Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-07-13
REICH AID BENEFITS
| EXPECTED TO LAST.
Further Steps Seen Needed,
With Emergency Relief
Stage Passed.
BY MARK SULLIVAN.

AS respects the United States, one
immediate interest in the European
situation is whether the beneficial
effect on the world wide depression
brought about by Americas recent
step about Germany may be relied
upon to continue. The Judgment OF
the best-informed persons answers
Yes" with practical unanimity. The
same judgment is careful to point out
that the crisis in Germany was merely
the most serious of the recent aspects
of the depression and that many others
remain to be remedied or to right
themselves. There is complete conf
dence that this will be done.
In the meantime. it is recognized
that the rescue of Germany calls for
some further steps. In spite Of re-
cent almost hySterical dispatches from
Germany, it is felt that financial re-
lief TO that country from this stage
onward has less need of the haste that
accompanies emergency. Germany's
financial difficulties will be solved. The
coming extensions of a further helping
hand to Germany must be accompanied
by actions of self-help on the part OF
the German government and people.
Germany's pending plea is for more
money in addition to the financial
relief already achieved by the post
ponement Of intergovernment debts.
Such money would come from official
or semi official financial institutions
in France ard Great Britain, and in
America chiefly from great private
banks. These lenders will act in I'M
derstanding with each other.
present phase of the understand
ing. held as strongly in America as
in France ard Great Britain. is that
prior to or simultaneous with further
extension of financial relief to Ger
many the German government and
German financial institutions must
themselves take steps to help the
country's financial and currency diff
culties. One such step is that Ger
many must arrest the flight of Ger
before other countries send new CAPT.
tai in. For Germany to do this is
difficult but nevertheless practicable.
Measures Held Practicable.
The recent stress of the German
Reichsbank was caused in part by the
withdrawal OF foreign capital. 1t was
caused in at least equal part. however,
by German individuals and corporations
who, in alarm about the stability OF
their own country, sent some of their
capital dDTOdQ 10 oNlIZclldIO, tilC
United States and elsewhere.
The alarm about Germanys future
that accounted for this flight does not
now need to continue. So far as meas
ures originating with the German gov
eminent and Reichsbank are necessary
to stop flight of German capital, such
steps are practicable and have been
adopted twice within the past 10 years
with effective results. There might still
remain a certain amount of bootleg
ging" Of German capital out Of the
country. but the amount would be in
considerable. In any event. there Is
common state of mind among the po-
tential lenders of capital to Germany
to the effect that the latter country
must take vigorous steps to keep its
own capital at home. A Germany do
ing business largely on borrowed capt.
tai while much of its own capital runs
away and hides in foreign countries
would not be wholesome.
About another condition to be lived
up to by Germany there Is similar
unanimity amoig the governments anG
financial institutions from which Ger
many is asking financial help. This is
that Germany shall not use either the
new money or its own money for new
expenditures on armament. The Ger
man RON6TIlU1eI1J UNDERSTANDS lIllS. IL
was, indeed. partly an express stipula-
ton and partly an implied one preced-
ing the postponement of Germany's
reparationS. That any country bene-
fitting by the postponement should not
use the relief for increasing its arma-
ment was clearly understood.
Loans for Arms Discouraged.
The condition applies even more
strongly to the money Germany is now
trying to borrow abroad. Even apart
from the attitude of the French, Brit
ish and American governments, it has
often been stipulated by lending bank
ers that the borrowing country shalT use
the borrowed money for economic pur-
poses only. The American Government
fer 10 years has Systematically and con-
tinuously discouraged and even tried
to prevent the loaning of American
money by American bankers to any
foreign country whatever if any part of
the money was to be used for arma-
ment. The practice was instituted
largely by Mr.. Hoover when he was
Secretary of Commerce.
Some years ago loan by American
bankers to one country, not Germany.
was held up because of suspicion that
the borrowing country might use some