Evening star., 1934-12-02
u. S. FACES PROCESSION
OF FUTILE DEBT NOTES
$5OO,OOO,OOO Still Could Be Salvaged
From Europe if Accepted as Final
Payments on Accounts.

taking the place OF British In France.
German manufacturers were replacing
British and Germany was crediting her
new sales against reparations.
Ultimately the British woke to the
realization. but by that time they were
driven to the position Of putting on a
tariff and going off gold. Then they
went to work Systematically to arrange
to take their imports from their
debtors. And on that basis their debt
ors we're willing to pay. We have never
attempted to arrange our foreign pur-
chases in such fashion as to buy from
the debtors, because we were always
confronted by the fact that we sold
more than we bought.
After the great crash Of 1929-30 an
enormous public sentiment was stirred
up against the wicked bankers who
made bad foreign loans. But If the
bad loans had not been made the
shrinkage in foreign trade and the
reputation of the war debts would
have come much sooner. If We we're
going to try to collect the foreign debts
there was no way to do it but to lend
the money. If we were going to try to
maintain our export balance there was
no solution save to lend the customers
the money with which to buy.
National Unity Aim.
There still exists in this country q
widespread notion that foreign trade
can be improved at the same time that
every energy of the Government is
being expended upon establishing a
self sufficient Nation. The New Deal
is founded upon the idea Of America
as a national economic unit Foreign
trade is still considered incidental,
something you pick up along the way
as you continue to follow policies con-
sonant with the spirit Of extreme eco
nomic nationalism.
To expand its foreign trade the
United States would have to decide
what of its domestic production it
would abandon-just as, in the same
way. to collect the foreign debt it
would have to decide what part of its
domestic markets it would surrender
to the foreign debtor. And that phase
of the problem has never yet beer
fairly faced. Secretary Wallace has
tried to explain it, but he has had
little influence upon the Roosevelt
administration and none upon Con-
gress.
Now We have lost all OF the war
debts and We shall lose all Of the
private debts except those owed by
countries whose raw materials or
goods We can afford to accept in pay
ment. But so far as one can now
see nothing is going to free US from
the feeling that in some way we have
been cheated because We remain
totally unconscious of the fact that
we wanted to be paid in money, which
did not exist, and refused to be paid
in goods, which did exist and were
available.
New Reputation Likely.
When our debtor nations refuse to
oay on December IS, as they, of course,
will, we shall see a new reputation as
having its origin in a continued bad
faith. The President could tomorrow
insure British payment on a large
scale If he were able to retire the
American Merchant Marine from the
seas and let the British carry our
sOO0o- we COulu 4lldhC LllC
pay If we increased our purchases
from the Reich and reduced our sales
to them.
But We want our ships and we want
our sales of cotton and oil and other
things to the Germans. And the great
weakness of the administration in
dealing alike with foreign debts and
foreign trade has been its failure so
far to tell the country what is actually
the truth-that it has adopted policy
which makes the payment of either
war or private debts impossible, the
policy Of economic nationalism, which
can be combined with debt collection
by country which buys more abroad
than 1t sells, but not by a nation
which like ours sells more than it
buys.
johnson Cancelled Payments.
Actually, Mr.. Hoover suspended pay
ments on the war debts and Senator
johnson Cancelled them. Now it is
possible to look forward to long pro-
cession OF due dates, before which
notes will be solemnly dispatched by
the State Department to the debtor
nations and politely ignored by them.
Then some day, when the question Of
balancing the budget becomes real
again, an administration will find it
profitable to accept a quarter or a
half a million of dollars to close the
account.
Until that time. however. there
seems no way of escaping a semi
annual exchange of recriminations
based upon the American conviction
that the debtors are dishonest and the
European belief that the United States
is unreasonable.
Copyright. 1934D