The Indianapolis times., 1933-11-18

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The amount in default rep
resents about S12 for each
man, woman and child in the
world, regardless of country,
race or creed.
1t is only slightly less than the
total expenditure of the United
States government from its start a
century and a half ago down to the
World war.
These gigantic figures bind the
nations Of the world together for all
time and eternity They never can
pay them. They never expect to
pay them.
Such in effect is the startling in
PRODUCTION to DR.. Max Winkler' S
book. Foreign Bonds-An Autopsy, -
published today by Roland Swain
Company.
Comes at Great Time
Coming as it does on the heels of
by sensational testimony revealed
by Ferdinand Pecora and the senate
banking committee, it clinches the
impression here that the bankers,
in the vernacular, have made un-
mitigated suckers of the public.
DR.. Winkler is new York banker
IN his own right, and an economist
Of international repute An autopsy,
he observes, does not help the dead,
but knowledge of what caused the
demise might benefit the living.
Hence his autopsy" on the colossal
dead" debts which foreigners owe,
but never will pay.
The outspOken volume describes
the transformation of the United
States from a debtor to a creditor
nation with investments abroad
aggregating more than $1,000 .O00,-
600, mostly within the last fifteen
years. This sum does not include
the $11 ,000000,O00 war debt owed to
this country by Europe.
A Land of Easy Money
1t reveals how Americans "dis-
covered" the world during the last
decade and half as a field for in
veStments, and how the world, in
turn, discovered" America as a land
OF easy money" with a "docile and
incomprehensible" public ready at a
moments notice to lend money to
friend or foe without giving a
thought as to how, if ever. the loans
were to be repaid.
1t tells how reputable bankers and
investment brokers took advantage
OF this public-which depended
upon them to look into the sound
ness of securities before offering
them for sale-and maloaded bill
lions Of dollars worth of paper now
wErth little or nothing at all.
1t tells how bankrupt foreign gov
ernmentS were pictured in rainbow
colors by American floaters. How
some of the most conservative con-
Germs in the country disposed of Sc
curities in a way which in England
sent people to prison.
It's Amazing Story
How the kin of high government
officials were bribed for their aid in
floating virtually worthless bonds
sold in this country, and how as
much as 90 per cent of the proceeds
of some of these loans actually
never reached the hands of the bor-
rowers.
1t is a most amazing story. one
every American grownup should
read as part of his education. 1t
should be required reading in high
schools, colleges and universities.
For, while it may be that the
Hegelian dictum is true that Eve
learn from history that we learn
nothing from history" there are ex-
ceptions to the rule, and these ex-
ceptions-those able to learn from
eXperience-can save money by a
study of this book.
One Nation Is Gone
Dr. Winkler. among other things,
knocks into a cooked hat the popu-
lar notion that governments seldom
default and struggle to pay lest they
be forever branded as poor risks or
cheats
France. for example, now in de-
fault on her war debt to the United
States. ceased payments at least
once every thirty years" from the
sixteenth to the nineteenth century
During the last century, the author
points out, not one Latin American
republic escaped default, some re-
peating as frequently as once every
seven years.
Default on the part Of govern
ments, even some of the principal
ones, apparently has become a habit
rather than the exception.
Nevertheless, DR.. Winkler does
hold out one little ray of hope, slen-
der though it may be. namely that
governments normally prefer to pay
something on account. even if only
a few cents on the dollar, rather
than default in toto or repudiate.