Evening star., 1933-11-12
LATIN AMERICAN DEBTORS
b DESERVING OF GOOD WILL
Temporary Suspension of Payments Due
to Economic Crisis-NO Intention of
Defaulting Fairly Met by Wall Street.

| loans.
1t is self-evident that even if Latin
American countries could improve their
| position in relation to foreign exchange,
through further curtailment Of imports,
| the payment of their foreign debts will
continue to be difficult until other coun-
! tries are able to receive Latin American
| products in volume approaching that
| of three years ago. Or until foreign
| capital resumes its flow into those
countries for investment
Lack Of Demand.
A foreign correspondent makes an
appropriate description when he COM
pares this situation to that of "a man
with large quantity of valuable mer-
chandiSe on his hands who finds him
self unable temporarily to dispose of
the goods because of lack of demand,
and, therefore, unable to pay his per-
Sonal debts.
The Latin American countries are
perfectly willing to liquidate their mer-
/ chandise at almost any price. AS re-
ported by the press. many of them are
diSposing of large tonnages, but even
so. the total of sales is not sufficient
to create f1ouriShing international trade
and service on the debts.
This willingness of the Latin Amer
ican governments to comply with the
terms of their foreign obligations as
soon as conditions will permit, con-
stitutes another reason why ungracious
comment on their temporary defaults
should be avoided
Up to the present time, there has been
no suggestion of reputation on the
party of any debtor country The
southern governments have only an
nounced temporary suspension of pay
mentS on either interest or capital, or
on both. until the worst of their finan-
cial troubles is over.
There has been no deliberate intent
OF defaulting, nor is there any intent
of extending this temporal suspension
of payments indefinitely.
Consequently, the Latin American
bonds now in default are not going to
be total loss. and they are obviously
not total loss today. Economic con-
ditions in Latin America will improve,
prices will gradually strengthen, and
when this takes place one of the first
things to be cared for will be the ma
tional credit.
Irrelevant of recent political changes.
the one consistent thought of those gov
ernments has been, and is today that
no reputation will occur and that every
effort will be made to resume service
as soon as world conditions make this
possible.
In this connection Latin Americans
point out the fact that there is a
1alr number of investors among them
who purchased United States railroad,
corporation and other securities in
times of prosperity. When they con-
slider the tremendous depreciation in
their holdings today, and the drastic
income decline. they wonder why such
sweeping criticism is being voiced con-
cerning the depreciation in Latin Amer
ican bends.
Confederate Debt Recalled.
Furthermore, Latin Americans remind
their creditors that several States of
the Union have not only defaulted in.
but repudiated, their debts. The Con-
federacy went out of existence after
having accumulated huge debt which
never was and never can be paid. Brit
iSh investors we're in this case the chief
sufferers.
And right at the present time the
three most important cities in the coun-
try, New York, Chicago and Phila-
delphia, are in serious financial diff
hculties. States and counties and
lesser municipalities are on the verge
of bankruptcy Millions of debts have
SIMPLY Deen written OIL.
Finally, a third reason why critics
OF Latin America would do well to pro-
ceed little slowly in condemning the
southern governments for their, present
inability to pay, is that the disclosure
of the methods involved in the negotia-
ton of the defaulted loans has placed
much OF the responsibility on the bank
ers' shoulders. I have dealt with such
disclosures in preceding articles. Suf-
nee II here to repeat that the blame
for the reckless borrowing which char
acterlzed inter- American financial rela-
tons for the last IL years has been
conclusively shown to be divided fifty
fifty between the lenders and the bor-
rowers.
That all these reasons-the world
Wilderness of the economic crisis. the
intention OF the Latin American gov
ernments to resume payments as soon
as possible and the part of the fault
which was the bankerS-are now ac-
knowledged by those conducting inter-
national finances in this country Is
proved by the lenient attitude adopted
by them toward the defaulting govern
ments.
Nobody is thinking today of sending
Marines as debt-collectors for Uncle
sam. OF course, not even they could
collect today. But anyhow, it is sig
nlf1cant to see the Wall Street mag
mates adopt a fairer attitude toward
their debtors than was customary is
years ago.
To get public opinion in that same
mood, to clear the misunderstanding
prevailing in the mind of the average
newspaper reader in this country as
to the lnevitability of, and the good
intentions behino. these temporary de-
faults, is what remains now to be ac-
complished.
(Copyright. 1880