Evening star., 1932-04-17
BY FREDERIC WILLIAM VILE.


~ EHIND the action Just, initiated
- by the State and Treasury De-
partments for protection Of
IL American investments abroad
especially in Europe, looms the
specter of another international finan-
cial and economic crisis graver than
any that has gone before. 1t involves
no fewer than seven countries in Cen
tral and Eastern Europe. They are
Austria. Hungary, Czechoslovakia, Jugo-
slavia. Rumania, Greece and Bulgaria
! Conditions are worst in Austria and
Hungary which are practically bank
rupt. The plightS of Greece and Bull
garia are almost as bad. CzechoSlo-
vakia, JugoSlavia and Rumania, the
/ little entente states which are allies of
France. are being tided over their i'm
mediate difficulties through the aid of
the French treasury and other French
| capital. The situation paralyzing all
of these seven countries has been ag-
gravated by the recent failure of the
Danubian confederation project. This
was to have been consummated at Lon
don this month but fell through mainly
because Germany and Italy feared an.
increase in the Central European politi-
cal influence of France, which launched
the scheme.
Americas interest in the perilous
state of affairs now crystallizing in
Europe is two-fold Not only are hun
dreds of millions of dollars tied up IN
government securities and industrial
enterprises in the seven countries fac
ing disaster, but the general world
repercusSion from their collapse would
automatically spread across the Atlantic
to the United States. Just as the World
| War in 1914 and the German economic
crisis In 1881 both originated in Austria.
so the cruX of things at present is to
be found in the impoverished Austrian
state of today Its condition is even
worse than that of Germany. it is
authoritatively declared Unemployment,
stagnation in trade and industry. tariff
walls and financial difficulties all con-
tribute to the distress. The gold and
foreign exchange coverage of the Aus
trian paper money circulation fell in
February below the legal minimum 1t
was especially to rescue Austria from
impending catastrophe that the wrecked
Danubian customs union was devised
Austria owes the United States
s24,614.000 The president of the Aus
trian National Bank was recently in
Basel, in reported quest of a new World
! Bank loan, but received nothing but a
9O-day extension on Sl2 600.0 of
Austrian credits about to fall due
Hungary Worse Of.
| The other member of the defunct old
/ dual monarchy. Hungary, is possibly
/ even worse off than Austria. The United
| States stake in Hungary, as represented
/ by investments is bigger than in any
other country in Southeastern Europe
1 although Austria is a close second
( American investments and credits in
! Hungary have been estimated at si79,-
0000c0, including $l34, 100000 of gov
/ ernmental and corporate securities,
nearly all in private hands. Hungary
at the end of 1881 declared a one-year
moratorium on most of the country's
debt payments. Budapest newspapers
at the time warned foreign creditors
that they must not expect repayment
of their s160,000.000 short-term loans
for two or three years. American banks
Hungarian loans. They must now rec
cncile themselves to converting these
into long-term obligations.
How near the abyss the Balkan
states are has just been dramatically
disclosed before the League of Nations
Council in Geneva by NJ VenizeloS,
famous prime minister of Greece. He
depicted the financial position of Greece
and Bulgaria as "ruinous" His own
country, the Greek statesman blurted
out, is unable to pay foreign bond cou-
pons falling due May I. Greece owes the
United States a World War debt of
s32 407, 900 and private American cap
ital in 1880 financed a Greek sig per
cent issue of treasury bonds amounting
to s7,500,000 There are large Amer
iT1u 1ny1tr 5V, iv1l1 ia1
establishments, including the Hellenic
Electric Corporation. Speaking not
only for Greece, but, apparently for
other Southeastern European countries.
Venizelos told the League Council last
Friday that I'VE are all headed for
ruin" unless the great financial powers
come to the rescue The League re-