pays r~eparations to
the Allies and the Allies pay off their
war debts to the United States.
First such facts forced this coun-
try to write off large portions of the
war debts through lowered interest
rates. Then they debated the gigan-
tic reparations bill which the Allies
charged against Germany. Next they
forced the scrapping of the Dawes
plan for German payments. And
now, two years from it's inception,
they seriously threaten the Young
reparations plan to the extent that
President Hoover has called for a
moratorium for a year on payments
OF both debts and reparations.
NO one ever questioned the legality
Of the debt OF r%eparation obligations.
Moral or ethical arguments against
collection were. in effect, laughed off.
But IN a world stricken by depres-
sion. the economic argument comes
more insistently than ever to the fore.
Abolition Of slavery, prohibition
and many wars have been brought
about by pressure of the economic
argument reinforcing he impotent
moral argument. And there are many
who believe that the pressure is di-
rected toward eventual cancellation
OF r~eparations and debts.
Trade Revival Only Hone
Congress is overwhelmingly op-
posed to debt cancellation, but the
world now faces the likelihood OF
debt and %reparation revision in the
near future. The one thing that
might head it off. it is felt here, would
be a real world business boom which
would put Germany back on her feet
and make practicable a resumption
OF international payments.
Calvin Coolidge, in answer to pleas
for debt cancellation, is said to have
replied:
well, they hired the money, didn't
they?"
The same orthodox viewpoint about
debt payments is expressed by Sena-
tor Byrnes of South Carolina, one of
the Democratic members with whom
Hoover conferred just before making
the moratorium proposal. Byrnes
says:
The fact that a government may
be unable to make immediate debt
payments offers no more excuse for
cancellation than in the case of an
individual who owes money. If the
only way to stimulate business with
our customers is to cancel their debts
We must revise some of our funda-
mental conceptions of credit and
business"
Considerable Cancellation
But in defending the Italian debt
settlement. which was regarded as
cancellation to the extent of 80 per
cent, Secretary Of the Treasury Mel
Ion said:
THE American producer needs
these debt settlements. The entire
foreign debt is not worth as much to
the American people in dollars and
cents as a prosperous Europe as a
customer"
Our d~ebt-funding commission held
that q foreign debtor must be per-
mitted to preserve and improve its
economic position, to bring its bud
get into balance, and to place its
finances and currency on a sound
basis, and to maintain, and if pos
sible to improve the standard of liv-
ing Of its citizens. No settlement
which Is oppressive and retards the
recovery and development of the for
elgn debtor is to the best interest of
the United States or of Europe"
World Depression Blamed
Such considerations as those cited
by Mellon and the commission, taken
with the fear of financial and DO
litlcal upheaval in Europe, led Presi-
dent Hoover to act. No one can tell
where they are going to lead IS be-
Tore we get through. The Young plan
vas expected to usher in European
prosperity, but the tendency has been
down into depression ever since.
The hardest economic facts now
uppermost are that Germany can't
pay her r~eparations bill installments
now because she has been so hard hit,
that the Allies are expected to pay us
only from what they get from Ger
many. that Germany has been bor-
rowing abroad consistently in order
to meet r~eparations payments, that
the borrowing process eventually will
end in default if continued. that her
only other means of payment-be-
U payments really have to be
made in commodities-lie in a huge
export surplus, that creation of such
an export surplus has become in
creaslngly difficult because of foreign