Evening star., 1932-11-27
Hoover and Roosevelt Ease
Early Fears by Leaving
Question Open.
CLEAR WAY TO ADJUST
BURDEN AT LATER DATE
Consideration of Nations Capacity
to Pay Expected Instead Of
Hopeless Deadlock.
BY CHARLES F. SPEARE.

BY CHARLES F. SPEARE.
Special Dispatch to The Star
NEW YORK, November 26.-The
war debt situation has engrossed the
attention of Wall Street this week and
the first conclusions drawn from the
White House conference between Presi-
dent Hoover and President-elect Roose-
welt we're responsible for another sharp
decline in the prices Of securities.
Subsequently, the statements issued
by both party leaders modified the feel
ing Of discouragement over the issue,
inasmuch as they expressed a mutual
willingness to consider the individual
position of the debtor countries later
on, while not granting them the privi-
lege Of postponing payments due De-
cember Is.
1t is reasonable to expect that, in
stead Of the iInpasSe that had been orig
inally feared, there will eventually be
something of an accommodation by
this country to the ability or capacity
Of the debtors to pay what they owe in
ton has arisen in the long course Of
adjusting war debts OF reparations that
has not brought its compromise or at
least a temporary alienation of the
pressure on those most affected by it.
The same arbitrary and unfinching
position was taken by those on opposite
sides of the conference table, when the
Dawes plan was being worked out In
1924 again when the Young plan was
being formulated in 1880; and, last
Summer, at Lausanne. In each instance
the outlook appeared hopeless, but COM
mon sense and an appreciation of what
was involved in the exaction of MAXI
mum payments under the original
treaties finally led to helpful conces-
sions. The present situation is summed
up in President Hoover's statement, in
which he says that ''it is unthinkable
that within the comfy of nations and
the maintenance of international good
| viii our people should refuse to consider
the request Of a friendly people to dis
cuss an important question in which
| they and we both have a vital interest,
irrespective Of what conclusions might
arise from such discussion"
The next step in the negotiations con-
| Germs the method Of payment by Great
Britain particularly, as the largest
| debtor, of the installment due next
month. It has been suggested that an
amount equivalent in dollars to the sum
demanded be deposited to the credit Of
the United States either in the Bank
OF England or in the Bank for Inter-
! national Settlements. This would avoid
the disturbance to sterling exchange re.
sultlng from the transfer of such Q
large amount.
The prospect held before Great Brit
ain this week of being compelled to pay,
aiter having requested a postponement
OF the December is quota of the debt,
has again disturbed the exchange mar
ket, with the pound dropping below
S3.25, the lowest level since England
went off the gold basis last year. It
has also been the main factor in bring
ing down the average of commodity
prices, with wheat and cotton the main
sufferers, after what appeared to be
some promise of a stabilization in COM
! moditieS which had slightly advanced
during the first half Of this month.
Stocks Hold Levels.
Stocks are still we'll above the low
averages of November and October. but
slightly under the minimum average of
September They appear to be exempt
from the influence of liquidation. Most
, Of the selling this week has been Of a
professional character. Rather more
serious has been the decline in domestic
and foreign bonds. The former have
OF s lesdeIs.h2iR 3 e .oF. support in issues Of
On the other hand, the obligations Of
the strongest railroads and public utili-
ties have maintained their. markets and
today stand at about the best average
of the year. There also has been great
strength shown in Short-term corpora
ton securities and in those of the Gov
! ernment, with the latest Treasury dis
count bills finding buyers at a rate Of
OFT per cent.
The complete survey of the New
York City credit position by Controller
Berry, has. improved. the status Of the
obligations of this municipality after
having been for some. time depressed by
the apparent unwillingneSs of the city
authorities to institute economies that
would bring their budget to balance.
While the relation between lower
markets for securities and commodities
and the war debt discussion Is a direct
one, it is not possible to identify some
of the current declines in business with
international problems. Undoubtedly
the demand for merchandise that had
accumulated for some time was satisfied
through its increased production late In
the Summer There was then some
over buying of commodities which, with
an active speculation in them, advanced
their prices.
The regular seasonal dullness has now
set in 1t Is intensified by a natural
disposition to await the action of Con-
gresS on those major affairs whose
course will play a part In determining
the degree of business initiative in the
early part of 1898. Hence we see an
other sharp decline in iron and steel
production this week. a reaction in the
output of electrical production after o
series of favorable reports, smaller car
loadings and falling off in retail trade.
Failures on Decline.
One favorable item, however, Is the
decline in business failures. These, &C
cording to this weeks report, were
the smallest in the week Of November
Is since December, 1929. This is a
happy circumstance. for the first 1012
months of 1882 business failures num-
bered nearly $4,000, or approximately
as many IS in the entire year 1881. For
the three years 1930-32 they have been
over 10000, involving liabilities in ex-
cess Of Sc, ,000, 100000 In 1881, OF total
of 26,381 business failures, 10 per cent
were in the retail trade. A consider
able portion of this was represented by
a high mortality among small shop
keepers. In the first nine months of
this year the same ratio has obtained,
rejecting the lower purchasing power
of the public as well as the effect on
the credit of merchants of a steady de-
probation of their inventory values.
But, as Bradstreet's remarks, "the sur
vlvors have emphatically demonstrated
their economic fitness and are in a po-
sition TO Join in and stimulate the