Evening star., 1931-12-25
Everybody's
Business
Refarations Body B'ames
Debt, for Trade Lu11 and
Clears Germany Of Ac-
cusat,ions-Mel'on Halls
Reconstruction Plan for
U. S.
BY DR.. MAX WINKLER.

Germany cannot meet conditional or
postponable reparations payments. Such
is the result of the findings by COM
mittee of experts working under the
auspices of the Bank for International
Settlements. The respective govern
mentS to whom the report is to be sub
mitted will, In all probability, consent
to @ moratorium, a euphemistic way OF
expire s5ing nCn-paymentS.
The report also points out that If a
solution of the entire problem is net
found in the very near future, further
difficulties edging on catastrophe Will
be witnessed. The question of repara-
tionS, it continues, has become, to a
great extent, the cause of the financial
paralysis of the world.
The document, although not conclu-
sive in its findings, may be regarded
with favor. 1t refutes many an &C
cusation directed against Gernany's s
alleged desire to repudiate her obliga-
tions. 1t remains now for the various
governments to subordinate petty poll
tics to sound economic reasoning. Thus
and thus alone will business revive and
prosperity return.
Mellon Sees Benefits.
What the Nation may expect from
the recently propo-Cd reconstruction
/ finance corpora Jion, is best summarized
by Secretary of the Treasury Andrew
w Mellon.
The mere existence, Mr. Mellon states,
of such an inStrumentality furnished
with adequate resources and enabled to
deal with any weakness that may de-
celop in the countrys credit structure,
should have a reaSsuring effect on pub
lie confidence and stimulating in
f1uence on the resumption of the normal
flow Of credit into the channels OF buSl-
ness and commerce.
Mortimer N. Buckner, president Of
the National Credit Corporation, is
slated to become the head Of the Re-
construction Finance Corporation. The
new enterprise is expected to solve the
Nations economic ailments, and Mr..
Buckner Is regarded as capable Of cop
ing with the problem. That a great
deal can be done no one will deny.
1t must. however also be admitted
that unless the existing problems are
tackled forthwith, a situation may
easily develop when assistance will no
longer be required, The death of the
patient is one way of curing disease.
1t is hoped and expected that such a
condition will not be permitted to arise.
Frisco Prospects Brighten.
This year the St Louis-San Francisco
road will fall short of earning fixed
charges by approximately S2,400, 000
Hence, the sharp decline and continued
weakness in the various Frisco securi-
ties
The outlook for 1882 may be viewed
somewhat more optimistically. The in
crease in freight rates granted recently
is expected to add, assuming no change
in traffic, about $1,500,O0O, while a 10
per cent wage cut should result in a
saving of some S2,500,000
In view of this, it Is within reason to
expect that the Credit Corporation will
not hesitate to aid the road in it's tenn
porary difficulties and make possible
the continuance of interest payments
on its various obligations.
The turn Of the tide is at hand, ac-
cording to Harry j. Haas, president of
the American Bankers Association, pro-
vided the railroads can be assured Of
financial assistance. If the carriers can
be assured of sufficient funds to meet
maturing obligations and additional
funds to make purchases of equipment.
Mr.. Haas points out, this in itself will
turn the wheel of the steel business and
others, even down to the small grocery
store.
B. Howell Griswold of the banking
house of Alexander Brown 81 Sons of
Baltimore, and an authority on Federal
land banks. maintains that the capital
of the banks. amounting to only S66.-
100000, will have to be raised in order
to handle adequately outstanding loans
totaling about 20 times the present
capitalization. He suggests that the
Government supply additional funds,
which would do more to restore the
credit of the land banks than any
other one thing.
The decline in the bonds Of the in
stitutions Mr.. Griswold attributes to
the depreciation in farm values and
commodity prices, confusion in the pub
lie mind over joint-stock banks and
Federal land banks and lack Of action
at Washington.
A great deal is being heard these
days about German loans to the Soviet.
Many hold that funds obtained from
American and British investors have
been diverted into Russia.
To begin with, Russia's obligations to
Germany amount to less than $780,
100000, maturing in three months to
four years. These figures do not rep
resent actual loans but are credits for
the purchase of German merchandise
II these advances we're not made, the
German trade position would be far
more unsatisfactory than it is and the
number of unemployed would exceed
the present figure of more than 5,oOO,-
900. About 60 per cent of the total
has been guaranteed by the Reich and
through the Reichsbank and
the Gold Discount hank