Evening star., 1932-07-24
WAR DEBTS REPUTATION
HELD UNNEEDED In EUROPE
Britain and France Not Facing Revolu-
ton, as Did Cermany-Notification of
Inability to Pay Only Safe Recourse.

not meet it at all In such case what
can the United States do? Patiently.
nothing at all but grin and bear it.
On the other hand. no issue of repu-
diation arises. The debtor simply can
not meet his note on the due date.
Next year it may be better or it may
be worse. No one can tell, and there
Is not the smallest reason for anticipat-
ing the situation, since there - no I'd.
hardship in postponing decision. One,
two or three years from now We shall
all, beginning with the Senate, know
more about the whole world question.
Naturally the debtor peoples would
like cancellation. So would every farm
er who bought his place on a mortgage
in the boom days. So would every
debtor in the world in view of the pres
ent state Of things. And so, quite obvi-
cusly, may all debtors get cancellation
by the normal route of bankruptcy if
commodity prices stay down indef-
nitely. But there is no reason to an
ticipate all that, either in war debts or
private mortgages.
1t will be very humiliating for the
European governments 10 have TO tell
Washington that they cannot meet
their notes on December Is It will
be disappointing to Washington not to
get the money. But there is the fact.
From now on the debtors are only go
ing to pay what they can pay out of
American private loans to Germany to
pay American public claims upon Eu-
rope Is over, one hopes for good.
AS far as personal opinion goes l
Go not believe the United States Treas
ury will ever collect anything of real
value from war debts. In the end It
seems unlikely that the European peo-
pies will consent to go on paying now
that Germany has quit. The British
may pay something. But no nation is
going to repudiate the debts this year
or next or at any time as long as they
obviously cannot pay them. because re-
pudiation is an ugly word and not
nice process Neither, however, are
nations going TO pay.
America says there Is no legal con-
nection between debts and reparations
That Is true. Europe says that the
debtor nations who were creditors of
Germany and cannot now collect any
thing from the Reich are less we'll able
TO meet the American debt-and that
Is true also. But where the Senate is
right beyond cavil is in its insistence
that 1t is for the European debtors IL
channels and not seek to stampede
American public sentiment into some
sort Of alleged settlement without re-
gard to the facts.
What Europe is asking in fact is not
that the United States shall not enforce
payment of impossible sums-she can
not enforce payments-but simply that
she shall spare their feelings by be-
slowing upon them a definitive quit
claim. What they can't pay they won't
pay in any event But how pleasant 10
feel that they would not have TO say
they are temporarily embarrassed and
must acknowledge inability to remit!
That is not fair request. It is not
only unfair in equity, but it is STU
pendously foolish politically. 1t is bad
psychology because it makes the creditor
angry instead of moving him to mod
Grafton. 1t means practically that in
stead of accepting the inevitable, with
resignation. when that inevitable occurs
in December and no money is forth
coming public sentiment in this coun-
try will be angry and critical. People
will feel that something has been put
over on them because of the cancella-
ton agitation.
All the talk about the enormous
benefit to be obtained by abolishing
debts is, frankly, just so much bunk
Because only the paying Of debts can
produce harm and no one will here
after pay debts save as they can safely
do SO. Eventual revision must come II
experience proves that the present eco
nomlc and financial situation in the
world is to continue. Cancellation
under those conditions will, in fact be
automatic and without benefit of Sen
ate. But we are not there vet.
Entitled to See Facts.
What is necessary now is time enough
to prove to the satisfaction of the
American people whether the European
debtors can pay anything in the future
and. If so. how much. The American
people are entitled to chance to see
with their own eyes what the facts are.
precisely as European peoples took
their own time to discover the truth
about reparations, There is no reason
why they should be hustled or hurried
into any cancellation agreement. And
no good reason can be alleged for any
haste Talk about the benefit to the
world of clearing up the mess IS not
very convincing, because the mess is
not affected by debts that are legal but
at the present time are not being met
President Hoover gave European
statesmen a moratorium ard they have
employed it, somewhat tardily. to clean
up the German mess. But they have
attached string to their settlement
and now suggest that the President do
something more for them because they
have cleaned up the refuse in their
own back yards on American time And
that. after all, is both unreasonable and
bit irritating After 13 years Euro
pean expectation of large American ges-
lures on alternate Wednesdays and Fri
days does become bit tiresome.
Whatever happens the European
creditors of Germany are not going to
try to start reparations all over again,
just as they are not going to try to
start the war over again. Whether We
cancel the debts or not. that issue is
settled What remains is for them to
tell us in December what they can pay
us this year. if anything, and why they
can't pay more. showing their books
as an evidence of good faith. And we
can be reconciled or furious as We
choose. But business will not be hurt.
finance will not suffer. recovery will
not be postponed because honest debt
ors cannot at the moment meet their
legal obligations and cannot say when.
if ever. they can. If that were the
case. where would any business In the
world be today7
Copyright. 1897