Evening star., 1934-05-20
DEBT CANCELLATION LAID
TO HOOVER AND JOHNSON
California Senator's Bill to Restrict
Loans Here by Defaulters Completes
Move Begun by Moratorium.


dent report him as indignant with
the debtor countries for not helping
him out Of his fix by providing him
with a possible settlement-that Is,
with terms which Congress might
listen to. But this suggests that he
never quite realized the fact that the
Hoover moratorium and the Lausanne
settlement together put an end to all
prospect of further considerable debt
payments. In fact, there are those
who say that Mr. Roosevelt never
quite recovered from his indignation
provoked by the once notorious Bal
four note.
But, in any event, the present sit
uation is clear. Mr.. Roosevelt has
fallen between two stools in the debt
matter He has failed to persuade
the debtor nations to make any sub
stantial offer. He has been forced to
recognize that he cannot persuade
Congress to make any substantial re-
ductlon. He has correctly perceived
that TO prolong the controversy by ac-
cepting fresh tokens and granting new
a absolutions would only result in a use
less personal battle with Congress.
Caught between two firing lines. he
has taken refuge in a convenient
dugout.
There will be those who wish in this
case, as in that of the Economic Con-
ference last Summer, that the Presi-
dent had perceived the implications
Of his policy more quickly. He could
have led the way to an amicable ad-
justment of the debt question a year
ago-on the only terms ever to be
available. But he could not have OBJ
tained large payments or-what
seemed to be in mind at one time
trade concessions. The debts
were for all practical purposes dead.
The problem was one of sanitation
and not Of Yankee trading.
Before, however. he understood the
realities of the problem the moment
had certainly passed. Whatever he
might have accomplished in December.
1882, it is obvious that in May. 1894.
his hands we're tied What had been
a question of sanitation two years
earlier was now a case for surgery.
Accordingly he washed his hands of
the whole matter and decided to let
come by default and not
by definite agreements. But, after all,
the important thing is that there
should be liquidation.
Default to Cause Explosion.
In Washington I find a tendency in
official circles, both American and for
eign, to see the approaching default
in dismal terms, to lament the GER
tainty of long continued bitterness on
both sides of the Atlantic. For my
self I entertain no such apprehensions.
Default, now become we'll nigh in
evitable. will precipitate an explosion
which will clear the air. Since no one
wants TO borrow money here now the
Johnson bill will have no Immediately
serious effect. BY the time nations are
ready to resume business normally it
will have been forgotten and its re-
peal will hardly excite comment.
Just as soon as it became clear that
the only solution of the problem was
the default of the debtors, any fur
ther postponement of that solution was
a misfortune, For, in view of the dis
turbance to the peace of the world due
to the debt controversy. even a bad
ending was better than no ending.
Something had to be done to convince
the token payers that they were get
ting nowhere by keeping up this farce.
And Senator johnson achieved this
useful service by his bill Even fic-
tlons can become as disastrous as
facts, in time. and the dangers OF the
token had become incalculable.
Sometime. as I said at the begin
ming. the country will be grateful to
johnson and Hoover. Then it will
join them in its praise. Then it will
say Of them that, together, they got
us out of the debt difficulty. that to-
gether they put an end to all European
debt payment. Mr.. Hoover may per-
haps claim the larger share of praise.
because he stopped payments on the
old scale by the moratorium. but
Senator johnson just as surely stopped
token payments. Together, then. they
must stand as the great cancellors.
And it is evident that Mr.. Roosevelt
has now abandoned any idea he may
claims of either in this respect. Recog-
nizing in the end that solution by
cancellation was inevitable. he has
permitted Senator johnson to have his
bill for cancellation. disguised as
measure for collection.
Debt Elimination Again.
For international relations generally,
for world recovery and universal trade
restoration. the elimination of the war
debt obstacle must prove gain of in
estimable value. The last and the
largest of all obstacles directly in
herited from the war is now abolished.
War debts are not only dead but the
death certificate is to be issued
shortly. The debtors. having been
forced to default, will now be freed
from further disguise. The creditors,
having been compelled by the john
son bill to cancel-Since even token
payments are now barred-can ex-
haust their natural irritation in harm
less denunciation.
When, moreover, subscriptions for
the erection of monument to Senator
Johnson as the Iron Cancellor" are
called for-and in this respect the
European nations should be prepared
to contribute something more than
mere tokens-I hope to be allowed to
make my own modest contribution.
For, since David overthrew Goliath
with a small stone. doubt II anything
has been more spectacular than the
Californian's destruction of a great
evil with a very little bill.
Copyright. 1934)