Evening star., 1934-05-20
BY FRANK H. SIMONDS.

- OME Gay WIleH IIle IlSCOIy VI
our times Is written, the names
of two great Californians-ex-
~ President Hoover and Senator
JohnSon-will be forever joined
as the men who settled the great war
debt question-after it had postponed
recovery and plagued international re-
lations for decade and half after
the close of the war. Probably by
that time, too, people will have for
gotten that the effect of the acts,
alike of the President and of the Sen
ator, we're quite the opposite of what
both intended, but in any event that
detail will be of little importance by
that time.
Actually, the johnson law has COM
pleted what the Hoover moratorium
began. When, in 1881, Mr.. Hoover
suspended the debt payments for a
year, he automatically put an end to
all further payments, in conformity
with the original debt settlements. He
also prepared the way for the later
Lausanne Conference, which abolished
reparations altogether After that the
sole issue remaining to be settled con-
cerning the great mass of debts and
reparations-whiCh had clogged world
recovery SO long-was an agreement
between the United States ard its
debtors reducing the subsequent pay
ments of the latter to the limit of
tokens.
In a word, in December, 1892. the
allied debtors. who were also the cred
itors of Germany, and who had just
let the Germans off-by necessity, of
course-with insistence upon insig-
nificant further payments, are now
ready to close out their American ac-
count by promising similarly nominal
payments to us. Somewhere between
s500,00O000 and sl,00000000C was
still to be had. the smaller figure be-
ing probably the more exact
AcuteIy Aware of Need.
In a word. the debtors were still
ready to acknowledge the legality of
their debts and to discharge them by
tokens. because they disliked to be
considered as defaulters. But Mr.
Hoover was by this time without po-
litical influence. and still confused
about the whole question. He was
fully aware that the debtors had no
intention Of going on. He was acute
ly aware of the need to have some
settlement to abolish the whole con-
troversy. In his confusion he turned
to the newly elected President and
sought his cooperation, which alone
could bring about congressional as
sent to a fresh moratorium or a new
settlement.
But Mr.. Roosevelt brushed aside
the proposals. He was at this time
plainly unfamiliar with the whole
question. having been absorbed in
State and national politics. He was
too, under the influence of advisers
like Moley, who remained confident
that the debt could be collected in
substantial part He still seems to
regard the debts as assets" Mr. Hoo
yer commented dryly, after their cele-
brated conference And later. from
Warm Springs. all the inspired COM
ment showed the President in the at
titude of a debt collector and not IA
vorable to cancellation or even drastic
reduction.
Thereafter Mr.. Roosevelt was the
captive of his original decision. made
at the time of the Hoover conference.
He had accepted for himself the re-
sponsibility for collecting the debts
But by the time he came to power
half the debtor nations had defaulted
outright, and the rest, led by Great
Britain, were now prepared to make
only token payments amounting in
| the aggregate to one mill in the dol
! lar. Congress. on the other hand
was now committed to collecting not
one mill in the dollar, but the last
mill.
In this situation the President coulc
now only temporize. He was con-
fronted by the British statement tha'
they would pay only token of slight
dimensions and that they would only
pay this if he certified publicly tha
such payment absolved them in hi!
| Judgment from all charge of being il
default. With the London Confer
ence impending the President had nj
| choice He gave the required as
surance and the British paid thei
promised token. Italy followed suit
but France, Belgium and Poland
among the more considerable nations
again defaulted outright.
Old Defaulters Stood Firm.
Last December the situation re
manned unchanged, the debtors wer,
unmoved, Congress was more uncom
promising than ever. Faced with tn,
choice between actual and unanimou
default and token payment on th
old terms. the President again yielded
and the tokens were turned in, slightl,
smaller in size. All the old default
ers stood firm, however, and ther
were recruits Now at last it mus
have been clear to Mr.. Roosevelt tina
the debtors would never pay in full o
considerably again. Nor was it les
plain that Congress was less willln!
to compromise than ever.
With the approach of the presen
Spring and with a June due. date IL
sight it became increasingly clea
that. on the one hand, the debtor
nations were not prepared to go be
yond tokens and. on the other. tha
the price of token payments was pres
idential absolution from the charg
of default. And precisely at this mo
ment Congress intervened with tn
johnson law. which for the future
while not actually preventing the ac
ceptance of token payments. robbed
the President of the moral right agail
to administer absolution for the sil
of default.
That, of course, brought the who'll
debt question to the very edge o
solution by default. There was nj
longer any temptation to the debtor