Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-07-26
BY WILLIAM HARD.
Special Dispatch to The star.

Special Dispatch to The Star.
All the hens in the international
political barnyard are clucking loudly
In the neighborhood Of the German
nest at this week end, but the news
paper correspondents are having a bad
time trying to find the eggs.
After q month Of heroic effort the
Germans have fewer nest eggs, In the
way of working capital, than they had
last Spring. The supreme test OF their
position Is the going market value OF
their 1880 Young plan reparation bonds.
That Is the daily actual clinch1ng big
news of the development OF German
economic salvation.
Bonds Under so.
The Young plan bonds we're sold in
this country last year at 30. In the
early part Of this year they were still
at 81. When the Hoover debt move
was begun they were still above 10.
They are today below co.
That is the true conclusive opinion
OF Wall Street regarding Germanys
present financial health.
Moreover, a new patient has been
added to the hospital. That Is Great
Britain.
There is more talk today in quiet
but really informed quarters about a
new loan to Great Britain than about
a new loan to Germany.
The daring Hoover debt move gave
Germany during this current fiscal year
some $4,000 100000 of public capital
which otherwise it would not have had.
simultaneously much more than that
amount Of private capital fed from
Germany.
Treasures Try Cure.
Governmental treasures have been
trying to cure the world, but have not
so far succeeded IN making private capl-
tai incur sacrifices for the cure.
Now private capital Is taking gold
out of Great Britain.
The gold supply Of the Bank Of Eng
land has fallen below the minimum"
established as the "dead-line of dan
ger" by Lord Cunliffe. This last week
the Bank of England lost SIS, 5000 900 of
gold. It lost 1t largely to France, but
also in considerable part TO other
European countries. F1ocks Of airplanes
have carried gold from London to Paris.
Wall Street now contemplates the
possibility Of q reassuring loan to Lon
don. It imagines that possible visit
Of j. P. Morgan to London at this week
Gnu may VIC aOOCA4ACo W - N~A4OpSHANS NAS
cussion of such loan.
The stability of Great Britain is I'M
questioned. Germany is thought po-
litically internally precarious and there
fore financially externally dangerous.
Great Britain Is regarded as a self
righting boat which politically inter-
nally will succumb to no weather what
soever, and, which financially externally
will repay every penny placed upon 1t.
Britain Close to Situation.
Some bankers even take the view that
the best way to finance Germany Is to
finance Great Britain and to let the
British, who are much closer to the
matter and who know much more about
it, handle it.
There is almost universal recognition
now of the fact that the financing OF
Germany is a much more vital under
taking than was supposed at the time
when President Hoover first made his
debt move. At that time the idea was
simply to save Germany for world pros
perity. Now the idea is that the saliva
ton of Germany is necessary for the
salvation Of capitalism itself in Central
Europe.
Figures produced by the Central Bank
Of Germany have convinced the states
ulCIl dI dAAu dA1o d110 w dO11AIl6~
ton that Germany Is q virtually decap-
italized country.
Those figures show that Of all income
acquired by Germans in Germany only
4 per cent comes from returns on in
vestments. In this country the returns
on investments are several times that
percentage of the national income.
Capital AstoundingIy Little.
In other words, we have much capital
to put into investments and the Ger
mans have astoundingly little. Hence
their enormous need of new foreign
money.
Hence also the anti-capitalistic char
acter of the overwhelming mass of their
industrial population. We are rich in
small investors" Germany has Vir-
tually none. Our Small investors" pro-
duce among us a multitudiness con-
servatism. Germany's almost total lack
of small investors" produces in the
German industrial regions a multi
tudinous radicalism.
In the German Legislature more than
one-third of the members are Socialists
or Communists. At the other end of
the legislative chamber from them are
the so-called Extreme Conservatives, /"
the so-called "FascistS." These "Fas-
CiSCS, however, also call themselves
National Socialists" They also even
call themselves the National Socialist
Workers party" In order to attract
workingmen they demand the "sociali-
zation," the Naturalization" the gov
ernmental ownership and operation, Of
all thigh finance"
If you add together the Communists
and the Socialists and the National
Socialists" you have much more than
a majority Of the national legislators
of Germany. They cannot be reelected
without continuous appeals to anti
capitalistic sentiment.
Problem Is Capitalization.
The bitter problem Of the capitalistic
world d TO put new capital into an
antt.capttaiistac country In order 70
change It into q conteute0' pEo.captbal.