Evening star., 1932-07-09
The Reparations Settlement.

| Triumphing over seemingly insur-
mountable dificulties, Germany and
her creditors have reached at Lau-
same an agreement that promises, al
ter twelve years of travail, to settle the
reparations question once for all. Ger
many is to pay a final lump sum oil
STA 600 900, as compared with the
gigantic total of s63,s22 100000, stipu-
lated in 1920. The Lausanne pact
obliterates the Young plan, estao-
nshed only three years ago, ana
reduces Germany's present obligations
under that arrangement by roundly
$1,000 100000.
Reparations, virtually. are wiped out.
The Reich is to receive a moratorium
of three years on the minor sum for
which it is still held nominally re-
] sponsible. At the end of that period
of grace, the Germans will be privi-
legged to launch bond issue for what
ever sum it may then be decided Is
still owing, provided the Reich's eco
nomic situation permits the obligation
| to be assumed without strain.
Europe is to be unreseryedly congrat-
ulated upon its achievement at Lau-
same. 1t is the longest step yet taken
to put its postwar house in order. Po-
litically, as well as economically, the
effects are immeasurable Preparations
have hung over Europe like sinister
cloud for more than decade, threat
ening new wars and retarding the proc
ess of commercial and financial re-
covery.
To the French especially are thanks
due for the generous spirit with which
! they have faced the issue. Undoubtedly
| the liberal atmosphere which the Her
riot government has brought into the
conduct of French foreign policy has
had much to do with the happy results
just accomplished at Lausanne. Prime
Minister Macdonald, assuming the Bis
MARKHAM honest broker" role as be-
tween France and Germany, enacted it
at critical moment and saved the
reparations agreement from shipwrecG
on relatively minor points like Ger
many's political demands.
| Nothing in the Lausanne compact
specifically refers to the war debts
which Germany's reparations creditors
owe TO the United States. There is
plenty of implication regarding them
between the lines Of the agreement.
| No secret has ever been made OF
Europe's expectation that if sweeping
/ concessions were made to Germany, her
creditors would look for correspondingly
generous treatment on this side Of the
Atlantic.
The State Department guardedly
suggests that the way is now cleared
for our European debtors to apply for
reconsideration of their funding agree
ments with the Treasury. President
Hoover obviously had exactly this con-
tmgency in mind when last December
he vainly appealed TO Congress for re-
constitution of the World War Debt
Funding Commission. The President
suggested that the commission be
clothed with authority to examine
such problems as may arise in connec-
ton with these debts during the present
economic emergency, and to report TO
the Congress its conclusions and
| recommendations"
On the same occasion Mr., Hoover set
forth unequivocally that he does mot
approve in any remote sense Of the
/ cancellation Of the debts to US" But
he added significantly that 1T is use
less to blind ourselves to an obvious
fact, viz, that it will be necessary in
some cases to make still further tenn
! porary adjustments" These adjust
ments, the President explained, would
be based on our debtors capacity to
pay.
With American public opinion widely
and even bitterly divided on the debts
issue, as a cursory debate in the House
yesterday promptly indicated, it is un-
likely that any revisory action will be
projected pending the outcome of the
1882 political campaign. That national
upheaval once over, decisions on the
debts can hardly be deferred much. be-
yond then. Europe has had semi
annual debt installments falling due on
December is, the first to become pay
able after the one-year Hoover mora
torium. Either our debtors themselves
will have TO act at that time. or some
sign of our attitude will be unavoidable
The country will do well TO indulge in
some intelligent heart-searching on the
subject in the meantime
Europe. at any rate, has moved
nightly in the direction that leads to
political peace and economic tran
quillity. The American people salute
the old world for an exhibition of
sanity and sagacity none the less well
come because so long delayed
---S--@@N-s----