Evening star., 1932-07-24

FTER more than two weeks of
n turmoil following the making of
II the Lausanne agreements GER
4 \ tain facts are beginning to
emerge. 1t is plain. for ex-
ample, that the unhappy statesmen of
that great conference we're always be-
tween the devil and the deep blue sea.
And, as the United States was the devil.
their home publics were the sea-and
the latter was very much. closer at the
moment
They had Immediately to end the
whole reparations mess for two reasons,
the first financial and the second polit-
ical The financial reason was that
while it was obvious no more money
could be had on account of reparations,
the existence of the claim was steadily
impairing the value of some billions Of
private debts owed by Germans to vari-
GUS foreign investors. If there was
money enough likely to be found in
Germany to pay anything. it was these
private debts that alone could be saved.
On the political side the existence CT
claim against Germany based upon
defeat in war and envenomed by the
guilt clause of the treaty of Versailles
was playing into the hands of the
Fascist party, which is seeking to over
turn orderly government in the Reich
and establish a dictatorship. Thus,
alike to save the private debts and to
save ordinary government, in Germany,
the statesmen of the Lausanne Con-
ference had to put an end to repara-
tions.
On the other hand, their own home
publlcs were not satisfied that they
could not get cancellation from Amer
ipa Not heinC satisfied thev U0Il1d
not forego reparations outright until
the war debt matter was disposed Of
These publicS reasoned, not without
logic, but totally without information
as to the American political situation.
that. as America had some billions sunk
in German investments, to save these
She would be willing to drop her debt
claims.
Sunk" Reparations.
The statesmen Of Lausanne knew bet
tcr-that is, on the assumption that
they were statesmen at all. For nothing
could have been clearer after the Hoover
moratorium debate in the Senate than
that cancellation or even revision was
out Of the present reckoning. But be-
cause of domestic public opinion the
best they could do was to take repara-
tlons out in boat TO the middle Of
Lake Geneva and then sink them at
tached by string to a float. They
didn't dare to sink them altogether
They had to preserve the fiction that
they were right there ready to be
hoisted to the surface at any moment.
They all knew better. They all recog-
nized that reparations belonged with
Fenian bonds. But their pressed pub
lies kept saying. Don't let 90 until
America comes through because if
you do We shall have to pay America
out of our own pockets" When it is
at last plain that America won't cancel
and won't revise the war debts. some
dark night great European statesman
will slip down the funicular to the
Ouchy dock. row out TO the float, and
cut the string. And that will be the
legal end of reparations
Meantime, to save themselves at home
the European statesmen have to keep
up the fiction of American generosity
until their publics get used to the end
Of reparationS. They know that there
is nothing the President can do, since
Congress will decide They know that
with an election coming on no one will
talk debts before the vote. Payments
come due on December Is. But as the
fond mother sings songs to make the
baby take his bottle. European states
men are talking American generosity to
get the Lausanne agreement down the
throats of their public.
There is. moreover, no reason for
American action on debts now. because
failure to act while it will disappoint
Europe will not disturb the economic
or financial situation of the world in
the least The existence of war debts
does not threaten to produce revolu
ton in Britain or France, as the exist
ence of reparations did in Germany.
The only earthly trouble that these
debt claims can make is if payments
we're made in such way as to disturb
the ordinary flow of trade and COM
merce. and therefore the normal state
of finance. And today that problem
does not arise.
One Course Is Open.
One may assume that since the Euro
pean debtors have Just been forced to
abandon all hope Of collecting $4,000
100000 from Germany, they will be cor
respondingly less able to pay the same
sum. or installmentS on the same sum.
to the United States. In that case
their only course is to notify the United
States that owing to their temporary
difficulties they cannot E:eet their debt