Evening Star Newspaper, January 3, 1932, Page 23

SUNDAY -STAR. WASHINGTON, D. C., . JANUARY " 3, 1932—PART TWO. CONGRESS’ STA REPUDIATION OF DEBTS D MEANS l \ Disillusioned Europe, Certain to Refuse Payment Facing U . Res entment That Will Ban Further Lending. BY FRANK H. SIMONDS O aspect of the recent explosion in Congress is at once so inter- esting and so significant as the opean_repercussion it pro- cuced. Not since the United States Senate rejected Treaty of Versailles has there been such an un- expected shock to foreign statesmen And what is odd and not unamusing is that European opinion again was r Jed in precisely the same fashion. or rather, misread the signs, in the iden. tical manner it did 13 years agc At the Paris Peace Conference was impossible any American persuade his pean friends t there was any doubt of the abi Woodrow Wilson to carry a majc the country with him for the of Nations project. After last June all Europe clurg to the belief that under the leadership of Herbert Hoover American opinion had at last accepted the view that debt cancellation and reparations abolition were the inescapa- ble steps in economic and financial res- toration It is true that t Jected the Wils gress has ad torfum, but the moratorium resolt adopted by the it fc League enate finall; program, while Con pted the Hoover mor: rider” tacked to the ition by the House and nite. and the cha acter of the de e on the propos: gerved to warn Eurc that sen in favor of cancellation or even of an real scaling down of debts was re- stricted to a politically inpotent, if im- pressive, minority Shock for Europe. It is hardly possible to the shock this revelation constituted for Europe. It was a clear evidence of the fact that during the life of the present Congress, that is until March 4, 1933, there exists no prospect whatever of clearing up the world’s financial and economic mess in accordance With European prescriptions. ‘The shock did not come from the fact that the moratorium itself was challenged. Europe was fully aware that, since no money was available to pay debts. that issue was purely aca- demic. The real disillusionment arose from the circumstance that during all the years since the end of the World War~ Eurove has never ceased to be- Yeve that in the end the United States would cancel debts. As a conseouence all the varions ar- rangements (and notablv the Dawes and Young plans) have been regarded as temporary affairs designed to tide over the period required for the Amer- fcan people and Congress to arrive at the state of mind Europe always ex- pected would come sooner or later. In secret conversations at all international gatherings since 1919 there has been the frank recognition that all adjust- ments were provisional until America came to see the question eye for eye with Europe. Last Summer, when the Hoover mora- torium was announced, from one end of Europe to the other there was an outburst of joy, an acclamation of the long-awaited hour. When France halt- ed the process, the burden of European denunciation was based on the assump- tion that Prench obstinacy would change the American mood. Even today the German press bitterly assails France as responsible for the present attitude of Congress. Very Certain Consequences. But it is essential to perceive that the disfllusionment of Europe must have very certain consequences. Eu- rope has been waiting for 13 years to make a final adjustment of the finan- cial consequences of the war. It has been waiting. hoping. watching for the moment when American opinion would riven to the necessary point. Now, while it is clear that American opinion has not ripened, *waiting is no longer pessible. Hitler and Bruening in Germany— that is, the revolutionary and the rul- ing leadership—have proclaimed their definite agreement on the question of reparations payments. For all prac- tical purposes Germany—the whole German people—have repudiated the reparations clauses of the treaty of Ver- sailles. To attempt to revive them would be to provoke a domestic revolu- tion in Germany. Moreover, the for- eign experts passing upon the German situation are agreed Germany cannot pay for at least two years, and all save the Prench experts place the time as much more distant when German ca- pacity might be restored. What then remains for the various countries which owe us on account of allied debts? Obviously, they must at the end of the Hoover moratorium year face the alternative between repudia- tion and payment. It is true that un- der their debt agreements they can still seek moratoriums, pleading temporary fncapacity to pay. Thus for a brief time further they can evade the main issue of repudiation From the very start of the whole debt settlement episode the conception of the Furopean nations owing us money has been to collect from Germany to pay us just as long as we insisted unon being paid. And for six years they were able to do that because we we ready and willing to lend Germany the necessary money to pay them. Europe believed that when we had lent C many vast sums we would be willin cancel war debts in order to col these private accounts. Europe saw in the Hoover moratorium the proof posi- tive that we had at last decided to sacrifice the governmental for the pri- vate debts. Europe knows better now, but its situation is hardly happy If the United States will not cancel exaggerate war debts and will not lend Germany more money to pay reparations, then all our European debtors—and Britain, France, Italy and Belgium in particu- have to decide whether to repudi- te or carry the burden themselves. In practice France and Italy have already decided. Actually Italy cannot and France will not pay. And it is safe to predict that Belgium will follow France Moreover, the French have an admira- ble position, because they can prevent any collection of private debts in Ger- many while their claims to reparations are unsatisfied All of which means in simple terms that before long the British must face the issue of repudiation. And nothing is more significant than the fact that, follow the congressional debates, the word repudiation appeared for the first time clearly and unmistakably in all shades of British journalism and pub- lic opinion. The recriminations show- ercd upon Senator Reed of Pennsyl- ania because of his tabulation of Brit- ish assets illustrated British feeling. Repudiation would be a humiliation without precedent in British history. The collapse of the pound sterling was a blow to British prestige, but the ne- sitv to repudiate the American deot be a blow without parallel to h pride. present British view is not dic- ated by eny desire to evade a debt hich could be paid. It is not because British are consclously and delib- trying to get out of an obliga- at they resent the American On the contrary, it is necessary ive that every element in Brit- tional life shares the conviction t payment is beyond British capac- that Britain is fighting for her eco- nomic e against appalling odds. ‘The Englishman sees himself with his back to the wall, as Haig told his sol- diers in the supreme crisis of the World War in March, 1918, and in that mo- ment he fecls that the United States is iving with a bill and demanding payment when the only alternative is a humiliation beyond words. But, apart from the particular Brit- ish state of mind, there is a general European point of view. That is that the whole continent is sinking in ruin and that the ruin will be of enormous consequences to the United States. And Europe has through the years gotten itsell_into the state of mind of believ- ing that all its troubles would be ended —or at ‘least the first long step to re- covery would be taken—once America canceled debts and the allies similarly abolished reparations. The second step is always contingent upon the first. An Illusion Abolished. The action of the American Congress is one of the few really decisive epi- sodes in post-war history because it has abolished an illusion Which has all along prevented realistic thought in Europe Refusal to cancel or scale down debts will not insure the return to the United States of a single dollar of these debts. Europe will not pay another red cent. But that decision will compel Europe to go ahead and face the fact that it is not going to get cancellation and that it must come forward frankly with re- | pudiation. If it does not now come forward frankly, the situation will be unten- able, because reparations actually have been repudiated and are prysically ir- | recoverable. One then may look to see a gradual drawing together of our European debtors, of Britain, France, Italy and Belgium, and the formulation of some concerted program of repudia- tion. They are all in the same boat now. The British undertook to re-es- tablish their financial situation in the | world by making the debt settlement | with us. It was a step in restoring the pound sterling to equality with the dol- Jar, and thus in the recovery of the financial primacy compromised by the war. But the step failed. Tre odds against the British were too terrific. Nevertheless the British course en- tailed debt settlement by all the other associated powers. Instead of standing together, they came separately to Wash ington hoping to make better bargains Now there is a common interest to bind them all. As for Germany, cancella- tion of debts means formal relief from the obligation to pay reparations, there- fore her interest is rather with her European than with her American foes of the war. What is crystal clear to all Euro- pean minds is that, if there is any sort of a repudiation of the war debts, such repudiation will create an American resentment which will constitute a bar- rier to any new investing or lending in Europe for a long time to come. And Europe is still firmly convinced that the restoration of its prosperity. particu- larly the restoration of Germany, must be brought about by American capi- tal, or at least by American and French capital working together. The action, of Congress, therefore, has forced the issue of repudiation Next June the allied debtors must either demand a new moratorium or an- nounce a frank repudiation. And in tre American mind it is clear that the emand for further moratorium would be judged a disguised repudiation. In the midst of a national political cam- it would be seized upon by all politicians. 1In fact, the expiration of the Hoover moratorium coincides with | the meeting of national conventions. | With this in mind can one mistake | what the platform declarations of both | parties will be? Once platform pledges | are made—breaking them will not be easy 1932 (Copyright Rumanians Scorn Critic Contending <« Is arcophagu Despil archeo- CONSTANZA, Rumania the fact that a professor logical renown here pronou cent, well preserved and valsable sar- cophagus unearthed here one b Jonging to & nouveau riche, a supplier of meat to armies of the first centuries the city authorities of this ancient port apparently without comment or discus- sion, have placed it on the (Vv'\ B¢ re 17t front of the ¢ all d b noble bronze statue of O the p-ople say it must have ced a ye- the whom Fida of conle are reluctant torr, an his magnificen ate sepulc could h some person or only city honor In defense of the people’s determin: tion to believe that they have at lastd covered their celebrated and exiled po€ a champion has come to their cause and by what may appear to some as an ingenius method has “proved™ that the intuition of the people has in no man- ner led them astray to whom the owes Cites Lack of Inscriptions, The professor held the Ovid theory up to ridicule and “‘conclusively proved” to the so-called enlightened that the giant marble container had been the resting place of & vulgar illiterate, be- cause it contained no inscriptions, but instead only the heads of animals, & key, a simple lock, a chain. a bell and 8 pair of scales—all of which might have been dear to a man owning great herds. The defender of the people’s faith and hopes opened his attack by stating that neither did the tombs of Alex- ander the Great at Constantinople or of Cleopatra at Cairo contain written nscriptions, but only symbols, while Not Ancient Poet’s that especially in Ttalian and Jugo- museums there are numerous carcophagi without inscriptions and that all know that the great Pharaohs had no inscriptions upon their tombs and probably for the reason that a name would have been an invitation to rob. Key Hunted in Symbols The two groups of symbols on tomb about which the controversy n each contain seven objects rs of which spell out the name e poet Publius Ovidius, which, ac- to the late theory. proves that 1genius person and devoted ad- poet—ijf not the poet him saw to it that his remains would t be forever lost Within the near future a well known hitect will publish & book proving that the artistic and decorative work on the Constanza sarcophagus belonged to the epoch of Ovid. In the meantime others less interested in scientific facts and much less in endless discussion: say that Ovid having honored the; city and port by adopting it as his home and last resting place, must be made the patron saint of their newer and greater modern port. (Copyright, 1932) the has he Buy Freely! Prom the Eioux Palls Daily Argus-Leader Senator Nye wants to hold down next year’s cimpaign expenditures. The big ‘dea at this time, we thought, was to encourage every one who can spend freely to do so. | Get the Gats! | From the Cincinnati Times-Star | Before certain Senators “get behind | nomic Machines to Lick Jungle ations of Latin America Try to Beat Back Forests to Better Condition:s 3 55-CENT WHEAT HELD CAUSE | | Rise in Grain Price OF CURRENT DEPRESSION May Decide Fate of Political Parties—1932 QOutlook Clear. BY MARK SULLIVAN, HE forecasters this first of Jan- uary are going to be gun-shy. Most of them went wrong last January 1 and nearly as many the January before. Their er- rors have been collected by a cynic into a book called, derisively, “Oh, Yeah!” They feel they are discredited before the public and their inner self- confidence has been sapped. Yet the truth is, rarely has the pat- tern of a future year lain so clear to the eye as that of 1932. It lies not in the form of a design pointing toward one outcome or anotker. It does take the form, however, of a completely clear set of alternatives—alternatives | | having to do chiefly with what Con- | gress does—or does not do—about cur- | | rency and credit. AN AMERICAN TRACTOR CROSSING THE MAGDALENA RIVER, IN COLOMBIA, ON ITS WAY TO THE BATTLE WITH THE JUNGL | BY WALLACE THOMPSON. ODAY, in the midst of the world depression, and in a moment when for the first time in its modern history therz is a sur- plus of labor, the Argentine Re- public is laying down broad plans for the erection of 600 grain elevators (the first of thousands that will be built), for the construction of thousands of miles of roads into the wheat lands and for the purchase of fleets of truck in which the grain will be hauled to the elevators. It is a project revolution- Ary In its scope, for today every bus of wheat from Argentina must be sacked and shipped by wagon over the open pampa, and thence by ancient Euro- pean-type freight cars (from which bulk grain would leak like water) to the YEAR IN LATIN AMERICA NOTABLE Democracy Gains as Elections, Coups and Reversal of Flow, Taking 10,186 Amer- ators at shipside, where at last the \ s emptied from its sacks and iled in bulk to world markets erwhelming reasons are incit- rgentines o this plan. One is to reduce costs to compete The other is the fact that in ha. as everywhere in Latin there is, in normal times, not enough labor to do the work that has to be done. To meet these two condi- tions, it is calling upon the machine e Latin America, despite low for labor, has learned that the s of modern agriculture and are vital to supply its lack of and to wipe out its handicap of her costs of production, which chained its workers to the lowest stand- ard of living This lack of labor presents the one Two 0 ing the the abrea Arg America need wag! mac FOR REVOLTS Uprisings Oust 13 Regimes. Two Rebellions Fail. BY GASTON NERVAL. INETEEN - THIRTY - ONE will pass into history as a year prominent in Latin American politics Below the Rio Grande 13 new governments were inaug! ated dur- ing the year as the result either of revolution or popular elections, not in- cluding several temporary regimes which lasted scarcely a few days and only served as transition steps in a move- ment of widespread political reorgani- zation In seven of the Latin American re- publics open revolution broke out in 1931 and in five of them revolutions were successful. In four more of th minor, isolated attempts at rebell were quelled at the start. Elections Maintain Balance. On the other hand, seven presidential elections were held throughout Latin America during the year, some of them precisely in those countrics in which revolution had set up military juntas a few months before. These elections were said to have been the freest that Latin Americans had seen in many years. They were held in a peaccful and democratic way, much in contrast with the violent methods employed not long before in overthrowing the old governments A balance, therefore, is more or less maintained. The liberal and demo- cratic elections through which consti- tutional authorities were chosen in cer- tain of the Latin republics make up for the violent changes which were inevi- table in others. And even these violent changes, with one exception, should be held more to the credit of Latin Amer- ica than against it, because they were amply justified by political and eco- reasons which differentiated them from the old-fashioned and pure- ly personal revolts characteristic of that part of the world some decades ago. Five Revolutions Successful. The five successful revolutions were those in Panama, Peru, Ecuador, Chile and El Salvador The sun of 1931 had hardly risen when a revolution broke out in Panama early in January 1 termed this, at the time, a “logical revolution,” for who- ever knew the conditions existent in Panama would have understood that a revolution was the only way out of a chaotic situation of administrative dis- order and dishonesty A clique of three men who had suc- cessively governed the country for the Jast decade with very little respect for the sovereign rights of the people and even less concern—so it was gnerally charged—for the Trevenues Tesulting from their tixes, were arbitrarily ruling the destinies of Panama with the help of a small and vicious circle of politi- cians. The Chief Exccutive was only instrument of this machinery, his 1 decessor being the real force beb the presidential chair Peruvian Revolt Made Serious. Paradoxically as it seems, the Pan: man revolt provoked a “legal” cha of government. The man designate by the constitution to take the | reins in absence of the President was called to head the new administration. In response to this call, Dr. Alfaro, then Minister to Washington. hurried back to Panama and was solemnly inaugu- | rated by the Supreme Court, after two weeks of provisional government pre- sided over by Dr. Arias, also in accord | with the provisions of the Panaman constituiion. In Peru the trouble was more seri- ous. It was not a single and rather bloodless movement as in Panama, but a serics of isolated outbreaks. which finally resulted in a nation-wide up- rising against the rule ~f Provisional President Banchez Cerro. Sanchez Cerro had been in power only a little over six months, having arrived there | by the overthrow of the 1l-year | Leguia dictatorship, which he had en- gineered and conducted, but in_this the latter was a near contemporary of | Hoover” somebody should search them | short period of time the new ruler, the poet Ovid. He further pointed out ! for concealed weapons, ( { a man of “strong hand” and great per- sonal ambition, already had alienated his_previous popularity and prestige Sanchez Cerro's arbitrary methods and his avowed design to have himself elected constitutional President of the | country had aroused bitter opposition to his temporary rule. Such opposi- tion finally resulted in a series of armed uprisings, which did not stop until he was forced to resign and leave for Europe as an exile. His elimination, however, did_not entirely end the political ills of Peru Unrest continued throughout the coun- try and it was not until two more provisional governments had been set up and almost immediately obliged to dissolve that a regime satisfactory to all sectors of public_opinion was es- ablished, with Dr. Samanez Ocampo at its head. Ibanez Ousted by Chileans. In Chile the revolution had been rather expected for some time. Gen Ibanez was one of the few remnants of the dictatorial type of ruler who enjoyed wide popularity throughout Latin America during the last few years Criticism of his contempt for public liberties had become more acute with the overthrow of similar personalistic regimes in the neighboring countries— Bolivia, Peru, Argentina—during 1930 This criticism was augmented by .the failure of the government to confront the grave financial problems resulting from the economic depression g When this opposition first showed its tceth President Ibanez attempted to re- sist and several lives were sacrificed “in defense of the constitution” ~both parties, of course, claiming that they were defending the constitution. Finally when he realized that he could count no longer with the army, his main sup- pert throughout his whole regime, Pres- ident Ibanez resigned and fled to Ar- gentina. Ecuador Changes Quietly. Here, too, several changes of provi- sional Chief Executives were necessary before an impartial temporary govern- ment was accepted by the different po- litical parties and the armed forces which had brought to an end Ibanez's re The wild popular applause Which giceted the Chilean dictator’s over- throw was still being heard across the Andes when another South America Chief Executive stepped out of power. This time it was the turn of Dr. Isidro Ayora, since 1926 the undisputed head of the small but progressive Republic of Ecuador. T Confronted with bitter opposition in Congress and a hostile public_opinion, the man who had ruled Ecuador with a strong hand for the last six years suc- crmbed the latter part of August to his cnemies. Handing in his Tesignation— an “irrevocable” onc—the severe, labori- ous President made a gracious exit, quite in contrast with that of his colleagues, who were ousted by force of arms, in other Latin American nations during the 12 preceding months. EI Salvador Follows Suit. Instead of daring to resist public opinion and thus precipitate & conflict— Which other Latin Executives did not avoid—Dr. Ayora was sensible enough to realize that he had lost the confi- dence of the people, and he had the honesty to proceed accordingly. He did not wait until conditions were extreme and violent incidents had led to blood- thed and internal disorder. He foresaw these and prevented them by stepping aside. A military junta took provisional control of the government, headed by Col. Larrea Alba, who had been minis- te= of war of President Ayora. Finally, only a few weeks ago, the last of the 1931 revolutions which were suceessful in Latin America overthrew the government of President Araujo in El Salvador. This is the one exception | T referred o at the beginning of this | article, when I contended that the vio- | lent changes of government which the | Southern continent had experienced in | the last year and a half, with o (Continued on Fourth Page. ne | can-born. The leader of the farm move- unanswerable reason for the enthusi- asm of those who see in Latin America a vast market for the products of our factories for generations yet to come And the availability of the machines which the United States has evolved to solve the problems of limited and ex- pensive labor is the basis for the assur- | ance that Latin America will yet mas»! ter the development of its untouched wealth of field, forest and mountain. - | | Fighting Out of Slump. | Already Argentina and a dozen other | countries are fighting their way out of the depression by concentrating their energies and their forces—rigorously curtailed, as they temporarily are, by low commodity prices—on preparing | themselves for competition in world ! markets on the terms that the world| " TIDE OF MIGRATION TURNS S. BACK TO CANADA FROM U. icans With Depre | ONTREAL.—The tide of Cana- dian migration to the United States has stopped. More than that, it has turned, | and today more Canadians are coming back than are departing. What is even more notable, a flood of Americans are following in their wake Canadian statesmen, formerly “viewing with alarm” the loss of Canadians, have lived to see economic conditions do | what no law could do—bring Canadians back home, and Americans with them to find new homes | W. A. Gordon, Canadian minister of immigration, has just made public the fact that in the first seven months of the present fiscal year, 13,641 Cana- | dians returned to Canada and 10,186 Americans came with them. In 1925, 122,181 Canadian-born citizens went to | the United States. In 1930 only 42,127 | departed, while in 1931 the total migra- | tion from Canada to the United States was 21,687 persons of whom 3,000 were | not Canadian born. American Movement a Surprise. | 1t is surprising that 10,186 Americans should have come to Canada under the present rigid Canadian immigration law. Canada always has encouraged | British immigration and opened the coors wide. Yet in the same period only 6,138 Britishers arrived There is another factor. Within the last year nearly 5.000 persons have been deported from Canada, having be- come public charges. Of these, 3,231 were British, while the American depor- tations were so negligible as not to be| listed. Americans are making good in Canada. | Michigan always has been the source of most of the migration to the Do- | minion. In the seven-month period 2265, or more than one-fifth of the 10,000, came from that State. New York | State was second with 1,551 and Mas- | sachusetts third with 1099. Next in line were a number of States sending | around 500, including California, Illi- | nois and Washington. Between 300 | and 400 were from Ohio-and Maine. Between 200 and 300 were from Penn- sylvania, Minnesota, New Hampshire | | and Connecticut. Between 100 and 200 came from New Jersey, Montana, In-| diana, Vermont, Rhode Island, Oregon | and North Dakota. States less than | 100 were Alabama, Arizona, Arkansas, Colorado, Florida, Georgia, Idaho, Towa, | Kansas, Kentucky, Maryland, Missouri, Nebraska, North Carolina, Oklahoma, Tennessee, Texas, Utah, Virginia, Wis- consin and Wyoming. The other States sent from 1 to 20. | Newcomers Must Have Funds. | For the most part the immigrants | were farmers, mechanics and traders Canadian regulations provide that the | newcomers shall have enough capital | to insure them a good start and that they shall not become charges on the | Dominjon. Of recent years another | | regulation has been added—that they shall be American citizens. A great | many non-Americans seek to enter Canada as bona fide citizens of the United States, but it does not work. It is estimated that, for every immigrant | admitted from the United States, two or three are turned down. Glving their occupation as farmers were 1429 men, with 647 women and | | 1541 children. ' In the trading class were 1,028 men, with 487 women and | 268 children. There also were 898 me- | | chanics, with 112 women and 199 chil- | dren. The Province of Ontario is the | preferred new domicile for migrating | Americans. Nearly half (4,562) gave | that province as their destination | Quebec, with 2,343, was the second choice, The prairie provinces, usually the | promised land of the farmer, have been | ‘mra hit by crop failures’ in recent years, and there has been a falling off |In migration save to Alberta, where there is a large percentage of Ameri- ment in Alberta and president of the sets down. They sce. what some of us cannot yet see, that the battle for future prosperity will be half won when th2 tools are at hiand—tcols in the shape of machines for the conquering of the jungle that has never before been conquered | Examples mount upon one another. | The highway system is advancing at different speeds in every country, but everywhere they are preparing to make use ‘of modern transport. In one in-| terior state of Argentina, when it was| decided to build roads as an unem- ployment relief measure, the roads| were laid out and the farmers called to the work, but not with pick and shovel. No. the state first bought| $200,000 worth of road-building equip- ment—power shovels, tractors, scrapers | (Continued on Fourth Page.) | it = It, Laid to ssion, . | | wheat pool was born in Missouri, and | several members of Parliament and other public servants were immigrants from below the border. Canada prefers British immigrants first, then American, then North Euro- | pean. Margarine Preferred To Butter by Danes COPENHAGEN, Denmark.—After de- | veloping their dairy industry to such | a point that Danish butter now is considered the choicest obtainable in | Europe the Danes themselves have taken to eating oleomargarine instead. | The per capita consumption of butter | in Denmark has slumped to only 12 | pounds a year, vhile the margarine consumption has risen to 45 pounds. In other great butter producing coun- tries such as Canada, Australia and New Zealand the per capita consump- tion is, respectively, 29, 30 and 34| pounds per year. Danish margarine factories now produce 174,000,000 | pounds a year or 45 per cent as much as the butter industry produces. The explanation lies in the fact that every Danish cow owner automatically de- livers most of his milk supply to the nearest co-operative dairy, receiving only the skimmed milk in return, which he feeds to his hogs. In order to make his business pay he does not think of retaining enough cream to churn for his own use, and when he wants some- thing to spread on his bread he buys the cheapest thing he can find—oleo- margarine. The oleomargarine indus- try has now developed to such a point that only expert butter tasters can in- variably tell Danish margarine from | Danish butter. Soviet to Manufacture Own Digging Machines | MOSCOW, U. S. S. R—The council of people’s commissars has decided on | the construction of an excavating ma- chine plant, to be completed by Jan- uary 1, 1933, In the middle of last year the U. S. S. R. had scarcelv 100 excavation ma- chines, eight of which had been im- ported after the revolution. During the last quarter of 1930 and the first six months of the current year three times the number of excavating machines were imported as were purchased dur- ing the last two years together, and yet this is far from fulfilling the existing demand The program for the excavator plant anticipates an annual production of 3,000 machines. It is esiimated that the total annual production of all Euro- pean excavator plants does not exceed 500 machines, and even in the United States scarcely 3,000 of these machines are produced annually. ‘The Soviet plant to be built will thus be the largest of its kind in the world. Hawaii Mair‘s R(*adv ‘ To Receive U. S. Fleet HONOLULU, Hawail. —Plans under way in Honolulu for the entertainment of the great Amer- fcan fleet when it comes here next its triennial cruise for The are February on maneuvers in Hawailan waters. | Junior Chamber of Commerce of Hono- | lulu is In charge of some of the plans | for entertainment. It is belng estimated | that at least 2,000 naval officers will | be here and that hundreds of navy wives will come by commercial lines to | meet_their husbands, remaining during the fleet’s stay in these waters. Spe- cial committees on housing and enter- tainment are already at work. Assur- ance has been readily given by hotels | and other purveyors of accommodations | that no raise in rates will be made be- | cause of the fleet’s coming. | financial stronghold. The consequences of each alternative are almost as definite as a formula of logic. Each, depending on which we take, leads to a fixed set of business and political consequences, practically as surely as Spring leads to Summer. We start with one present condition® The price of wheat is about 55 cents a bushel, about half of normal. (I state it thus starkly for the sake of simplic- ity, but the reader will understand I use the price of wheat as a the symbol of the prices of all commodities, in- cluding wages.) The alternatives for the coming year are—either (1) wheat will stay, rough- ly, where it now is, or (2) wheat will rise toward somewhere near normal. ‘Wheat Price Barometer. If wheat should rise to, roughly. nor- mal, the consequences in the world of business will take the form of optimism and prosperity, and the consequences in the world of politics will take the form of a perfectly good chance, or bet- ter than a good chance, of the Repub- licans remaining in power. That the price of wheat should dou- | | ble itself within the coming year, or | before the presidential election on No- vember 8, is completely possible. It has happened before, often. It has happened during the last 10 years and almost happened a second time in the same period. In March, 1924, wheat sold at $1.02 a wushel. Ten months later, in January, 1925, wheat sold at $2.201; a bushel. Cotton Price Shifts Noted. Cotton has doubled in price twice | during the last 10 years. On April 15, 1921, cotton sold at 9.4 cents a pound; 20 months later, on December 15, 1922, cotton sold at 24.2 cents a pound. much more than double. Again, on Decem- ber 1, 1926, cotton sold at 10 cents a pound, and then, only nine months later, on September 15, 1927, at 22.5 cents a_pound. All of which is to say this. and no more: That it is possible for the prices of wheat, cotton and all sorts of com- modities to double within the coming year. And if they do, then we shall have cheerfulness and activity in busi- ness anhd in politics probably success for the party in power, the Republicans. | Rising prices is the one best bet for | the Republicans. # So much for one of the alternatives. But if the price of Wheat does not rise, if it remains, roughly, where it now is throughout the coming year, then we skall have a different set of consequences in business and politics. A different set, not necessarily an op- posite set. It would still be possible for business to improve and it would still be possible for the Republicans to keep their grip on power, though the chances would be against them. Much will depend on how wisely they act. on how wisely the Government as a whole acts, including Cemgress. Grain Held Political Key. So long as the price of wheaj (wheat as a symbol of all commodities) re- mains where it now is, that fact will be the starting point of all our major politics, in Congress and in the presi- dential campaign. It will be very vio- lent politics, something like 1895, re- tiring prohibition to the status of a forgotten quarrel. ‘Wheat at 55 cents a bushel is in itself and as a symbol of all commodi- ties the principal cause, almost the sole cause, of our political and social and of our business troubles. (I protect my- self against some economists who may read this article by saying I know per- fectly well the price of wheat may be | partially not a cause but an effect of business depression. In this field. cause and effect are so intricately mingled it i§ impossible to separate them. In any event I am writing at the moment for the lay reader and making some sacrifice of meticulousness for the sake of simplicity.) Here is how the price of wheat works: A farmer two or three or four years ago borrowed $5,000 on mortgage—that is, he borrowed, as of that time, 5,000 bushels of wheat. prices he owes 10,000 bushels of wheat. He can't pay it. It can't be done. Tre cutting in two of the price of wheat | has doubled the burden of all debts. It is so, not onlv as to the farmer and his mortgage. It is so in the case of Germany and reparations. It is so in the case of the debts France and Brit- | ain owe us. Debts contracted when wheat was $1 a bushel cannot be paid when wheat is 50 cents (except under special conditions and all with extreme difficultv—with, indeed, actual injus- tice). The farmer has only his wheat to pay with, and with wheat at 55 cents a bushel he has not enough. The num- ber of farmers who are in default on But today at present | their mortgages is pretty appalling; some figures given out last week by the Federal Farm Loan Board were | pretty somber. | Prom this starts the demand for re- lief through acts of Congress or other political action. The aim of most of the attempts is, stated broadly, to make it easier for the farmer to get hold of dollars, by increasing the number of dollars in the country, or otherwise | Can tke Government, properly, make dollars easier to get? The answer is, within limits, yes. The Government | can, legitimately and by perfectly sound | action, increase the number of dollars in the country, making them, therefore, easier to get. Unfortunately, many of the attempts go at it the wrong way. Let us list the attempts already made in Congress- or certain to:be made. | These efforts to increase the number | of dollars in the country will compose the major politics of this Congress. The first ~nd most obvious attempt to | relieve the farmer is by enacting that his debt of $5,000 be arbitrarily cut to $3,000, or that his interest rate of 6 per cent be arbitrarily cut to 3 per cent, |or that the due date of his mortgage | in 1932 be extended a year to 1933. This has already been attempted by Senator Nye of North Dakota, who, in an amendment to another measure, pro- posed that every farmer be given a year's postponement of his debt. That cannot be done—that is, it cannot be done by law. It can be done by volun- tary, private understanding, and a good | many of us think that creditors ought to practice just this sort of leniency toward their debtors. Many creditors | are_doing so. But it cannot be done | by law, because the courts almost cer- | tainly ‘would regard it as “impairing | the obligation of contracts. Move for Cheap Money. Most of the methods proposed for re- | lief of debtors take the form of creating a greater quantity of money, so that each debtor will have a better chance to get some of it—“cheap money” was the phrase used in similar political contro- | versies arising eut of the same condi- | tions in the 1870s, '80s and '90s. One way proposed is that the Govern- ment shall buy large quantities of silver bullion and coin it into silver dollars, coupled with a decree that a silver dollar shall always be the equivalent of a gold dollar. That was William Jennings Bryan's plan in the 1890s. It is now earnestly revived and commands increasing support. It will fail because it cannot command a majority in Con- gress. Something can be done about silver, perhaps, tc enlarge the world's stock of currency, but it cannot, or certainly will not, be done by the United | States alone. It may, however, be done | by international action. | “ome way to produce more currency is through the Federal Reserve System | The system is actually a creator of cur- | rency. The system gives out dollar bills, | brand-new ones, in exchange for cer- | tain kinds of business paper, commercial obligations having certain safeguards. | There are strict limitations on the kinds of commercial paper for which the Fed- eral Reserve System will hand out cur- rency. One way to increase the quantity of currency would be to enlarge the classes of commercial obligations for which the Federal Reserve System will give out new dollar bills. For exaniple, as the law now stands, the Federal Reserve System will not give out cur- rency in exchange for a mortgage on & farm. Whenever it is proposed—as it surely will be—to enlarge the kinds of security for which the Federal Reserve will give out currency—when that hap- pens there will be controversy in Con- gress. Senator Carter Glass of Virs ginia will be on guard. There is not space here to say more, except that | there can be some legitimate enlarge- | ment of the quantity of currency in the country through use of the Federal Reserve System’s function of creating currency. That the country would be benefited by a prudent, carefully guard- ed increase of currency can hardly be | doubted. Bond Issue Seen Remedy. Another way, indirectly but fairly certain, to increase the quantity of money is by great issues of Government bonds for public works. This is pro- posed by Progressive Senator La Fol- | lette (five and a half billions) and by | Democratic Senat:r Wagner of New York (two billions). About this, like- | wise, there will be much controversy in Congress. There is not space for more, except | to say that the politics having to do | with money and currency and arising | out of the low price of wheat (assum- ing commodities continue low priced) will be the real politics of the year 1932. Compared to this, compared to the poli- | tics which will revolve around the low ]price of wheat, compared to the issues which will be called “cheap money” or | “relief of debtors” or “free silver'— | compared to that, all the politics of personalities, about Smith opposing Roosevelt, or Curtis getting the Repub= lican vice presidential nomination or | Baker getting the Democratic presiden- tial nomination, or Raskob and pro- hibition—all that is merely the small change of politics, the village gosslp about personalities of politics. Meantime and all times let those tempted to bet on the 1932 election remember that it is no impossibility, not even a novelty, for cotton and corn and wheat and other commodities to double in price within the space of & year. | | Why France Is Now Wealihy __ (Continued From Pirst Page.) just as prosperous as the savings banks of provinces untouched by war and invasion. Many Small Fortunes. The result is a multiplicity of small fortunes. And as a result of the mul- tiplicity of small fortunes we have a multiplicity of small ownership. Of the 8,600,000 French farmers, a large per cent own their own farms. Of the 12,000,000 industrial workers, about 1,000,000 are their own bosses. But the most_striking {llustration is given by the Bank of France, which is France's At the meeting of the bank's sharcholders on Decem- ber 31, 1930, rot less than 31,458 share- holders ‘were present or represented, and these 31,458 shareholders could be d, according to an official record, of 1 share. of 2 shares of 3 to 5 shares.... of 6 to 10 shares of 11 to 20 shares.. i of 21 to 30 shares. of 31 to 50 shares. of 50 to 100 shares.... of more than 100 sh'r's 1 Owners Owners Owners Owners Owners Owners Owners Owners 1, b5 6, 3, 1 7 1 0! 9 3 0t 370 226 133 31,458 This means that the number of own- ers of one share amounted to 35 per cent of the whole, the number of owners of one or two shares amounted to 58 per cent and the number of owners of one to five shares exceeded 80 per cent —that is to say, they constituted four- fifths of the army occupying the big- gest financial fortress of the country. Inheritances Analyzed. Another curious and striking exam- ple is given by the records of inheri- tances. In 1929, 390,821 persons leav- ing “estates died in France, and the estates they left were valued at a total |of '10,398,000,000 francs (about $415,- 1000,000). Of these 390,821 persons, {about two-thirds—exactly 260,136 indi- | viduals—left only 10,000 francs, or $400 |each. And 115,399 left estates ranging |from $400 to $4,000. There were only | 875 persons having fortunes of more | than $40,000, and only two millionaires | —two American millionaires — leaving | more than $2,000,000. | . What better proof could there be of the extreme division of wealth in France? To 875 rich people—admit- | ting that people having a capital of $40,000 to $1,000,000 are rich—there are 390,000 small owners. That is what | constitutes _the wonderful balance of | France. That is what makes her | strength and her wealth. One often | speaks of the silver wall of a countr: | The silver wall of France is made of | whole lot of small bricks, which have | been added gradually to one another, | after much labor, patience and time. | | Textile Situation Typical And to that silver wall every one , | brings his stone without hurrying. Re- | cently I heard one of the principal tex- | tile manufacturers of Paris say: “Of course, the times are hard. But ‘I cannot complain, For six months I | have been dealing only with the re- | matching of my fabrics. And I make | money in doing so!” | _ “Dealing with rematching”—that is | France.. Some others should have dealt more with rematching instead of always * starting something new and costly. Re- matching—that is the work of an ant. But a time comes when one regrets not being an ant. And the time seems to have come. Many people who were looking with contempt at the French | ant are now making gracious signs to her. Many people are courting her and calling to her. The French ant will not reply as in the tale: “You were singing, were you not? Well, you may dance now.” But will say: “Try to sing a lit- tle less another time. ‘Work a little more. And if you are confident, do not be too confident in the saving of others.” . .