Evening star., 1931-12-27
EUROPEAN CRISES
IN 1881 REVIEWED
German Collapse and Eng
1and's Abandonment of
Gold Lead Troubles.
vontinued From Eighth Page.)

OUIu LCdu IUuUiCSs
continued From Eighth Page)
why bankers loans should have pri-
ority over the reparations debt and
cont see it yet. However, they agreed
to the Hoover one-year moratorium,
with the reservation that it should not
interfere with the so-called "uncondi-
tiOnal' slice of the reparations.
Even with the morator Im however,
Germany was still unable to meet her
private debts and the short-term loans
had to be extended, or frozen" for a
period of six months, which expires in
February next.
England Hardest Hit.
The freezing of the German debt put
bankers all over the world in a tight
place. To meet their own obligations
they had to call in money from every
available source, and the heaviest bur-
den fell on England, where bankers of
all nations cuStomariy keep large bal
anceS for commercial needs. The with
oraWal OF balances from London re-
duced the British gold reserve almost
to the vanishing point, compelled the
LABOR government to take stringent
measures of retrenchment which re-
suited in its overthrow and prepared
the way for the formation of a ma
tional government" and the calling of
new parliamentary elections which
sealed Labor'S doom. 1t also forced the
abandonment of the gold standard,
with the consequent decline of the
pound
Confidence in political institutions
suffered decline. This was shown in
Germany by the startling and dis
quletlng growth Of HitleriSm in
austria and Hungary by similar mani
1eStations of popular impatience. The
effect in England, reflected politically
py the violent swing back to conserva-
tlsm. has been the abandonment of the
traditional free-trade policy and the
erection OF tariff barriers which already
nave created widespread distress abroad
without apparently improving condi-
tionS at home.
Even Russia has not escaped the ef-
1ects OF the crisis. despite her boasting
SIX months ago that the depression was
purely capltallStlc" depression. Un-
able to get credit abroad with which to
purchase. the material and machinery
needed, Russia now has to confess that
lne progress of the famous f1ve-year
Plan Is seriously compromised.
War Talk Subsidies.
one thing marks an agreeable diff
ference IN favor of 1891 over 1890
Ihere has been much less war talk
except Tor the far-of Japanese
con11lct one hears little on all sides but
professions of peace. The inflamma-
tory speeches of Mussolini, to take but
one example, have ceased, and the
ouce today vies with BRAND in the
TeNerauon of peaceable intentions,
ms tact has considerable impor-
tahce. The constant agitation of the
war Specter has as much as ANYTHING
else contributed to the destruction of
pupIlc confidence. When war seems
imminent people hoard their capital
ana AVOID taking chances, however
siienI: 1here can be no doubt, looking
talk of last year helped considerably to
intensity the world depression The
constant agitation in Germany over
the Polish corridor question and kin
ofed demands for revision of frontiers
mas been even more destructive of con.
fdence. "a WI
Although Hitlerism continues tn
progress, there have been Indications
IN Germany in the last few months
Iiio Sio"tH OF Saner outlook at
IeaSI on the part of the government
io 1Ve supporters. There appears to
pe growing realization in Germanv
that durable peace on the F,lronea1 y
comment can scarcely be assured ey-
Cept Dy an understanding with France
1Ae hltch IS that most Germans fear
aI1y Such understanding would have TO
De entirely on Frances terms
Franco
The French purpose in seeking
union with Germany is to use such q
ul!loh as the nucleus for the ultimate
.eueratlon OF all the European states
M brlands comprehensive scheme for
a European federation. launched two
years ago, proves now to have tackled
the problem from the wrong end Re-
Iore Such general union can he
tlloughU OF there must be at least a
truce as between The chief elements of
tne union. First Franco German DIFF
1erenceS must be faced and settled.
then perhaps, Franco-Italian.
IN Lurope the world economic crisis
Is not regarded as entirely psychologi-
cal. 1t Is pointed out that even sho17ld
puonc confidence be restored there
would remain many technical obsta-
cieS to trade recovery. Chief amono
,.
Efforts to obtain a general aoree-
ment on tariff reduction having failed
many european nations are endeavor.
ing 10 bring about the same result
through commercial treaties. Preferred
rateS are given to nations which grant
reciprocity. Such arrangements have
cone much damage to American trade
Tor the United States has been slow to
selze upon the advantages inherent in
this Kind of swapping
Debts Scaling Expected.
Improvement in trade conditions is
considerably slowed up bv the reIncD
tance OF losers in the present sllmn tn
cut losses and start fresh. Eurone has
bllls Tor lot of dead horses to meet
Snd naturally feels little enthusiasm
about meeting them. Chief among
1heSe dead horses are the gigantic loans
mace TO Germany and other Central
european nations. The loans were
contracted at time when money was
cheap and plentiful. 1t is hard, if not
Impossible. to repay them at a time
When money is scarce and dear.
consequently many suggestions are
hearo, and not by any means among
uehlagogues alone, that there ought to
be a general scaling down of interest
rates at least, and perhaps of capital
amounts as well, to bring the nominal
amounts of the old loans into nne with
tnelr present value. Such proposals
Will undoubtedly be heard in the forth
Eom1ng discussions on Germanys
finances.
No European now expects that anv
OF the European allies will pay war
debts to the United States beyond the
amounts they receive from their con-
quered eX-enemies. Scarcely anybody
believes the Germans will paw anv fur
ther considerable amounts on the rep
arations debts. The only problem to
be solved, apparently, is how to fix it