Evening star., 1933-10-08
DEFAULTS REACH
HUGE PROPORTIONS
World Total Nearly as Large
as U. S. Expenditures
for $50 Years.
BY BYRON SELLER.

Special Dispatch to The Star.
NEW YORK, October 7-Defaults
are so common nowadays that security
holders say they sting less" Perhaps
the nonchalant attitude is just as we'll,
for defaults are reaching astronomical
proportions. twenty-five billion, three
hundred million dollars of contractual
obligations of governments, States and
municipalities will be in default at the
start of next year, according to DR.. Max
Winkler. This sum is equal to S12 Tor
each man, woman and child living, re-
gardless of race, color or creed.
These staggering defaults, DR.. Wink
Ter points out in his book, Foreign
Bonds-an Autopsy" are only slightly
less than the total expenditures of the
United States Government from its
foundation. about century and half
ago, until the outbreak of the great war.
The defaults are equal to almost three
and half times the total expenditures
of Great Britain in connection with
the Napoleonic wars, covering quarter
of a century.
Russia Heads List.
The amount in default Is equal to
Is times Great Britain's outlay in con-
nection with the Boer War. 1t is equal
to 80 times the annual income of all
the Balkan countries and so times that
of the Scandinavian kingdoms. 1t is
equal to the aggregate wealth OF IA OF
the United States, including Arizona,
Delaware, Florida. Idaho, Maine, Mon
tana, Nevada, New Hampshire. New
Mexico, North Dakota, Rhode Island,
Utah and Vermont.
Russia heads the list of defaulters
of the total Brazil is a distant sec
ond, with we'll over one billion in de-
fault Mexico holds third place with
somewhat less than five-eighths OF a
billion. Germany ranks fourth, with
appreciably more than half a billion,
followed by Chile with about S450,-
OOO, 900. Turkey with 1870, 900, China
with S346, 900 900, Rumania with 1925
900 900, Yugoslavia with $279,00O.0OO
and Uruguay with more than $170,O00,-
OOO Latvia is last with $7.500,000,
which is, however. almost as large as
the accumulated interest.
Conclusions drawn from these de-
faults are not especially cheerful. These
gigantic figures, DR.. Winkler asserts.
bind the respective countries for all
time. The debtor nations never can
pay them. Moreover, they never ex-
pect to pay them.
Dishonor and dishonesty that are at
tached to default-which in many In
stances is purely technical-and repu-
diation only -aggravate the refunding
operations of honest borrowers. World
trade of the future will necessltate
credit, which is based on character in
nations as well as in individuals. Per-
haps future generations. however, will
be as forgetful of debt histories as
Is that portion of the present genera
ton here now purchasing the internal
gold obligations of country that re-
pudiated all of its debts.
Gold Loans Advance.
Gold currency loans scared this week
as the yellow metal shot up to peak
prices, but such issues here retraced
their steps when gold declined. Reich
dollar securities were bid up on the
supposition that American monetary
stability was near and that Germany
would pay interest coupons shortly.
Swedish descriptions were whirled on the
rather silly rumor that Sweden planned
to offer some compensatory payment
features in view of the fact that such
coupons were not being paid in gold.
The success of various conversion
offers in the London market caused
persistent reports here of another offer
for United Kingdom 51as. Response to
Canadas $225, ,000, 900 loan helped her
dollar bonds here. Argentine loans dis
regarded cables telling Of the demand
for deprecated pesos. Cuban descrip-
tions remained under influences Of the
political situation there.
(Copyright. 1o33.l