Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-06-28


without any departure from the policy
of interference in the reparatien
and debt field.
About this time Washington hegan
hearing from q variety OF quarters
which always command national OFF,
eialdoms ear. German and other Eu-
ropean securities are held in the United
States nowadays on colossal scale. 1t
is estimated that up to December 81.
1890. Americans hare invested abroad
totcl of more than Sl7,500, 600 000,
eyclusile of the wSr debts due us.
Counting these, Uncle Sans stake
overseas can be considered to be we'll
over S24, 800, 0Oo,0 600 In 1880 we piled
81 SOC. 900 600 onto tan increase Of
STA per cent over the sum newly in
vested in 1929. Nobody should make the
mistake of thinking this is Wall
small savings bank in New England or
in North Dakota; of the tradesman in
New Hampshire or the farmer in Iowa;
of the young factory foreman in New
York or seamStress in Central Hi
nois; Of life insurance companies, Of
trust companies, of fiduciary institu-
tiens of all kinds, which buy larger or
smaller quantities of foreign securities
for investment purposes.
Crash Would Affect Americans.
If Germany were to Grassland mn
mense amounts of these American dol
lars are in German governmental, mu-
nicipal and industrial bonds and stocks
and with that crash, other disaster,
the effect on the American people would
be immediate. widespread and serious.
Washington, last month, and on an In
tensified scale this month, was in
formed from many authoritative Amer
lean quarters that If anything OF this
sort were to come to pass, conditions
might ensue in this country which
would make the depression of the past
two years tame and insignificant by
comparison
The next concrete development
came with the statement issued at
Berlin at the end of May, on the
verge of the trip of Chancellor
Bruening and Foreign Minister Cur
thus to London. The German govern
ment in that statement decreed an
ether S400. 0c0, 600 of emergency taxes.
It spoke of the insufferable privations
the Reich Is now undergoing. 1t de-
clared, in so many words, that these
had reached the limit. II these were
added to Germany's back would break
Bruening and Curtius made, of course,
corresponding representations to Prime
Minister Macdonald and other British
government authorities The German
statesmen left Great Britain without
any definite pledges of remedial Brit
ish action, because. as Is now apparent,
the British were waiting for the
American lead, which. they have al
ways insis ed must be taken before
there could be any allareund amelio-
rative world economic action.
Castle Signals Action.
On June IL Bruening and CurtiuS
boarded the liner Europa at Southamp-
ton to return to Germany, and there
encountered-by prearrangement, as
must be upposed-American Ambas sa-
dor Saekett, on his way back to his post
at Berlin The next day, June l3,
there was forthcoming at the State
Department in Washington an an
nouncement, the portentous stgnif-
canoe of which can only be compre-
hended in the light of subsequent de-
velopments. William r. Castle, jr,
Undersecretary of State, speaking with
full administration authority, told
newspaper men that, although the
United States adhered to its policy of
unrelated affairs, 1t was obvious that
in case of demonstrated German in
capacity to continue reparation pay
ments, the entire situation might pre-
sent a different aspect. Thus was sig
nailed the action with which, less than
a week later. President Hoover was to
eleetrify the world On Friday, June
l9, the White House announced that
a plan to bring relief to Germany was
under consideration.
Within "a heurs-en Saturday, June
20-the one-year war debt and repara-
ton moratorium proposal was formally
proclaimed In the week between the
Castle announcement and the debt
plan, Mr.. Hoover was In the Middle
West. His impressions of the serious
ness of American business conditions
we're deepened by his contacts in In
diana, Ohio and Illinois. Undoubtedly
these had their part in the action he
was about to take.
Hindenberg Letter" Factor.
President Hoover's final act, before
deciding upon his fateful step, was to
solicit from the heads of the German
government a confidential. candid
statement Of its plight. To lend Ber-
Inns reply the most solemn significance,
1t took the form of q letter" from
President Won Hindenhurg personally to
the Chief Executive of the United
States The contents of this document
have net been disclosed, and presum-
ably will not be. The Germans re-
quested that it be considered strictly
private communication. According to
Washington efhcial statements, the
cable, was not actually in hand here
until after President Hoover's debt
holiday proposal was made. public But
it must have arrived at almest the
same moment The shrewdeSt guess is
that Hindenburg wrote in terms of Ger
man conditions other than purely r.
nancial and economic. AS the COM
monest understanding has been that
the German government freely and
frankly comedies the imminence of q
Communist avalanche if the country's
plight is not remedied, some authorities
believe that Hindenburg's message to
Hoover laid these particular cards on
the table. The Communist peril-the
virtual absorption of Germany by Rus
ssa and the danger Of a Red wave that
might lap all over Europe-has always
been conspicuous in WashingSon,s cal
eulatiens of the German situation.
Dawes and Young in Plan.
Such. in broad outline, is the chrome
logical history of the most momentou:
action taken by the United States IL
world affairs since eur entry into thu
World War. Two names not hereinbe.
. fore mentioned need to be alluded tx
in reciting the transeendent events o.
the past menth-Charles G. Dawes anc
owen D. Young. President Hoover wa;
at pains on June 20 to say that botf
these men had approved the morato-
rum scheme. Ambassador Dawes ar
rived here from London at the end o.
conditions and conditions in Europ'
uannroliu His renresentative went fal