Evening star., 1932-12-04
JOBS AND FOREIGN TRADE
ISSUES In DEBT DEBATE
Showdown Between Politicians and Econ.
omists on Collection and Prosperity
Awaits Congress.

Chaos in Germany was accompanied
by similar disorder all the way from
Bavaria to Greece. Central Europe is
today economically Frustrated, finan-
cially bankrupt and politically dangerous
Trade and commerce have practically
come to standstill, foreign payments
are no longer made. That. says the
economist, Is the result Of the attempt
to collect reparations.
Now the undertaking Of the Ameri-
| can politician to repeat the course of
the French, to get from his allied
debtors what the French endeavored to
exact from the vanquished German
| will, in the judgment of the economist,
like the financier and the business man.
simply lead to new exacerbation of
the whole economic and political situa-
tion in Europe. And, of course, II the
economist Is right, we are In for q con-
tinuation of world depression, and
American recovery, so far as it depends
upon world recovery, IS further post
poned.
But this is matter that cannot be
argued about Public opinion and po-
litical purpose in this country are
Europe pay or repudiate and, for the
moment Britain, which is the chief
debtor, Is unwilling to repudiate. On
the other hand, all Europeans agree
| that the American attempt to collect
will cost the United States heavily and
| postpone world return TO normalcy in
definitely.
The picture Of a solvent Europe try
ing to evade its just debts and to put
the burden upon an honest but naive
Uncle Sam has been fixed in the minds
of the American people and nothing
can be done in the way Of dealing with
the debt question until that picture is
abolished. The American people seem
resolved to punish their debtors by
forcing them to repudiate even II they
feel themselves unable to pay. Suspi-
cion and prejudice and passion have
crept into the question and as long as
they remain the situation Is hopeless.
Six months from now it may be
little clearer what the true situation Is.
The main issue will be the same, not
whether Europe can pay, but whether
the United States can afford to face
the consequences of European at
1 tempts to pay. If trade Is down, unem-
ployment up, income from foreign Sc
curities abolished, national revenue fal-
len, not risen, and II concomitantly
European chaos, both political and
economic, has increased, then there
may be chance to reopen the discus
sion Of debts, but not otherwise. As
ing deceived by the European debtors
nothing will be changed. But perhaps
II the evidence tends to indicate they
have been misled by their own politi-
clans, the case may look different.
Difficulties to Come.
But there is one detail worth recall
ing. II the economist is right and in
sistence upon debt payment leads t.
he
hard times, six months later Il viii be
far more difficult to collect anything
by way Of settlement, either In the
shape Of q final payment such % was
arranged for reparations at Lausanne
or for tariff favors such ss Roosevelt
has suggested. Whatever the debts are
worth now, they win be worth less II
the world goes downward a. the econo-
mist says It viii.
After all, the important thing IS that
the whole question Is now TO be tried
out In the court Of national opinion.
with all the essential elements In hand
We are going to see whether we can
afford to be paid, whether the costs OF
collection are prohibitive, whether we
shall collect at the spigot and pay at
the bung. taking in few millions In
actual payments and losing vastly more
In foreign trade and private obligations
OOufmCeu That Europe look their
money, Is spending it on armaments
and other European delights, that it
could pay but won't, the American peo-
pie have embarked upon a final cam
paign to collect. Europe and the econ
omists agree that the result will be a
prolongation and perhaps an accentua-
tion OF the present worldwide depres-
sion. The proof will be in hand before
too long. The farmer will have it In
the shape Of wheat prices, the manufac-
turer In the form of his production
sheet, the Nation In the terms of its
employment returns. The experiment
may prove expensive, but no one will
deny that it is necessary. II we can
AFFORD to collect the debts we ought to
do 1t. II 1t is to our advantage to In
sist upon our rights, all other argu-
ments fall by the wayside
II, on the other hand, the experiment
proves that the attempt to collect ends
in disaster, as did the French experi-
ment in reparations. then the discus
sion can be reopened on a sound basis.
Congress says our interest lies in the
attempt to collect; business, finance
and the economist say 1t lies in Joining
europe In sweeping away all obstacles
70 return to normal conditions. And
Congress has the first shot at 1t.