Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-11-01


bids fair 10 continue indefinitely
nov that Congress VIII soon meet. For
a question which has almost continu-
sn,Niy bedevtied international and ma
tfonaI politics alike IL is surprising how
siraple. after all, are the basic facts OF
the problem. Ever since the Paris
peace Conference the world has been
revolving around three fxed decisions;
The German people have been az an
times resolved not 70 pay repaIAIlo,,l,s.
The American people have been equaliy
detern1ined not TO cancel war oects.
Finaiiy the European victors have been
resolved not TO pay their war debts 10
ia save as they collected from Germany.
The result has been q ridiculous
S..erry-ro- round. What has happened
a that the American investors have lent
the money 10 Germany TO pay the gu.
ronean victors. who have In turn PAID
fi1e same money over TO US. In the
wears since 1924 when the Dawes plan
went into effect, American investors
have lent Germany $500 100000 ana
germany has paid In actual cash APP
rroxinately the same SUM 70 her creoi-
fors and we have recovered about
AZ. 600 900 900 IN allied payments. IN
edition, Germany has paid con-
siderable amount In kind, coal, cnenl-
Gals. etc, which France and Italy nave
Thus the American investor has been
having German repafations and allleo
dehts In return he has acquired
large amount of German securities. But
FOR the time being Germany Is unable
TO nav interest upon these securities.
and IL Is now clear that she VIII never
be able to pay both the interest on THESE
securities and the reparationS. Now she
i In the not unadvantageous position
81 saving to her foreign investors: II
Won desire to save your investments you
must help US to escape from repara-
items"
situation Not All Clear.
The trouble lies in the fact that the
American people see quite clearly that
II the debts are cancelled they VIII nave
n, nav back the money borrowed from
tha American public to lend 70 the
eIlies of the war. But they do not see
mat there Is no way TO collect the debts.
which they are unwilling TO cancer, ano
that the effort to collect them mas SO
far resulted only in the inVesLmens % z,
81, SOC, O00, 900 of American money III
German securities.
I'D to 1929 what was happening was
that the American investors were grad
unIlv liouidating the allied debts 10
their Government. II they had kept on
ineefnitely buying German securiueS
then reparations would have been palo,
debts would have been paid and there
wowid have been no crisis. one Gay
theNAdferican investor would have neic
4 mortgage of $Il 900, 000, 900 on Ger
man industry and the American Gov,
eminent would have been paid n lull
for its war debts But the united
States would have been no better on.
what was going on between 1924 and
1929 was exactly the same as u Sns
United States had Cancelled the allleo
debts and taxed its own people, save
that instead OF tax receipts the Amer
ican public received German securities.
our allied debtors were perfectly sat-
isfled. they were getting out from un.
der The Germans were not satiSneo
because they were troubled by the
growing mortgage upon their country
in the shape of American-helo secuTi-
ties, but still they were not actualiy
paying Preparations
stopped Buying Securities.
ant in 1929 the American public
ekonped buying German securities. Ine
result was that the source from wncn
Germany was getting reparations
money dried up. FOR the moment the
Germans had recourse to short-term
loans. But that lasted only little
while because again the lenders pc
came anxious. Last June, Just oeIoIe
the Hoover moratorium, the sltuatlon
came down to this. Germany was at
last facing the necessity OF paying rep
arations out of her own pocket along
With the interest on $4,000, 100000 lent
by the American and British investors.
And she was unable to do It. She was
unable to pay not merely $500 ,OOo,uuO
on reparations but also something ike
$500 ,000, 900 which had now piled up
faaiA
And she was similarly unable TO pay
back $1,000 .oO0.0o0 which was the
principal of the short-term loans.
Nevertheless, although the American
F,eoDle Still seemed firmly resolved not
to cancel, what can they do about 1t?
The actual value of the war debts de-
ponds either upon the power TO collect
or upon the interest OF the debtor in
paying. There is no power to collect,
because the United States will not 90
to war to collect the debts of the last
war. Germany has no interest in pay
ing reparations, quite obviously. Great
Britain viii not be able to pay next
year, neither viii Italy. France might.
but will not. because the French will
hold any attempt to collect from them
alone, while Germany and the allies
alike get of, would be unfair. II
would amount to penaiizing the provi-
dent and rewarding the MASTERS.
The inability of Britain, Italy, al
the debtors save France TO pay is I'M
deniahle In that situation the SIM
pleSt solution will be TO extend the
moratorium. But that win settle MOTH
ing. and meantime all the postponed
payments viii be piling up, making
the burden of debts and Preparations
even more formidable.
To Adjust Accordingly.
And at the same time budgets will
be made In all countries as If war
debts and separations did not exist
And peoples win become accustomed
TO the situation without payments.
Two or three years hence. whenever
the moratorium expedient wears out
the question will rise again. But nc
government could live in Germany now
or in the future which undertook rep
arationS payments again. The rise o.
the National-SocialiStS is a direct con-
sequence Of the threat Of actual pay.
mentS by Germany-that Is to say
reparationS is one of the issues which
has been responsible for HitleriSm
Whatever government is in power II
Germany when the issue is raised
would invite q revolution by resuminG
payments And q revolution would not
only insure permanent inability to pay
PREPARATIONS. but also involve the los:
Of the private investments as well.
But Il the German people viii nevel
again consent 70 any considerable rep
arationS payments. the British, French
and italian peoples are Just as certain
TO refuse to pay US out OF their owl
pockets. assuming that they could
which is today true only OF the French
Whatever party is In power in ever,
country when the issue Is reopenes
will have to face the same popula
sentiment which would confront tn
German cabinet In the case Of repa
rafions. And no party could stay II
power after it had resumed payments
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