Evening star., 1932-01-10
Germany Cannot Pay

Germany Cannot Pay.
All doubts as to the German position
on reparations at the forthcoming Lau-
same conference are removed by the
statement made yesterday at Berlin by
Chancellor Bruening to Sir Horace
Rumbold, the British Ambassador In
50 many words, DR.. Bruening declared
that Germany will tell the world" at
tions 'Is at an end" Her incapacity, it
was specified, applies not only to the
present, but to "an indefinite time to
come"
This news hardly takes either Europe
or the United States by surprise. Ever
since last months report Of the World
Banks Young plan experts, which fore
Shadowed such developments, it has
been only a question of time when Ger
many would have to proclaim officislly
what all well informed observers long
ago recognized to be the inevitable The
situation Is destined to have wide roper
cussions, especially in this country.
1t connotes those obvious facts" to
which President Hoover, In his De-
cember message to Congress, said we
| cannot blind ourselves 1t is be-
cause he is aware of the inescapable
conditions now to be formally disclosed
at Lausanne that Mr.. Hoover suggested
the possible necessity of further TEN
porary adjustments" in the whole inter-
governmental debt structure. The
President, in addressing Congress- had
in mind, Of course, the extension of
the existing one-year moratorium on
reparations and European debt pay
ments to the United States.
On what precise basis Chancellor
Bruening will seek to persuade the
creditor powers that Germany has
reached the end of the reparation rope
remains to be revealed. The expecta-
tion lis that it will be represented that
Germany's colossal private indebtedness
that is, the money borrowed by the
Reich government and by German in
dividuals and corporations abroad-is of
such magnitude that to attempt to
shoulder 1t along with reparation pay
ments would be an unbearable burden.
The German back, hopelessly unable to
stand such strain, would simply break
under the load. Collapse and bank
ruptcy In Germany would ensue, and,
with them, state Of economic demoral-
ization throughout the world that Is
almost terrifying to contemplate. The
sought to check last June would in all
probability be insignificant by compar-
ison with the chaos which a complete
breakdown in Germany would pre-
| cipitate.
There has just reached this country
an impressive symposium prepared by
the Union for German Science group
of distinguished economists who have
been studying the Reichs economic life
In its relation to reparations. "An
agreement between the powers prin-
cipslly concerned with reparation pay
ments," the symposium states, sis prob
ably the most urgently needed step in
the restoration of the economic equili-
brium of the world at the present time"
Later on Prof. DR.. Karl Diehl, one OF
the contributors to the symposium,
makes this arresting statement:
The economic life Of Germany today
is both unwholesome, and, in some re-
spects, dangerous. Men endure much
for their native land, SO long as pros
pect of accomplishment within the
future measurable for most OF them
fortifieS and guides them. The eco
nomic state Of the German people at
this hour can neither strengthen their
hope for the future nor even enable
them to shape a consistent policy on
any major issue, foreign or domestic.
No economic act Of importance can take
place in Germany today that does not
| depend upon the effectuation OF
| llyable and workable agreement con-
cerning reparationS. And only an agree
ment which correctly enViSageS the
economic life of Germany today has any
chance of working or surviving, even OF
avoiding grave consequences for all
mankind.
These are grinly significant words.
Such as they are certain TO be pondered
by the European statesmen at Lausanne
with the seriousness which they deserve.
The United States Is not to be repre-
sented at the Lausanne conference,
even though 1t is vitality interested in
its decisions. If Europe is no longer
going to milk the reparations COW, the
brutal truth is that America Is not
| likely to continue to get the cream 1t
has been receiving in the form of war
debt payments. Whatever Congress
may think about it, that Is the
| condition, and not the theory, by which
the people Of this country are about
to be confronted. The sooner they look
the stern facts squarely in the face the
1 better