Evening star., 1931-12-10

III Hy message Oh llie otH uisthut
] stated that / should address the
Congress at greater length upon our
foreign affairs.
World War Debt Postponement.
With the support Of large ma
jority OF the individual members Of
the Senate and House, informed
the governments concerned last June
that
The American Government pro-
poses the postponement during one
year OF all payments on intergov-
ernmental debts. reparations and re-
lief debts, both principal and inter-
est, OF course not including obliga-
tons OF governments held by private
parties. Subject to confirmation by
Congress, the American Government
VIII postpone all payments upon the
DEBTS OF foreign governments to the
american Government payable dur
ing the fiscal year beginning July
next, conditional on like post
ponement for one year of all pay
ments on intergovernmental debts
owing the important creditor
powers
In making this proposal, also
publicly stated:
The purpose of this action Is to
give the forthcoming year to the
economic recovery of the world and
TO help free the recuperative forces
already in motion in the United
states from retarding influences
from abroad.
The worldwide depression has af-
fected the countries of Europe more
severely than our own, Some of
these countries are feeling to a Sc
rious extent the drain of this de-
preston on national economy. the
fabric OF ntergovernmental debts,
ssupportable In normal times, weighs
heavily in the midst of this depres-
sion.
Abnormal Gold Movement.
From a variety of causes arising
out of the depression, such as the
faH in the price of foreign COM
modities and the lack of confidence
In economic and political stability
abroad, there is an abnormal move
ment OF gold into the United States
which is lowering the credit sta
bllity of many foreign countries.
These and the other difficulties
abroad diminish buying power for
our exports and in a measure are
the cause Of our continued unem-
ployment and continued lower prices
to our farmers.
Wise and timely action should
contribute to relieve the pressure of
these adverse forces In foreipn
countries and should assist in the
re-establlshment of confidence, thus
forwarding political peace and eco
nolnic stability In the world.
Authority Of the President to deal
with this problem is limited. as this
action must be supported by the
Congress. 1t has been assured the
cordial support Of leading members
of both parties in the Senate and
the House. The essence of this
proposition Is to give time to permit
DEBTOR governments to recover their
national prosperity. I am suggest
ing TO the American people that they
be wise creditors In their own in
terest and be good neighbors.
wish to take this occasion also
TO frankly state my views upon our
relations to German rcparations and
the debts owed to us by the allied
governments of Europe. Our Gov
ernment has not been a party to. or
cxerted any voice in determination
OF, reparation obligations. We pur-
posely did not participate In either
general reparations or the division
OF colonies or property. The repay
ment OF debts due to us from the
allies for the advance for war and
reconstruction were settled upon
basis not contingent upon German
Teparations or related thereto.
therefore reparations rs necessarily
wholly q European problem with
which we have no relation.
Cancellation Opposed.
I do not approve In any remote
sense Of the cancellation of the debts
to us. World confidence would not
be enhanced by such action. None
OF our debtor nations have ever sug-
gested 1t. But as the basis of the
settlement of these debts was the
capacity under normal conditions of
the debtor to pay, we should be
consistent with our own policies and
principles II we take into account
the abnormal situation now existing
in the world. / am sure the Ameri-
SetA P~SfAS AAofS AAo 0OoSA Z w dttCulPk
to extract any sum beyond the ca
pacity Of any debtor to pay, and 1t
is our view that broad vision re-
quires that ou. Government should
recognize the situation as it exists.
This course of acton Is entirely
consistent with the policy which we
have hitherto pursued. We are not
involved In the discussion of strictly
European problems, of which the
payment of German reparations Is
one. 1t represents our willingness
to make a contribution to the early
restoration of world prosperity in
which our own people have SO deep
an interest.
I wish further to add that while
this action has no bearing on the
conference for limitation of land
armaments to be held next Febru-
airy, inasmuch AS the burden of COM
petitive ornaments has contributed
to bring about this depression, we
trust that by this evidence of our de-
sire to assist we shall have contrib
necessary in the solution of this
major question.
All the important creditor govern
ments accepted this proposal. The
necessary agreements among them
have been executed, and creditor
governments have foregone the re-
ceipt of payment due them since
July !, 1881.
Effect Instantaneous.
The effect of this agreement was
instantaneous in reversing the drift
toward general economic panic and
has served to give time to the peo-
pies Of those countries to readjust
their economic life. The action taken
was necessary. I am confident it
commends itself to the Judgment Of
the American people.
Payments due to the United States
Government from many countries,
both On account Of principal and in
terest, fall due on December Is. It
is highly desirable that law should
be enacted before that date authoriz-
the Secretary of the Treasury, with
the approval Of the President, to
postpone all payments due us on
account Of debts owed by foreign
governments to the United States
Government during the year ending
June 30, 1882, and to provide for
their payment over 10-year period,
beginning July /. 1898.
AS we approach the new year 1t Is
clear that number of the govern
ments indebted to us will be unable
to meet further navrnentS IN ig in