Evening star., 1932-07-13
HOOVER DISCUSSES
DEBTS WITH AIDES
Stimson and Rogers Remain
at White House COnfer-
ence for an Hour.
Continued From First Page.)

ment of facts which everybody knew to
be inevitable, in order mot to offend
American susceptibilities, they are COM
ing near wrecking their own work of
three strenuous weeks. Furthermore. by
duplicating the American representa-
tives. they have managed to crystalline
the anti-debt reviSionist feeling through
out the country as 1t has been un-
equivocally expressed by the leading
members of the Senate.
1t is believed that henceforth the
President has his hands completely tied
by the Senate, and it will be almost i'm
possible for him to take any construc-
tive action, even after the presidential
elections
In responsible quarters there is a good
deal of uneaSineSs regarding what Is
going to happen on December Is, when
the allies are due to resume the pay
ments of the sums suspended by the
Hoover moratorium. One fact is known
for certain, and that it that whatever
happens Germany will not pay a cent
for reparations
If the Lausanne agreement holds
good, fact which many officials seem
to doubt at present. what will the other
nations do? The general opinion is
that the debtor nations will default, ii
they are able to stand by the Lau-
same agreement: that is to say. If their
parliaments agree to ratify that pact.
Payment Is Doubtful.
Whether the British and the French
governments will be willing to pay their
December installment to the United
States is extremely doubtful. The
French have ratified the Mellon -Beran-
ger debt-funding agreement with pre-
viso voted unanimously by the French
Chamber wherein 1t was stated that
France will live up to that agreement
only as long as Germany continues TO
pay the sums due by the reparations
agreement. 1t is true that the restric-
tions included in the ratification of the
American French agreement has no
legal value as far as this country is con-
cerned. but it has an almost binding
effect in as far as the French govern
ment is concerned in relation to the
citizens of France.
The British have the Balfour decla-
ration, which says that Great Britain
would reduce the debts of their debtor
nations By the same amount the United
States is willing to reduce Britain's own
debt Lately, however there has been
a strong move among the British peo-
pie to reinterpret that declaration TO
the effect thet Great Britain should
paw no more than she receives from her
debtors.
If these two leading creditor nations
decide to adopt the point Of view that
since they have reduced the German
debt by 90 per cent. their own debts to
the United States should be reduced by
similar amount IT is believed In off,
cial circles that all the other debtor
countries would follow the lead of
Americas principal debtors and join
France and Great Britain in the repu-
diation of their debts.
Private Debts Affected.
What is worrying responsible officials
in this country more than anything else
is not the effect of debt cancellation,
but its effect on the private debts The
former allies owe the United States
some $4,000 .000000 This amount has
been considered a doubtful debt since
last year. But the people of this coun-
try have invested abroad. outside these
governmental debts, some 100000
900 and the question arises whether pri-
vate debtors would follow the example
of their governments and plead inabil-
;ty to pay either the principal or the
interest on these private debts. For
the time being nobody is capable OF
giving an answer to this problem. The
panicky New York bankers believe that
general population OF all debts. in
governmental and private. would
necessarily follow the repudiation of the
intergovernmental debts.
Others believe that such a step is i'm
probable. and that the whole thing de-
pends on mass psychology; if the pri-
vate debtors feel that they should follow
the footsteps of their governments. they
will default: if they feel that these pri-
vate debts have nothing to do with the
public debts they will pay.
In certain diplomatic quarters it is
believed that the reaction abroad to
the unequivocal statements Of the Sen
ate will be as disastrous to the Lau-
same agreement as was last year S
dilatory attitude of France to the Hoo
yer moratorium proposal.
Lest year France was accused Of
having practically nullif1ed the effect
of the Hoover moratorium by dickering
over relatively unimportant matters
Now in many European countries
there is a tendency to turn the tables
on the United States BY saying that
the banging of the door in the nose of
the European creditors by saying that
this country is finally opposed to any
debt reduction Is likely to jeopardize
the results of the Lausanne agree
ment.