Evening star., 1932-07-16
LOAN To AUSTRIA
MAY SAVE EUROPE
Nation Bankrupt, but Nego-
tiates S42,OO0,OOO Fund
From League Council.
BY JOHN GUNTHER.

By Gable 20 The Star.
VIENNA. July l6-Austria gave uI
the financial ghost last night by finally
declaring what is tantamount TO lin
tied transfer moratorium. thus joining
Hungary. Bulgaria and Greece as Eu-
ropes official bankrupts.
At the same time. by a remarkable
juXtaposition of circumstances. Austria
approved a protocol whereby at last il
received new loan OF 100000, 600
schillings ,s42 900 0OO).
No more perfect proof could be de-
viSed that at present Austria and other
Central European countries can only
pay what they owe by borrowing more
Creditors can hope to save their invest
ments only bv giving new cash to the
defaultlng debtors. Yet the price is not
tco high for Europe to pay.
May Be Turning Point.
Austria is not alone responsible for
its plight and the alternative to a loan
might b, the financial destruction of
what is left of Central Europe The
loan may possibly be turning point in
d
similar Austrian loan in 1928
The events of the busy night may be
classified as follows:
l. The moratorium is not called a
moratorium. 1t is called measure
Tor the prohibition of export of foreign
urr2ncies for the purpose of debt pay
ments abroad" 1t provides that the
service on public debs. both interest and
roO Ort i2o ha ;r
schillingS in blocked accounts with the
Austrian National Bank instead of be-
ing transferred abroad to creditors
This is the procedure which Hungary
Greece and Bulgaria have already
classicized.
The Austrian decree gives creditors
the right to spend their M ney within
Austria either to pay pressing private
debts or for residence and tourist pur-
poses. Service on al private debts like
wise will not be transferred, but will be
sterilized in local schilling accounts.
The total value of foreign leans in
Austria. excluding the two exempted
from the mora torium but including
money tied up in the Credit Anstalt end
ether private banks, is about $3.50 .00O.-
000 Of which the American share is
about S75,000,000.
League Approves Loan.
q Immediately on the heels of the
announcement of the moratorium came
the news that the League Council had
approved an Austrian loan. The loan is
.or 300 100000 schillings. but 1000 900,
600 of it will at once be absorbed to
repay Austrias outstanding debt to the
Bank of England What is left will be
used to buttress the falling reserves OF
the National Bank and presumably tc
tcrium ends
The protocol to the loan renews the
declaration in the 1923 protocol that
Austria must not jeopardize its inda-
pendence. hence a customs union with
Germany Is outlawed for another tw.
decades
3. Political opposition to the new loar
gained force here. but was extinguisheC
at the last moment The Social Demo
Gratis and pan-Germans started to op-
pose it because Of the "Anschluss" ban
They retreated Money talks.
A. An Austro-H Hungarian tariff wal
has begun as if in sardonic answer tC
the hopes of the Western powers tina;
assistance from abroad would pour OF
on the troubled Central European
waters Austria stands to lose about
SIS ,0000 900 on account of their sudde,,
and silly tariff squabble.
tCopyright 1927