Evening star., 1932-05-24
EXPECT
REVISION Of DEBTS
Reparations Action Likely to
Be Delayed Pending EIec-
ti0ns in U. S.
BY CONSTANTINE BROWN.

D1 NONSIANIlNE bkOWN.
Although the United States will not
be represented at the coming Lausanne
reparations parleys even by the Gus
tomary unofficial observer. the Treas
ury and the State Departments are fol-
lowing with keen interest the private
negotiations which have been started in
Europe between representatives of the
various powers.
There appear to be three schools OF
thought in regard to the reparation
problem. The Germans say they cannot
pay any longer: the French say that
whatever reduction may be made in the
reparation payment must have its coun-
terpart in the American war debt, and
the British want to postpone settlement
Of the entire matter until after the
American presidential election.
The German position seems to be
the clearest of all. Germany, her
spokeSmen say, is required to pay some
s400 100000 year. to say nothing of
the interest on her private debts. While
the foreign powers are expecting Ger
many to pay this important amount
all kinds of trade restrictions have
been put by all countries in Germany S
way, thus seriously reducing her trading
power. The new British tariffs, the
French quota. the increase OF the pro-
tective tariffs in almost all other cOun-
tries in the world and the depression
from which the South American states
are suffering have all contributed to
reduce substantially Germanys foreign
trade, her main source Of income to
meet her international obligations.
Trade Far Behind Normal
Thus, In order to meet the payment
must have a monthly foreign trade
balance OF $4,000 900. In the month
of April that balance dropped to $40
900 900. Hence the determined atti-
tude of Herr Bruening, who says Ger
many cannot pay any longer and will
not be able to pay until normal trade
relations give her an opportunity to
sell sufficient goods abroad to restore.
to a small degree, the prosperity OF
her working classes and obtain enough
profits to pay some of her Indebtedness
The French have informed the world
through their future prime minister
Edouard Herriot, that they are willing
to discuss an eventual reduction OF the
German reparations as established un-
der the Young plan. on condition that
the United States make similar reduc-
ton in the war debts the European ma
tions owe this country. This stand OF
M. Herriot can be easily understood
because the French people have been
educated to the idea that for every cent
that France may give up from Germany
a similar amount will have to be re-
mitted by the United States. On the
other hand, while the French have not
been nearly as hard hit by the world
depression as Americans or Germans
the French budget is likely to show by
the end of this year deficit OF some
5000 10000 In order to cover that
deficit. new taxes will be necessary and
it is unlikely the French Chamber would
be willing to impose new burdens on the
French people. renounce German repa-
rations and continue to pay some $50,
0O0, 900 a year to the United States.
British Must Save Face.
The British are more or less in the
same position as the French. with the
difference that they pay the United
States a much larger sum than the
French. But Britain Is anxious to
maintain her reputation Of never de-
faulting. and would like to reach some
international agreement whereby she
could get out Of her predicament with
out repudiating her obligations.
Many people in London believe that,
while it would be unwise to ask the
American Government to consider re-
duction or cancellation Of debts, the
present adamant attitude of the admin
istration might change after the presi-
dental election. America, it Is said in
certain well informed quarters in Lon
don, realizes that she cannot collect
her debts under the present circum-
stances. The American bankers. more
than any other people in this country,
realize that a complete overhauling OF
the present debts and reparations prob
lem would start the wheels Of world
trade moving again. A number Of
American statesmen are Of the same
opinion. it Is said in England. Conse-
quently, the best thing to do would be
to postpone the issue until after the
presidential elections and see what
could be done with the new admins
tration.
Since the Hoover moratorium ex-
pires June 80, 1t is necessary to have
the Lausanne Conference. But. the
British say to the other Continental
powers, let us make temporary agree
ment and postpone, as far as Germany
is concerned, the Hoover moratorium
for another year.
May Call Conference.
When the American President Is
elected 1t will be easier to discuss the
whole matter with him and obtain, If
possible, his consent to discuss the en-
tire problem Of debts and reparations
at another conference to be held after
his Inauguration. In the meantime
Great Britain and France had better
pay the December installments of the
interest due to the United States.
Such proposition is being discussed
at present between the principal Euro
pean powers.
The German attitude is passive. The
Germans are not in position to pay
anything and consequently have no OBJ
lection to any kind OF postponement
porary solution which would avoid any
further payment this year and await
the results of a conference such as the
British have in mind.
The French are anxious that, at
least in form, the Young plan should be
saved and may agree to Germany pay
ing into the Bank of International Set
Elements the amount due on July and
reloan that amount to Germany imme-
diately, as was done in the case Of the
Hoover moratorium. In this way, Her
riots face would be saved until a new
conference will settle finally the entire
problem.
BRITAIN REPORTED