Evening Star Newspaper, November 8, 1925, Page 45

~ HUGE RAILROAD CLAIMS . AGAINST U. S. ADJUSTED EDITORIAL PAGE NATIONAL PROBLEMS SPECIAL FEATUPES Part 2—16 Pages Enormously Complex Problems Grow- ing Out of Federal Operations Solved. Administration Work at End. BY G. GOULD LINCOLN. The United istration, its work s cease to existabout the first of the new vear, if present plans are carried out, James C. Davis, director general, hav- ing handled successfully the Govern- ment claims ting more than $1,000,000,000, will step out he affairs of the Railroad Adminis ration still remaining to be adjusted— they are minor matters—will be turned over to th Treasury Deépartment. Probably the organization which has handled these matters so successfully will be traisferred in 1 t to the Trea ury Department to put on the final touches. The Rail holds about tates Railroad Admin- complished, will ad ini jon_still $134,000,000 railroad paper growing of general settle- ments and capital expenditures for the roads by Government during the period of nent operation The Treasury under an other ansportation act, holds p: roads aggregat ing $184,000,000 from 1 made by the Go mder sectior leemed ent dispos ailroads to andled by « ury. Goverr Department per of the resulti the tinal Drops From Public Eye. GGovernment the ry period of the railroads until Febr Iroad Administration wa much in the public eve. But the return of the roads to prl- operation this Government has attracted comparatively little ttent notwithstanding the fact that fuced with a really stupend v task which in many « as decl: be d for ar and with every prospect of innumer- able suits s of law deed, the | claims, totaling mo b dollars, growing o Go’ mnent op: eration o has bee 2 f the greates svernment's post-war activities. Mr. Davis, a widel known attorney, was appointed d! eral of the Railroad Adr by the lute President Harc , 1921, succeed: John Barton Payne that office. Mr. Davis had been general counsel of the Railroad Agministration prior to his appoint ment director general 1 thoroughly fami h the wc the admin is understood that he will return to his law practice in Des Moines, Towa, when he re linquishes he has held for nearl With c Administra During the peration eriod ar 420—the since vate agency tion than oads| th Towa was of the € it Railroad the few of except for “ minor matters which will remain to be Treasury Depart rnment’s great settled through the ment, the Federal Gove dventure in railvoading will have come to an end. The cost to the Gov- ernment of its operation of the roads, plus the added cost of the six-month jaranty clause in the transportation act handing the roads back to their private o was in round figures $1.596.00 The cost of operating rent control t £1,145,000,000. This is the ditures over the rev and was due to two the failure of the rease freieht the increased 1s placed excess of expe enue received factors, first ernment to i keep up with aperat! 551,000,000 of s the result period in igreed fo see eive “e same in during the period of Federal The understanding was that this onths the rates would be readjusted by the Interstate Commerce Commission in such a way that t ads would he able to earn A fair return on their estment. In cluded also are $15.000,000 paid to the short-line railroads to make up deficits. of the six-m wwhich the ( that the rai during 1 Final Figures Small. When the final report of the rail- read administration is submitted it be found that the cost of lqui- ation to the Gov ment, e: of overhead been only | somet than face value of the | presented. When job was first tackled the vas made that the liqui- to_the Government would 000,000 and might as $£500,000,000. olidge and his prede- Harding, gave Mr. hand in making the these claims. Red tape was cast aside and it is said to be due lurgely to this fact that the work has progressed so rapldly and satisfactorily. Under other cir- umstances it might have required ) years, with much costly litiga- to obtain the results now achieved. The settlements involved noany intricate and complicated iestions of law and fact. They ve been settled without igation inany cases. Separate adjustments ve been made in 371 cases in 1 creditor roads were pald an suzregate of $243,647,196, with col- tions from debtor roads of $195,- Mr. Davis attributes the comparative ease with which the ad- justments have been made to the fact that he has been permitted to choose a staff and to deal directly and without interference with the roads, matching thelr experts with his own. Coolidge Davis has received from Pres- Coolidge a letter of appreci- which reads, in part, as fol- has ing 45,574,901 Tess of originally er cent the s Dl ediction tion cos at least run as high Vresident ¢ President fre ient of cessor, Lauds Davis. M. \dent ation lows “T am informed, and belleve, that the task of examining, determining and liquidating the encrmous mass of claims that have grown out of the war-time relations between the Government and the railroads was probably the greatest of its sort in the experience of this country, per- haps of the world. I recall that it was almost universally prophesied that this work would not be per- formed without developing a maze of controversy and litigation, expen- sive to all parties and likely to post- pone final settlement for many years. Under vour direction, all these un- -omfortable anticipations have been dissipated, and you now approach the completion of your task with the re- markable record of having made these settlements practically with- (ut_any resort to litigation. ““So remarkable a showing entitles vhu to the heartiest congratulations, and, in extending them to you, I must 1dd & word of recognition for the at- ttude whick tie railioad executives war | ed could | In-| one | e than | ypderstanding and fmproved relation- of office. | | cluding | ling | | tenance were not always at hand. The have taken. To their liberal disposi- tion is, of course, due a large meas- ure of credit for this series of set- tlements. 1 belleve the accomplish- { ment thus effected marks a new | epoch in relations between the Gov- ernment and the carriers, an epoch in which we will see constantly better ships. Because I strongly feel that ave contributed to making this ssible T extend my heartiest felici- U. S. Took Control in 1917. The Federal Government took pos- sion of the railroad systems of the ited States on December 26, 1917. The properties so taken over as a war measure, exclusive of 855 short lines, comprised 532 separate properties, in- 25 coastwise and inland steam- ship companies, the Pullman Co. car <, private car companies, floating equipment used in rivers and harbors, elevators and all other properties e: sential to national operation of the transportation system. Including main line, sing tracks and terminal the 366,197,000 miles of tracks, 08,000,518 freight cars, 66,070 loco motives and 55,939 passenger cars taken over. The Interstate Commerce Commission fixed a tentative value of $1%,900,000,000 for the whole property. The compensation fixed for the use of this property for the 26 months of Government control was based upon the actual net earnings of the car- riers for the threc-year period prior to Federal control. This was $2,087, 3, representing a monthly rental in excess of $80,000,000. The roads were taken over by the Government almost without notice, owing to the exigencies of war. There was no tifne for a preliminary exam- ination or record of the physical con- dition of the property. No inventories were taken. Conditions at the time were abnormal. Labor was high and in great demand. Materials necessary for the proper standard of main- ability of the country to TY on war depended upon the efficiency of the railroad transportation. Under those cumstances it was practically im ible for the Government to give are and scrutiny of expenses of | maintenance and _operation which | might have been practiced under nor- mal conditions. ledges Given Owners. When the railroad properties were | 12 t | [t | control in as good repair and as com- | | | | three taken over by the Government Presi-| dent Wilson gave the owners two| urances, which later were con- ned by Congre: The first was WASHIN T is a curious feature of our so- cial and conversational life that the one subject which is of su- preme and vital importance to every human being is the least often discussed—our thoughts and feelings concerning the hereafter and the shaping of our lives in accordance with our theorles or convictions. It seems, indeed, as though the whole world of men, as well as women, were afflicted with a curlous shyness when the subject of religion is even indi- rectly alluded to. In these days of bridge and mah- Jong, universal dancing and freer in- tercourse between the sexes, the habi- tude of conversation between men at | their clubs and other meeting places | has naturally enough declined. | ok ki Yet there are always friendships, and with friendship an exchange of | views upon all the vital matters of life. These continue to some extent, yet it is a curious fact that if the conversation between any little com- pany of intellectuals should wander | from sport or literature or art to the | graver question of a possible here- after, even the most brilliant talkers become tongue-tied, there are self- consclous gaps in the flow of speech and there is a universal air of relief when, as usually happens before long, the subject is changed. Youth {s sometimes bolder, and de- liberately seeks elucidation of the one ageless, impenetrable mystery, but| among the middle-aged and elderly there exists almost a cult of silence concerning those problems where sclence has failed us and which faith in the mystic teachings of the spirit- | ual leaders of the world can alone solve. From the earliest dawn of in- | telligence we walk through life, wheth- er our way lies through the pleasure | gardens or ac the ragged places, | @long the edge of a mysterious and yawning abyss into whose unfathom- able depths we know that some day or other we must commit ourselves. e * * & There are times—times, as a rule, of solitary thought—during which we | strain our eyes looking downward, | but for the most part we accept our destiny with a curious mixture of fatalism and an ostrich-like capacity | for burying our heads in the affairs hat the property would ke main- sined during the period of Federal} plete equipment as when taken over | Ly the Government. The second had to do with the compensation for the | use of the property, setting up the three-vear test period already de scribed. Based upon these assurances the| carriers at the conclusion of Federal control prepared and tiled claims | against the Government totaling $1,013,389,502, consisting largely of de- minds for balance due on compensa- tion. for malntenance of way and equipment, material and supplies and depreciation. These claims before final hearing were reduced by volun- evision on the part of the car- idux | ana of the world until the last moment. Without any hope or fear of the hereafter we should logically become | a world of lunatics, vet all those| forms of faith and belief which from | the earliest days of history have pro- d a countless procession of saints heroes have grown fainter | throughout the generations, until to-| EDITORIAL' SECTION he Sunday Staf GTON, D. C, SU NDAY MORNING, NOVEMBER 8, 1925 Society News ARTICLE II BY E. PHILLIPS OPPENHEIM Author of Many Famous Mystery Stories day 1t really seems as though in fu- ture ages, not far removed from our own, all established forms of worship would die of sheer inanition. It is the penalty which we are pay ing for a larger measure of intell tual comprehension, for greater in- roads into the mysterious world of sclence, that with all such develop- ments the primitive faith of men in God grows fainter and fainter. Cen- turfes ago religion was an easy thing. Man belleved what he felt and what he was taught. Nowadays, when the utfiftarfanism of a more mechanical world has destroyed, to a large ex tent, the earlier and sweeter forms of apprehension born of faith and sentt ment, religion as expressed by definite formulae is sinking fast into | the background of our liv its place among the dead, beautiful things whose inspiration is past—the | mythology of the pictured worship of the Egyptians * Greece, x It is scarcely our fault. It is a matter often, when one contemplates the simple, joyvous lives of past gen- erations, for deep and bitter regret that the whole-hearted, unquestioning faith with which they accepted the priest-expounded explanations of the problems of the universe, has, in a iarge measure, become imfossible to the dwellers in this bustling world of ours—imp whatever effort of will brain devote toward its renascence. sible or we s, taking | MY RELIGION: WHAT IT MEANS TO ME i) With it has passed without the shadow of a doubt much of the spirit- uality of our lives, our art has become distorted and uninspired, and even our national existence has felt the need of that flame of idealism which gave it color and force. The materialist today has come into his own. Yet the greatest skeptic has to admit that there 1s implanted in us, from some unknown source, together with our other inherent proclivities, certain aspirations toward a world morality, the cultivation of which brings us a measure of content and happiness | which we can gain by no other means. * % % K My religion is the religlon of the | man in the street—an attitude of, I { hope, reverent ignorance as regards | the great unsolved problems of life and death, but a desire as ona looks upward in vain, to pass through one's day-by-day life belleving that in one's | own fellow creatures there must be a spark of that divinity which else. | where eludes us, an inclination al- ways to accept the most charitable view of a fellow creature’s misdoings, to believe the & | whom one is brought into contact, and to help, so far as one can, thos who are confronted Wwith graver problems of life than we ourselve are called upon to meet. | There scems to be no other religion |1eft today for the thinking man but to worship the unknown God through his fellows, fulfilling thereby | a primitive and inherent instinct. We are few of us heroes, we all have our weaknesses, but it is always possible in yielding to them to sacrifice a little as may be the happiness o othe: The struggle to keep our place in life is forced upon us, but we I v fight fc still retain a meas for those whose our own. | * is ire of consideration We are fundamentally selfish by | the logic of necessity, forced into an | attitude of self-preservation by the {1aws of life. Still, at the cost of a little thought, we can carry on the ght without undue hurt to others, with istle effort. If the shadows of the | great abyss reveal to us nothing |of what' may lie beneath | terrifying embrace, the best prep- laration for the inevitable end, in the absence of that rare gift of abso- lute faith, would seem to be the con- viction, earned by continual effort, that the happiness creatures had been rather than marred by one's through life. (Copyrizht added to passage 19: INVESTING IN and payment on account by the ernment of compensation due, to | 1. The raflroad administra- | its part set up claims against carriers aggregating $438,130,811 se claims were the result largely 4 growing of excess expenditures the Government in the matter of enance of way and equipment the period of Federal control, compared with similar expendi- | tures made by the carriers during the | r test period prior to Fed 1 control. CGrowing out of Federal control, the atlroad administration took definite obligations of the rallroads aggregat- ing $629,241,250. Of this amount $434,- 54,250 has been collected efther by payment or sale, and the amount re- turned to the Treasury. In a single transaction the Government pur- chased and sold to the varlous car- riers 100,000,000 frelght cars and 2,020 locomotives. The entire cost of this eqiipment was $380,036.122. All of | this vast amount has been returned to the Government except a small balance of $§1,233,000. The roads with the exception of one small| company, hopelessly insolvent, have met every installment of principal and interest on these equipment trust - notes. the Th er Problems Perplexing The question of material and sup- plies presented unusual and compli- cated problems. When the railroads | were taken over their books showed that they had on hand material and supplies of every kind valued at 532,528,864, scattered all over hun- dreds of thousands of miles of track. No inventory was taken and it was impossible to take an accurate and satisfactory inventory at the end of the period of Government control. The adjustment of this claim re-| quired a checking of the amount on hand, both at the beginning and the | end of Federal control. An approxi- mate amount of $1,250,000,000 was tixed in this settlement. ‘A great forest_fire in Minnesota, al- leged to have been started by rail- roads, promised to complicate mat- ters for a time. The fire burned over 1,500 square miles of territory. Clo- quet, a town of 12,000 inhabitants, | was destroyed by the fire. More than 15,000 law suits for claims aggregat- ing $73,112,146 were instituted. Near- ly 14,000 of these cases have been se tled. The final cost of the Govern- ment growing out of this fire will be about $15,000,000. 80,000 Acres May Be Saved by Veterans in Italy Land reclamation work, with which Italy has given employment to hun- dreds of war veterans, Is beginning to approach coropletion. In all, 80,000 acres have been set aside for this pur- pose, some of the land being the gift of the King to the men who should ac- complish its reclamation. More than $3,000,000 has been granted for the work. Hitherto some of the districts have been malarious and virtually un- inhabitable. Although Italy has vast tracts of such lands which are not only useless but positively dangerous to health, it it still disputed whether it is economi- cally feasible to reclaim them. In | offered, from 1914 to January 1, 1925, FOREIGN LOANS IS STILL NEW ROLE FOR AMERICA {Money That Was Developing the Resources of This Country Now Going Abroad to Bring Out Natural Wealth Over There. By FRANCIS H. SISSON, Vice President, Guaranty Trust Co.| of New York. | The role of investor in forelgn se curities is stlll a comparatively new one for the American capitalist. We| have been international bankers only | in a commercial, not in an invest-| ment, sense. Conditions {n the United | States in the past were such that the | domestic market reddily and urgently absorbed the great bulk of American | capital and thers was no need to look | abroad for opportunities for its profit- | able use. Possessed of enormous undeveloped | resources of fertile sofl, mineral de-| posits and timber, with great areas to | be furnished with transportation facili- | ties, and with innumerable rapidly | growing communities requiring more and more public utility services, there was ample demand at home for the| accumulated savings of our people. | With a great continent of its own to! exploit, the United States devoted | itself primarily to that task and left to European capitalists the profitable field of foreign investment. | Furthermore, there was no great investing class in America, such as existed in KEurope, which was cur- rently and actively interested in for- elgn securities and had the habit of; placing its capital in them as a natural | and customary thing to do. A change has taken place, however. | since the war, due in large degree to the Liberty loan campaigns, and also | to the extraordinary prosperity in this country, as well as to our great ac cumulation of gold, low interest rates and plethora of money. This change ia reflected in the fact that at the be- ginning of this year there were listed and dealt in on the New York Stock Exchange foreign securities originally of the aggregate par value of $2.- 869.641,664 (the latest official figures available). And from January 1, 1920, to October 1, 1925, a total of $4,022, 128,000 in foreign securities were floated in the United States, of which $3,750,793,000 was for new capital and $271,335,000 was for refunding pur- poses. At the end of the last fiscal vear, June 380, 1925, the Department of Commerce estimated that the total of our foreign investments, exclusive of the amount owed to the Government of the United States by foreign gov- ernments, approximated $9,500,000,000. In this connectlon, it is interesting War on H. C. L. Subsides. That much - trumpeted campalgn of the German government against the high cost of living has come down to sporadic application of the so-called usury laws. Recently the Reichstag voted a law which proclaimed high profits usury. Now police squads visit the various shops and examine the books. If the met profits are more than 15 per cent the owner is fined heavily. Curiously enough, it has been other words, it is belleved by some that the produce of the reclaimed lands will not be sufficient to pay off the amounts of money expended on them. to note that for the first six months 25 exports from the United States to Germany were almost double those for the first half of 1924. Moreover in the earlier period less than 1S per cent of the total German imports were from the United States, and this year they were almost 23 per cent. The | increase is gaid to be due to the ease with which the Germans have obtained credit the United States. Trade and credit are closely interwoven. ‘With our great productive capacity there should be little doubt of our ability to make loans, provided the other parties to the ti actlons can show the necessary nd will ingness to pay. The negotiations at Locarno give hope of a better state of affairs in Europe. Any recovery on that continent sho lead to a greater demand for not only our products, but the raw materials of Asia and the countries of the Southern Hemisphere Such demands, In turn, increase the need for capital for the development of resources of those countries. (Copyright. 1925.) 'AMERICAN SCIENTISTS TO ENTER GREAT ICECAP OF GREENLAND Start Next July An_expedition to penetrate into the| interior of the great ing Greenland and learn the sec ice sheet cover- rets of .| the weather in that area is being or- ganized this Winter by Prof. W. H. | Tiobbs of the University of Michigan, ,an_authority on glaclers and geology Equipped with planes for pre- | liminary exploratory work, with radio | apparatus adequate to maintain con- stant communication with the outside world, and with scientific instruments to record meteorological data and ob- | serve the movements of the great Greenland glaclers, the party to be headed by Prof. Hobbs will start for the far northern Danish island conti- nent of Greenland in July of next | vear. | “One of its objects will be the estab- lishment of a w her observing sta- | tion on the grea {150 miles inland, und 6 | feet above sea level. Never before has this been accomplished. Prof. | Hobbs plans to maintain an observing | staff at this station for a vear in or- | der to give to the meterologists of the 00 to 7,000 NATIONS OF EUROPE LOSING HOLD THROUGH FIGHTING EACH OTHER Downfall of Imperialism Best of Their Breed in Handwriting on Wall. Has Been Killed Off, Says David Starr Jordan. BY DAVID STARR JORDAN| In France, in 1913, the present writer heard an explanation by & leading London banker of the rea- son why no British bank would lend money to the governments of France, Germany or Austria. “We can read the handwriting on the wall,” he said, “and it spells repudiation. The people of these countries will say, “We know that we have received all this money and that we have spent it on armies and navies. We know that we ought to pay it back and with interest, but we cannot. We must live and we cannot, it we This was before the World War, when the total of Europe's national debt was about one-tenth what it is at present and before our own Na- tion had loaned to Europe without security a sum equal to all the gold cotnage of the world. Downfall of Imperialism. And now, however we may regard the results of the war, the sole reality in the diplomacy of Europe is repudi- ation; its necessity and the methods by which, in whole or in part, it can be most respectably accom- plished. When nations are on “the race for the abyss” (la course vers rabime, as my French friend, Prud- homme' styled it in 1913), it is easy to read the handwriting on the wall. It will not be erased for a lifetime. Another writing_on the wall today is clearly rising. It spells the down- all but proved that not the retailers but the producers and wholesalers are reaponsible for the high prices. fail of imperialism. More explicitly it reads: All roads in Asia and Africa lead outwmrd for good or evil —and much of both. The control by Europe or America of the backward nations must be relaxed. The “white man'’s burden” is bound to be shifted. For this several causes are evident. The nations of Europe have lost prestige by their suicidal destruction of one another. They have lost thelr power, their people have lost heart, and in a large degree have lost character. They have killed off one another's best, never to be restored. Breeding from second best or still lower is the last and most killlng cause of the downfall of any nation. “Send forth the best ve breed” and the stock has never been, can never be, kept up. Europe Losing Hold. Men see, with Lincoln, that “no people is good enough to govern another against its will.” No doubt Europe can handle Asia or Africa better than the people who swarm in these regions. But most races prefer self-rule to good government. And now that Europe is visibly fail- ing to care for itself Asia and Africa are showing her the door. The roads all lead outward. Senator Phelan quotes from a good lady in Dublin: “Thank God, the British are out of Ireland and we can now fight in peace.” It is the growing will_of all the backward tribes to see Europe out of the way so that they “ean fight in peace. And whether or not, we welcome the shifting of the “white man’s burden.” the handwriting on the wall in 1925 is just as clear as it was in 1913, (Copyrisht. 19260 t plateau of ice some | Expedition Being Organized to Study Weather Se- crets in Vast Unknown Region—Party Will for Far North. rorid information about the behavior of the weather in that part of the | world which seems to be the place { where storms either are born or dle. The data to be radioed to civilization are expected to aid materially in the | making of the daily weather forecasts |1n Canada and the United States. The expedition will be under the auspices of the University of Mich- igan, where Dr. Hobbs is professor of geology. Several American gov- ernmental bureaus interested in the scientific problems of the Arctic have promised active participation in the expedition, and the expedition also will co-operate informally with Dr. Lange Koch, leader of the Danish govern- ment's scientific party, which will | take the field at Scoresby Sound on the east coast of Greenland in July. 1926, at about the same time that | Prof. Hobbs' party is establishing its | base nearly directly opposite on the )\\‘t‘fi coast of Holstensborg, just be- { low the Arctic Circle. Dr. Koch, | Who has had long training and e perience in explorations in Greenland, will trek directly across the continent of Greenland from east to west, mak- ing sclentific observations during the two months' journey. Previous to this he plans fo map and investigate the geological features of the un- known portion of the west Greenland coast. Will Use Sounding Balloons. Regular exploration of the wind currents and temperatures of the upper air will be a feature of the routine observations at the two sta- tlons to be established by Prof. Hobbs. Large rubber sounding bal- loons will be used for this purpose. Since the inland tation on the ice sheet will be over a mile high above the sea, and the coast station off the edge of the glacial ice will be over a half-mile high, it is expected that the balloons will succeed in probing and revealing the weather secrets of un- usually high altitudes. At least two airplanes with pllots and mechanics will be a part of the expedition and the rest of the party is now In the process of organization. Radio communication on short wave length will be provided between the two stations as well as with the United States. o Earn Living by Combing Paris for Lost Articles In Paris has developed recently a new profession, that of “finders of lost property.” Several men who dislike working in close rooms for small remunerations have formed an association, and from early morning till sunset they wander through the streets looking carefully at the sidewalks and under the tables and chairs of the many open-air cafes. If they find an object of value they wait for a day or two to see whether the loser offers a reward through the newspapers. If this does not happen they take the finds to the police sta- tion, which pays them 10 per cent of the estimated value of the objects found, either when the loser comes to clalm it, or after a year, when it is sold at uyction @ unclaimed property, st of every one with | our own hand and | interests clash with | some blending, indeed, of aitru- | their 1 of one's fellow | BY FRANK H. SIMONDS. HE profound difference be- tween the American &and European systems of govern- ment contributes not g little ! to bewilder and confuse the | American observers of the present {acute crises fn both Germany and | France. In both Berlin and Pads today there is something like a paralysis in the respective Parl | ments 2nd the crisis in each case | conges at a moment when great is- | sues are at stake. In Berlin the { fate of the Locarno pacts is in th balance, in France the financlal sta- bility of the country. Neither in France nor tn Germany | at the moment does the party s | tem of government, as we know it, exist, nor is there even a remote chance that a new election would | make any real change. In both na- tions there is a coalition cabinet; in France, radical, and in Germany, reactionary, yet the majority in France Is patently less radical than |the cabinet, while in Germany the |reverse is the case. If the Locarno pact is to be saved in Berli | votes will have to come from Sociallsts, who today constituts opposition, while rance is to aved financially from such dange! ous experiments as the capital levy, it must be because of the action of the Conservatives Not Solidly Republican. | The present | cabinet represents the fi erman | governinent since the revolution which is not all Republican #1d the | expression of the will of the partles which are known as the Weimar Bloc because they support the re- public and the constitution made at | Weimar after the revolution. Prior to the present cabinet all govern- ments have rested upon the Reich- stag support of the Soctalists, Der s, Centrists and & scattering | representatives of ~smaller that 1s, upon the outand-out | publicans. | " The existing cabinet, by contrast ireprcsenled at the outset the combi- nation_of the Natlonalists, who are the old monarchist elements, with the People’s party, representing the great industrial interests, tdgether { with the two bourgeois parties, the | Democrats and Centrists. This com- | bination was made upon purely do- mestic {ssues and with the tacit un | derstanding that the issue of repub- | lic or monarchy should not be raised. Re. A majority of the two bourgeois par- ties and all of the People’s and Na- tionalist members are conservative on | economic questions and thus agreed in the most important domestic field Conservative Combination. The combination was made to re strain the radical and Socialfst ments and to give Germany a servative administration. it repre- sented a rgain by which the agri- cultural interests, which predominate in the Nationalist party, and the in- | dustrial and business eiements in the other parties should work together to obtain a desirable form of tarif, protection for farm products and for manufactured articles. There was also the well understood purpose to face labor and restrain its efforts to get short hours and high pay. In a word, the Luther-Stresemann cabinet was a capitalist and conservative combi- nation. But by contrast, while the National- ists were unitedly monarchistic, the People’s party is divided on the issue and united in believing the moment for the restoration of the throne has not come, while both the Centrists and the Democrats are frankly re- publican. This fundamental cleavage | was well disclosed during the rece | presidential campaign, when the Cen trists and Demoerats supported Marx, | himself a Centrist, while the Nation alists enthusiastically and the People's |party with some hesitation bached Hindenburg. At the present moment the People’s party, the Centrum and the Democrats are all enthusiastically supporting the Locarno pact, but the Nationalists have not only opposed it but have now withdrawn their members from the cabinet. Should they definitely decide to withdraw their support in the Reichstag the cabinet would fall, because they furnish nearly half of the necessary votes. New Coalition Doubtful. The obvious course, then, for Luther con- new coalition, this time with_the So- | ciallsts, who have nearly a% many votes as the Nationalists and would naturally support the Locarno agree- ment. But such a combination would be difficult to make for the simple reason that on practically all other questions the People’s party, the par of the great industrialists, is at odds with the Soclalists, who are the party of labor. Moreover, the Socialists are in a position to make very awkward demands upon the other members of the coalition. In reality, there is no real basis of agreement, for the Nationalists at one end of the Reichstag are against all policies which might lead to concilia- world. They still think and talk and act as if there had been no war, no defeat, and as if Germany were capable of going her own way, organ- izing her resources and in due course of time challenging all the territorial decisions of the war. They are un- willing to recognize the loss of Alsace- Lorraine as final and they insist upon German military strength. Théy want to go back to 1914 and they are un- willing to concede anything which might prevent this. At the other end of the chamber are the Socialists, who are not only resolved not to go back to 1914, and to preserve the republic, but are also seeking to establish in the domestic life of Germany a whole variety of radical policies. Now between these two groups, which are almost equally strong and constitute close to half of the Reichstag, are the other par- ties, which are in the main republican, either definitely or as a matter of temporary opportunism, but are also naturally hostile to all Socialistic pur- poses. Basis of Agreement Needed. The main difficulty which Luther or any other chancellor must face is that of finding some basis of agree- ment elther with the Socialists or with the Nationalists. Broadly speak- ing, it is fair to say that Germany at the moment tends to hold the So- cialistic view with respect to the republic. That is to say, a majority of Germans at the present moment fa- vor the republic, either as a matter of principle or as a matter of expe- diency. On the other hand, it seems Just s clear that & majority of Ger- =t groups; | and Stresemann would be to make a | tion and adjustment with the outside | SACRIFICE OF LOCARNO TO SQUABBLES IS SEEN Groups Favoring Pact in Both France and Germany Meeting Opposition on Domestic Issues. mans are opposed to the radical S clalist policles in domestic politics. If the Locarno pacts were mitted to a plebiscite there is ver little_question as to what_the resul would be, for the people of Germans broadly speaking, want peace; tic people of the occupied areas want to end the occupation, and the busines Interests want foreign loans. ¢ |other hand,- a majority of the Na tionalist party is certalnly opposed t the pacts and to the recognition @ final of the loss of Alsace-Lorraine. A for the Socalists, having cluded from the governmen can very well refuse to partic | the voting, putting the responsibilits for the resulting failure upon the e isting tionalist - Bourgeois blos which negotiated the treaties bu could not carry them through. Treaty May Fall. Locarno may then very eas | between two stools in Berlin | cause the majori f the people are hLostile or cheri: ligerent purposes, but because the mestic political ¥ s0 complicated that be decided on sub not be ists, backed and the mic qu at least It {any support be spl; should supply the ratify it nothing that the temporary Bourgeois parties k up, and t 1 rew s more would ard fo P ists r extreme wing It is therefc American audier the German aci | pact does not o satlsfying test of t ity at the moment on the sue of war or [ defeat will not a final proof o Germany; it can sufficient advertiser dominance of the spi Germany. Situation in France. necess: the Turning now to tt ion, the Painleve «¢ ferriot cabinet pon a comiy tadicals and ‘artol des G | ical parlance. itive “it, 13 based ele- | | as long a 108 votes of the Soci have these votes In general, French people riot and Painle a settlement w | elgn policy, in | the present comtl a policy of Justment—is th the reaction of neople against the harsh and minatory cour of Poincare and Millerand. But by contrast the majority of t! French nation is by cal as the Cartel ¢ are a long way fr in the narrower office both err been elled to a octalistic doctrine duced the utmost | roar in French domestic American observers ut only the evidences of tion of the radical elements to mal peace abroad, the Irenchman sec daily the deplorable result of the d mestic policy, which represents fut concessions to the Socialist: has pu and a e ion and sirs. Wh listance the determin a Same Trouble as Germany. You say the thing quite exactl vou say that France at the mome wants peace abroad, that peace whicl the Painleve cabinet is working f through the Locarno pact, but by cor trast it wants a peace at home als which the Radical-Commynist-Sociali | combination cannot give ft. In a was the thing is on all fours with the German mess. The German peopls want, I think it is a safe ju ment to make, a_government which is concilia tory abroad and conservative at | home. They want to make peace in Europe, but the majority does not want at the = ne time to adopt ex treme socialism in the Reich. But the party which stands squarely for domestic’ conservatism refuses abso. lutely to adopt the policy of concilia tion abroad, while the strongest part which advocates concilation abroad is commliited to soclalism at home. In France the Painleve cabinet pretty accurately follows the will of the mation in its foreign policy, but in domestic affairs its weak and yielding policy, made under Socialist pressure, has been for more than a vear almos insufferable. But the alternative in | France is Polncare and the old un bending and unforgiving spirit toward Germany which was expressed in t occupation of the Ruhr. In Germany the choiee 1S between the Junker with no Locarno and the Socialist with Locarno and an amount of Soclalism which it is almost impossible to fore- cast. The elimination of Caillaux does not much improve the situation of the Painleve cabinet, for Caillaux. his war record, brought the cabinet a measure of support from the Conservatives because stood firmly against the capital levy. The Conservatives were eager to see Cail- laux ruined, but they were not above using him for the moment. What they refused to do was to permit him to come over to them and make & ne combination, bringin~ certain strength from the Left; when he had been dis- credited at home, then they were quite reconciled to seeing him go back to the exile from which he had tem porarily emerged. Both to Continue Conservative. Both France and Germany are fun damentally conservative countries so far as economic issues are concerned, although in both countries there is much more effective radicalism than in the United States. Germany prob- ably is more conservative than France, but has, nevertheless, under the em- | pire, gone a good deal further than France in adopting many socialistic ideas. Moreover, in estimating the German state of mind, one has to bear in mind that if Germany did es cape a really disastrous revolution in 1918, it was only by a narrow margin (Continued on Third Page.)