Evening Star Newspaper, March 12, 1933, Page 21

Editorial Pa{ge Part 2—6 Pages MORTGAGE “GOLD CLAUSE” HINGES UPON U. S. COURTS British Decision Indicates Creditors Demand Payment on Basis of Previous Values. BY MARK SULLIVAN. HE writer of this article has hap- pened, through the depression, to be in a position where he saw events developing from the inside. It has been an experi- ence productive of many forms of in- terest, provocative of many reflections. Among these one of the most frequent has been to observe how some compara- tively unnnoticed incident, often re- mote, can have consequences flowing out in larger and larger circles until every inhabitant of every village in America, ;ve'ray farmer on every farm, felt the ef- ects. One of the present conditions, so far almost completely unnoticed. but des- tined shortly to be mueh talked about, is a thing called the “gold clause.” It is with the “gold clause” that the pres- ent article deals. And what is said here will have, I am sure, fascinating inter- est—if not now, surely in =2 little while—for every lawyer and banker. And if I can succeed in making it clear enough, it may have interest for the average reader who, sooner or later, is going to be affected in his fortunes by what is done or not done about the “gold clause.” I think it likely that substantially every reader of this article either owes or has due to him a debt ‘which is affected by the “gold clause.” Is United States Off Gold Standard? ‘The question which occupied prac- tically every important mind in the country during the past week—and ' which vitally affected every mind, ‘Whether important or not, and every person, from the lowest to the highest, the poorest to the richest—was: Is the United States off or going off the pres- ¢n’tm gold )s‘undnrd? roughout this depression it has been almost universally assumed that for a rticular reason America would not— us say, almost could not—go off the gold standard; that there was in Amer- ica a condition which made departure from the gold standard so inexpedient as to be practically impossible. Great Britain might go off the gold standard, as it did on September 20, 1931, but in America there was a condition which made imitation by us of Britain's ex- ample so difficult as to be impossible. France might reduce the gold content of its currency, but America, for a partic- reason, could not or must not. The reason, the insuperable condition, ‘was the presence in billions of Ameri- can mo_rtguas and bonds of the “gold clause.” And to understand something vital that is just ahead of us, it is de- sirable to recite briefly the history of the “gold clause” in Amerjcan bonds and mortgages. y Bryan Policy Is Revealed. ‘There was in the United States in- termittently, indeed almost steadily, from after the Civil War until 1896, the same Question, the same commotion, that is now bedeviling us. It was a de- mand for “inflation,! a demand that peper dollars (to an indefinite number) ‘made arbitrarily equal to a gold dol- lar; or that silver dollars of a certain ‘weight be made arbitrarily equal to a gold dollar. The demand came to a head in the presidential campaign of 1896, when Willlam Jennings Bryan made the Democratic fight upon an issue which said, In effect, that 16 ounces of silver should be made by law exactly equal to one ounce of gold; or to put it in terms of money, that a gold dollar should be made equal in value to a silver dollar of 16 times the gold dollar’s weight. This 30 years of agitation for in- flation created, as agitation about in- flation always does, a fear that the paper dollar might become less in value than the gold dollar; that, indeed, the paper _dollar, if inflation should go far enough, might become worth only & few cents in gold or practically nothing. (As the German mark did in 1924.) To forestall that possibility lawyers drawing up mortgages during the 1870s, 80s and 90s fell into the way of writing into mortgages a “gold clause.” The com- mon form was that the mortgagor, the debtor, promises to pay $1,000 (or what- ever else might be the sum) in gold dol- lars of the present standard of weight and fineness.” The insertion of this gold clause in all sorts of mortgages, bonds and other instrumentalities of debt, was prac- tically universal up to 1896. Many of these old mortgages and bond contracts, written preceding 1896, still exist, es- pecially in the case of railroads. But the writing of the gold clause into mortgages and bonds did not cease in 1896. Lawyers, in many of their mental operations, are an apelike folk. A lawyer subsequent to 1896—indeed as late as 1930—called upon to write a mortgage or a bond, looked up the language of an existing mortgage or bond, and faithfully copled it word for word. ‘Through this tradition and recedent the writing of the gold clause to mortgages and all contracts of debt became a habit, a routine. Thirty years or more after the fight on the gold standard, after Bryan was dead, after the old fights for inflation through greenbackism” and “free silver” had been forgotten, after the United States was supposed to be as securely on the gold basis as English is the common tongue —after all that time, young lawyers who had not even been born when Bryan demanded free _silver, lawyers in little county seats in Kansas and Iowa, and even more the big lawyers | ‘of New York and Chicago, continued to | write into mortgages and other con- tracts of debt the old formula that “this contract shall be payable in gold dol- lars of the present standard of weight and fineness.” Creditors Can Demand Gold. The result is that there are literally billions of dollars, probably hundreds of billions, of such mortgages and bonds in existence. The exception, in- deed, 1s to find & bond or mortgage or other contract of debt which does not contain the gold clause. Any reader of this article can entertain himself for a fow minutes by reading carefuly the lenguage of any bond he happens to own, or any mortgage he happens to, owe. Probably not one person in a thousand has ev{ermr:nd‘ the wn:plte‘x verbiage o nstrument he legal ge s y. If he will read it now he will find, in 999 cases out of 1,000, that the bond or mortgage says “gold dollars of the present standard of weight and fineness.” Now & gold dollar “of the present standdrd of weight” contains 23.22 grains of gold. That has been the standard since before the Civil War. And the gold clause in those billions of dollars of bonds and mortgages is supposed to guarantee, beyond the possibility of a doubt, that the creditor, the owner of a $1,000 bond, for example, can, if he chooses, demand and insist :;\"w:flvm' $1,000 each containing It is the presence of this gold clausc in billions of American contracts that has been supposed to make it impossi- ble for the United States to go off the gold standard. The gold clause | does not exist, or at least is not habit the morigages and debt con- | | regime’s campaign for more babies. \amduphtwmmmwmonl , in tracts in other countries. Consequently the gold basis and for the French to say their franc should contain less gold than it formerly had. But, as it has been almost uni- versally argued, the United States could not go off the gold standard, nor say that the gold ar in the future shall contain, for example, only 15 grains, because the existence of these billions of dollars of old debt contracts would create too much , become too intolerable a hardship on persons and [ to their debts orporations obliged In the old and heavier dollar, Question Up to Supreme Court. ‘Throughout all the discussion ran, £ course, the question which may be tated thus: If the United States .hould go off the gold basis, or if the Jnited States should decree that the gold dollar shall contain a smaller amount of gold—in that event what would the courts do about the con- tracts to pay in old gold doliars, gold dollars of the old standard? To_ ask what “the "courts” would do about these old contracts is, in effect, to ask what the su‘freme Court of the United States would do, for everybody knows that the Supreme Court would have the final say. In the inner discussions that arose in several crises in this depression, on the two or three occasions when the government was obliged to give con- sideration at least to the possibility of going off the gold standard or being forced off it, always thought was given to this question: What would the courts do about these old contracts of debt containing the old clause for pay- ment in existing gold dollars? The time preceding the present when we came nearest to going off the gold standard was in early February, 1932. At that time, though the country never knew it, and though we pulled out of the crisis, we were within a few weeks of being obliged to go off the gold standard. On that occasion, when it was necessary to consider whether we might later go off the gold standard, Mr. Hoover, with his habitual care to provide for future possibilities, alked one of his legal assistants to give him an opinion—which, of course, could only be a surmise—as to what the courts might do about the old “gold clause” contracts in the event that America should go off the gold stand- ard. The opinion, of course, could be only a guess. The courts have never had occasion to decide the question, and what the courts might do if and when the question should arise was a question as to which the best of law- yers could only make a guess. ‘We are apparently s little nearer to- day to the same question. What the courts would do about these billions in existing mortgages, bonds and other debt contracts is at this moment a pretty practical question. The answar, of course, Ji~ow as before, can be oniy a surmise, but there has been a récent event which throws greater light on what the courts might do than any have had before. . British Court Answered Question. ‘The gold clause is, I have said, al- most solely an American institution. In other countries it exists hardly at all, but it turns out that there was at least one such contract in Great Brit- ain, and that the British courts were obliged to answer precisely the question which our own courts will be obliged to answer if we should go off the gold basis or if we should reduce the quan- tity of gold in the standard dollar. The chencery division of the British High Court answered the question a few weeks ago, and their answer throws light on what our own courts might do —light which, incidentally, will be acutely discomforting to creditors who have been thinking that they have an absolute and impregnable right to de- mand “gold dollars of the present standard of weight and fineness.” In Great Britain in 1928 a certain corporation borrowed money and into the contract for repayment wrote a clause saying that the sum was “pay- able in gold coin of the United King- dom or equal to the standard of weight ;.;nzd’ .flnenesu existing September 1, ‘Three years later Great Britain went off the gold standard, and the British nd, formerly worth $4.86 in gold, ime worth some $3.20. Still later. a few weeks ago, the debt mentioned be- came due and the creditor demanded | payment according to the language of | his contract, in the old gold pounds. The debtor tendered ordinary pape! pounds. The creditor haughtily re- fused them. insisting on having his gold, and went into court to get it. Not a Bullion Contract. What the British courts did to that gold clause is what Jack Dempsey did to Jess Willard. They knocked it out firmly, fatally and finally. This was “not & bullion contract” said the court; that is, it was not a contract having to do with mining and calling for gold bullion as some contract might call for land or coffee or cotton. Not at all, said the court. “The contract is a simple contract $o secure payment of a sum of money, and if the defendants (the debtor) tendered the sum of money in question in whatever might happen to be legal tender at the date the pay- ment was due, they have discharged their obligation. * * * To attempt to impose upon the debtor an obligation to pay in a particular form and not any- thing which is legal tender is an at- tempt to do something which cannot be cnforced if the contract is a mere con- tract for payment of money.” That decision has a most im nt bearing on what is apparently about to arise in the United States if we go off the existing gold standard. Decisions of British courts are, of course, not binding on Americen courts. But no one can read that British decision in full without coming pretty firmly to the conviction that the American courts wo,;x;ld take the ux’zme position. e hardly inescapable inference is that any American owing a m or a bond or a debt on a contract con- taining the gold clause, will be able to pay his debt in whatever is legal tender at the time the debt comes due, paper dollars, silver dollars, or any other form, provided it is legal tender. As respects creditors the deduction is that any one who fondly believes he can deman 23.22 grains of literal gold for each dol- lar due him may be as disillusioned as Shylock was on a similar occasion. In short, the “gold clause” seems like- ly to go the same path as a good many other k:filet‘ut\%:x hitherto considered impr ese are vam o tough times for " (Copyrisht, 1933 | $50 Furniture Pr;es For Italian Marriages ROME.—Thirty prizes, each one con- sisting of $50 worth of furniture, will be awarded by the Fescist federal secre- | tary of Vicenza to 30 blackshirts in his bailiwick who get married this year. The s , Dr. Dolfin, explains that this is his effort to further the (Copyright, 1§33.) EDITORIAL SECTION ' - The Sunday Star, WASHINGTON, D. C., SUNDAY MORNING, MARCH 12, 1933. Can Embargoes Halt Japan? Various Countries in Move to Test Means of Arresting Oriental Struggle. BY JOSEPH P. CHAMBERLAIN. Professor of Public Law at Columbis University. Japanese delegation has quif the Assembly of the League of | Nations, Japan has given notice of intention to withdraw from the League and has refused to| accede to the League's plan for settle- ment with China on the lincs laid down in the Lytton report. A large Japanese army aided by a Manchu- kuon force has invaded' Jehol, where & Chinese army, larger in numbers, is preparing to defend that mountainous | province. Jehol in the hands of the| Japanese would be looked upon by the' British. constant threat to Pe?mnaIMh China and Japan, ¢t | been a movement in different countries | foreij in favor of passing from persuasion to action in arresting the struggle in the | tion: Orient by declaring an embargo either limited to munitions of war or even ex- | tending to the general embargo which | Article XVI of the League of Nations | authorizes the members of the League to put into eflect against a nation which resorts “to war in disregard of | its covenants.” The British government has acted by imposing an embargo on export Of -made arms and munitions to of the armies or by ve can be dol al agreement, that no action can be taken against Japan alone except by international agreement. President Hoover requested Congress to authorize the Executive to | 1ay an arms embargo after consultation with other powers, but vigorous ob- raised in both Congress. An embargo on munitions may have an effect on the action now going on, by reducing the effectiveness moral pressure on «Drawn for The Sundsy Star by J. Scott Willlams. pending ne- | the e and governments. Of quite gotiations for international action. “It|another nature is the general ban on In the face of these events there has | is plain,” said Sir John Siman, British | trade under Article XVI, which has not minister, . “that nothing ef- | seriously been discussed so far, except by interna- | which always remains as a possible and he declared | sanction. What would be the military effect of | an embargo on arms and munitions of | war, either against both China and Japan or against Japan alone? Muni- tions of war should be taken in its wider meaning as including the products obviously essential to warfare, such as auto trucks, airplanes, even for civilian flying, and those parts of arms out of which munitions of war could be easily | (Continued on Fourth Page.) Man Behind the Building Job Maj. Ferry K. Heath Has Engraved His Fame in Stone. ITH his name carved on the corner stones of many of Washington's newest and most monumental buildings, Maj. K. Heath, As- sistant Secretary of the Treasury, leaves behind him as he departs from the| scene here a lasting tribute to his pub- lic_service to the Nation’s Capital. The majestic groups of public struc- tures which have reared their imposing facades into the “new Wi gton’ mark the high point of s widespread development such as the Nation's Cap- ital has not seen since the days of George Washington. N President Hoover as the Chief Execu- tive of the Nation during prosecution of the Government's huge pro- gram throughout the Nation is destined, in the eyes of contemporary historians. to go down in history as the great bullder. Upon the shoulders of Maj. Heath, his “lieutenant,” as Assistant Secretary of the Treasury under Sec- retary Mellon and Secretary Mills, has fallen the tremendous burden of ad- ministration for this building program. The manner in which this program was executed during the last four years and the results which have been achieved already have reflected great credit upon the man principally in charge. Tribute of Associates. ‘What type of man is this who has served the Capital so well and is now deflaflms. due to the exigencies of politics, to make way n:u successor, looks for great things? Perhaps there has been no more sin- cere answer to this question than in a handsome, leather-bound volume which recently was presented to the retiring zmm = it sercuhry by his umcm "l&w 1'{1‘ office of superv] Ar 3 the front of this t‘:l:flmnhl volume, which is full of interesting sketches. ictures of outstanding bul and umorous touches by way of cartoors, there is carefully inscribed in white of no mean ability these words: “The followers and assoclates of Maj. Heath who have during the last four years served under him bid him fare- well with a grateful appreciation of his mm‘ fairniess, his decision, his d to his work and his power of accomplishment. The wish is that whatever his future flelds of en- deaver Le will have in them the same success he has achieved &s Assistant Secretary of the Treasury.” Iry. ‘The testimonial volume itself further scope of ings completed or now jer contract, at_a total limit of cost/of $428,587,679. ‘With this enormous _expenditure, however, the administration of such & huge program has been carried on here 3 = MAs. FERRY K. HEATH, RETIRING ASSISTANT SECRETARY OF THE TREASURY (RIGHT) SHOWN WITH HIS ASSISTANT, L. C. MARTIN, OKI ONE OF THE NEW PUBLIC BUILDING PROJECTS IN ATIONAL CAPITAL. with very little overhead at national here, comparativel; —Star Staft Photo. who have “buckled ‘more than might " and expected of such & relatively | istration under tect, headed by Acting Ar- chitect Jlmfl‘, ‘Wetmore, has had be- 800 900 personvel during big office on the south side of the Treasury facing the Washington Monu- ment. From windows in his office the glant shaft of this monolith soaring to the skies has been an inspiration in this rebuilding of the Nation's Capital. The high pressure on Maj. Heath was recently attested to by a railroad execu- tive of large ability and long experi- ence. On emerging from the Assistant Secretary’s office one day, when busi- ness was pouring in from all directions, both inside and outside the Govern- ment, this executive remarked to a friend that Heath occupied the “hottest spot I have ever seen.” In that office the telephone keeps up a constant ringing from early morning, often until late at night. The outer office and waiting room is filled most of the day with delegations from one part of the country or another waiting to take up some problem relating either to the selection of site, architecture, or develofi:x:nt of the public building in their lity. Many a time the “mid- night oil” has been burned not only by Maj. Heath, but by his immediate as- tes to catch up with work, after the pressure of conferences, delegations and telephone calls has diminished. Program Non-Partisan. The public buil program upon which this Nation embarked was n%.;:- partisan in character. Both Republic- ans and Demoacrats united for its ex- pansion in the belief that public bulld- the depression would , public work . The result was such as has never been approached in the his- tory of this or any other country. The speed of execution, of purchase of sites, the architectural fitness to each com- munity, general type of work and beauty of the result has marked the whole building program, ‘Washington, but throughout Here mfl theotfl:l::og’lfl Capital crowning glory uilding program htobeleen)unnowmcmngmlml- Yas tinder Maj, Heatn i the Treasury WAS Ul . Heal Department, majestic other develop- ments, such as the Arlington Memorial Bridge, the group of new structures on m’o} l'lfll, the m Plaza ='.nd features are a new Na- tional Capital. Hailing from Michigan, Maj. Heath had wide experience in business in military service, having par- ticipated in both the Spanish-American and the World War. He was a major in the American but !since it is only a promise to pay in the | House, and a member of Hoover's fa- Special Articles MISCONCEPTION OF DEBTS DRAWBACK TO ADJUSTMENT Idea That Europev Got Money From Us and Should Return It Held to Require Study Showing Account “Dead.” BY FRANK H. SIMONDS. l FEW days ago I received a let- ter from which I quote the fol- lowing extracts: “Recently I read in the neiis- papers that you had testified before the Senate Pinance Committee that the war debts were ‘dead,’ that we should never be paid what was owed us and in addition there was no hofi of getting anything in the way of tari or arms reduction even if we did cancel or reduce the bill. I cannot believe | any such thing can be true and I am writing to ask you to answer the fol- lowing questions: “1. Isn't it true that Europe got cur | money and ought to pay? , “2. Doesn't cancellation or reductipn mean shifting the burden to the Amer- | ican taxpayer? “3. Can't Europe pay if it wants to? “4. Aren't the debtor nations spend- | ing hundreds of millions for armaments which they could employ to pay off | their debts? | “5. It they won't pay, can't they at at least lower their tariffs on American in return for debt revision? “6. In the same way can’t they re-| duce their armaments if we seduce their | debts? “7. If they won't pay their debts, lower their tariffs or reduce their armaments, why isn't the answer ‘Buy | American’ and refuse to take their goods? “8. Isn't the real trouble that you and those who talk as you do are the vi¢- | tims of clever European propagands, | and isn't it about time you stopped tal ing Europe and began to talk America Misconceiving the Realities. In the present article I am going %o | to answer these questions because | they seem to me a very fair statement of the way the debt question strikes the minds of a large fraction of the Amer- | ican people. All of the questions seem to me to rest upon complete misconcep- | tions of the realities of the debt prob- | lem. And until these misconceptions | are removed it is plain no progress can | be made toward debt settlement, for | political action in this case will ¥ outrun popular opinion. As to the question of whether Europe paid in goods, and the goods it gets in this way will not furnish the debtors with American money to buy American goods. We shall take as many goods as before, but rt of what Europe sends us will be for debts and part only In regular trade. Thus European na- tions will have to reduce their Amer- ican purchases by the amount of money value represented in the goods they “"}gh for }?:lbt payments. e whole thing is very complicated to the ordinary citizen, but it -ggounu |to a simple statement that America can only consume a certain amount of foreign goods and Europe can only take from America as much as it can pay for in its own goods. If Europe starts to pay its debts in goods—the only method possible—America won't take more goods, but Europe will get paid for less, and as a consequence will buy less. Thus we shall get debt payment, but only at the cost of our ordinary trade. The taxpayer will benefit, but the manu- facturer and farmer will suffer because thei: foreign sales will go down. Reduction of tariffs will not help the matter because if the debtor nations lower their own tariffs and thus open the way for a greater influx of Ameri- can goods, they will have no new wa of paying for these goods. They wlfi not as a consequence sell more abroad, and they will not get possession of more American money. All the trade we gain this way we shall have to finance by loans to the purchasers, thus again increasing the obligations of Europe to us. For Europe to scrap armaments to | balance our debt reductions would not | be economically advantageous to the United States because it would en- able the nations which reduced their armaments to lower their costs of production and thus to compete to better advantage with us on the world market. This would be the case be- cause to reduce armaments would b2 to cut military expenses, and this in turn would lower budget charges and thus lessen the burden of domestic taxation. But American tax burdens would not be affected by French mili- tary reductions because we should not hardly | have any reason for making a similar reduction in our military costs, which are now at about the lowest possible got our money and therefore ought to | limit. pay, it is plain that Europe ought to | pay for what it got, but that it never received any considerable amount of our | money. The origin of the war debts was the dispatch to Europe in the war and immediate post-war period of vast amounts of wheat and cotton, copper and steel, munitions and supplies. Without these things our European as- sociates could not have continued m‘ carry on the war. The debt is thus a good debt representing value actually received and desperately needed. As far as money is concerned, however, that only entered into the question #s | the United States raised it from the American taxpayers and investors by drastic tax laws and by Liberty loan “drives.” But having thus raised it, they at once turned it over to the manu- facturers, farmers and miners, who were furnishing the allied countries with the materials which they asked for so urgently. In other words, the | United States took money from one group of its citizens and distributed it among another. At the same time, it sent goods to the European countries and took their notes for these commodi- ties measured in money values. But from first to last American money, with slight exceptions, stayed home. Shift of the Burden. As to the second question, it is ex- actly true that what Europe does not pay, America will have to, because if the debts were all canceled, the Liberty bonds which the United States sold to raise money to pay its citizens for the supplies they furnished European na- tions would still remain to be liqui- dated. ‘When, however, one comes to the in- quiry as to whether Europe could pay If it wanted to. one touches the very heart of the debt question. In fact, 50 long as the United States is not willing to be paid, it doesn't make the smallest difference whether Europe is willing or not. And so far the United States, while demanding payment, has been unwilling to accept that payment in the only way it can be made. The catch in the matter of payments is that they can only be made in goods | and services. Europe did not in the | first instance get our money, but our goods. It cannot therefore pay us back save by its goods or by carrying our | goods and citizens on its ships. Money | does not count, for national money is not good beyond national frontiers, gold. And gold cannot be transferred in large amounts because it is needed to sustain domestic currencies. But if debt payments have to pe taken in foreign goods, then the effect is either to reduce the volume of goods the United States sells abroad or in- crease the foreign commodities it buys. For in international trade no countity can sell abroad more than it is willing to buy and lend. Conversely, no coun- try can pay abroad more than it can sell or borrow. The reason is that in- ternational trade is no more than a vast swapping operation. We exchange copper, wheat, machinery and goods for tin, rubber, coffee, spices and certain goods which other nations make bet- ter. But at the end of the operation each country must sell as much as it buys. Otherwise the nation buying more than it sold would have to exhawst its gold suppl;’, and in the end have to abandon the gold standard. On the other hand, the country selling more than it bought would have to go on lending to bridge the difference where gold was not forthcoming, and that would amount to making a new debt for an old. But if a country can only sell as much abroad as it buys in normal trade relations, when it undertakes to collect a foreign debt it will still have to be became assistant treasurer of the Re- publican National Committee. ‘ashington during his four years service to the Nation Maj. Heath has become an exceedingly popular figure in official and social circles. He was a frequent visitor at the White mous medicine ball cabinet. Associates of Maj. Heath say that many a caller who went in to his office with a grim and dour face came out. smiling. It is said of him that he knows how to deny requests in a manner to bring disappointment but a smile. ‘Those who failed to get what they wanted were given to understand that he pot only endeavored to grant re- quests when possible, but to protect the interests of the Government and the people of the United States, the tax- payers who pay the bills. And with it all, those who know the retiring Assistant Secretary will not (m his unfailing sense of humor, wi breaks out even when he is under In the amml% f Perry K. Heath of 3 ‘Washington is losing a fricnd, who has left his monumental mark here, who will long be gratefully remembered. ~ { Limitations of “Buy American.” As for “Buying American,” the trou- ble with this is that Europe can only buy our goods to the extent we buy hers and every time we substitute a domestic for a foreign article, we re- duce the amount of European purchas- ing power in the United States. “Buy American” is not one-sided in its effect, for automatically as our pur- chases from Europe decline, Europe’s buying from us goes down. Since Europe buys more of us than we do of her, she has a bigger chance to reduce her debt. Since the debtor nations which we denounce as dishonest are also our best customers, eveyy time we denounce a defaulter we insult a pay- ing customer whose trade was never more necessary to domesti¢ employ- ment. Last of all T come to the question of European propaganda. ~But how can the European aspect of the ques- tion make any difference so long as the United States won’t consent to take debt payments as they can be made? It doesn't make much difference whether Europe is eager to pay or busily conspiring to get out of payin; so long as the United States won’ consent to adjust its own affairs so we can be paid. But ever since the World War our aim has not been to take more Euro- pean goods, but to sell Europe more of ours and take less of theirs. As a con- sequence, to pay the debts, after the settlements were made, Europe had to borrow privately in America to pay publicly to the Treasury. When Ameri- can investors awgped. lending, Europe stopped paying. But in the meantime, whereas it owed the United States Government upwards of $12,000,000,000 war debts at the start, today it still owes something like $12,000,000,000 in war debts and half as much more in private debts into the bargain. Believe Debts Are “Dead.” ‘The debts are dead, then, because the United States has always been unwill- ing to limit its exports or reduce its tariffs h’cl!s\lch fashion l;ot:dlpe!'n:ilt debt ents in European and serv- ch:li’?‘md today it is far more inter- ested in keeping up its foreign trade, which would maintain current employ- ment, than it is in collecting old debts at the cost of lowering exports and employment. Calvin Coolidge gave definitive ex- pression to one of the two great de- lusions about the war debts when he said “They hired the money, didn't they?” Senator Reed of Pennsylvania voiced the other with 1 adequacy when he used the words my corre- spondent quoted: “They could pay if they wanted to.” But fact Europe didn’t get our money, but our goods. Their ability to pay us back in those or other goods cannot be questioned. But the matter of whether they are willing to pay or not cannot come up until the fact has been established that we have opened the way for their goods and they have refused to furnish them. (Copyright, McClure Newspaper Syndicate.) Digestion of Ostrich Is No Need for Envy LONDON.—Gourmands and dyspep- tics in this part of the world who envy the digestion of an ostrich have just received the disturbing warning that ostriches themselves have been suffer- ing severely through the fallacious be- lief that they can eat anything. ‘A number of ostriches in the London Zoo have died as a consequence of rash confidence. One of these succumbed after swallowing the equivalent of 18 cents in coppers. Another one “shuffied off” after a generous é’:bm had pro- vided it with two handkerchiefs, three gloves, a camera film spool, three feet of string, a long pencil, a comb, a bi- cycle tire valve, a clock key, a glove fastener, a plece of wood, part of a rolled gold necklace, two collar but- tons, a penny, four halfpennies and & Belgian franc piece. (Copyright, 1933.) Build Botanical Garden In Hawaiian Army Camp HONOLULU, Hawail. —Devels it of a large botanical garden of beauty in the midst of a mili camp is a project now under way the Hawalian department of the Army. The camp is the big recreation area in the Hawall National Park, near the famous “tame crater” of Kilauea Volcano. ’ ‘The result will be a unique botanical ‘»moh"""""“é"" Sou sctually” warmed - -nd on