Evening Star Newspaper, December 2, 1934, Page 37

Editorial Page Part 2—S8 Pages BORAH SCORES EUROPE » FOR REPUDIATING DEBTS Hints Attitude Assumed and Resulting Burden on U. S for Special Note—On the eve of the next due date, December 15, for payment of war debt installments owed the United States, Senator Borah, rank- ing minority member of the Senate Foreign Relations Committee, dis- cusses here the efforts of European nations to repudiate the debts and the probable consequences of their action, BY WILLIAM E. BORAH, United States Senator From Idaho, HE premier of Great Britain, in a recent public statement, de- clared in effect that the ques- tion of international debts no | longer obtained and that “the international debts were dead.” He | left no doubt that he regarded the | debt problem as solved and settled | and out of the way. This can mean nothing less than that Great Britain does not propose to pay the debt due from her; in other words, that it is her purpose to repudiate the debt and, along with her, the other debtors are to do the same, with one or two possible ex- ceptions. This statement comes from the gov- ernment of Great Britain. The United States has not canceled the debts. ‘The United States has not, I assume, proposed to cancel the debts. The debts have not been paid. So we have staring us in the fact the bald, naked announcement that the debtors Ppropose to repudiate their debts. As a matter of fact, these debts cannot be canceled. Some one must pay them. Either the debtors must pay them or the American taxpayers must pay them. The only question is, as it has been from the beginning, shall those who contracted to pay these debts pay them or shall the taxpayers of the United States pay them? If the debtors do not pay, our taxpayers must pay. Taxpayers Must Pay. 8o we have another bald proposi- tion, and that is that the debtors have determined that the American taxpayers must pay the debts of the debtors. Rather a strange proposition, but it seems to be an approaching fact. On December 15 the debtor nations will owe, and the same will be due, $630,122,345.35. This involves the amount coming due December 15 and the amounts in default hitherto. | Tsese amounts, with all other sums | yet to become due, are to be repudi- ated, according to the clear inference to be drawn from the British pre- mier's statement. Press dispatches carry the news from Paris that France takes the same positien.» . In plain language ‘the statement]OTest"Britatn;*194 per cent; of Italy, coming from London recently is re- stated from Paris, to wit, the “inter- national debts are dead.” Thus the declaration has gone forward from the two leading nations that the debt problem has been settled so far as they are ccncerned, not by consent of the creditor nation, not through adjustment or legal action, but through a determination not to pay. | It is interesting to note, also, that | in the same dispatch it was stated | that the largest peace-time budget for war purposes, about $475,000,000, | in the history of France was passed practically by acclamation. Formal Notes Anticipated. It is said that brief formal notes will be or have been dispatched to the | respective governments advising them | of the amounts due. It would seem | that these brief formal notes have | been anticipated and due notice given in advance as to what the answer is to be. The attitude of our Gov- | ernment under the circumstances will | determine whether the pronounce- ment of the debtor nations is to con- | stitute the final disposition of these debts or whether they are to be paid. In the light of the British premier’s statement and in view of what has taken place when other sums fell due, if the position of our Government is less than positive and insistent that not only is the debt issue alive, but payment is expected. we may as well consider the premier’s statement as final and the American taxpayers may as well prepare to pay the debts due from foreign nations. This statement of the premier brings up again the whole history of | the international debts—a storyi which goes far in undermining the | whole structure of international obli- gations and the whole fabric of in- ternational good faith. Debt obli- gations contracted under the most . Taxpayer Calls Treatment. of a program to save debtor nations from defeat and ruln, will take their place alongside of other broken prom- ises and scraps of paper. If these obligations are not binding and to be faithfully observed, one can hardly think of an obligation which would be binding. Obligations Are Binding. Those who were present when the loans were made and listened to the pleas for speedy assistance, even as they waited for the ordinary formali- ties of the transaction, expressing fear as to what might happen, have some difficulty in realizing that those declarations were by the representa- tives of the same nations which now declare the debts are dead. It seems incredible that obligations created under such circumstances would be considered as less than obligations of honor. Logically, there is not a mortgage upon an American farm that has more honor or verity behind it than these debts. There is not a treaty nor an obligation now extant, after a quarter of a century of wreckage, more binding than these obligations, now pronounced void—discarded, dis- owned and denounced as dead. It is international communism. It is in- dictment of property rights by great nations whose civilization rests upon the sanctity of contracts. There is no international constitution de- claring against the impairment of contracts. But this constitutional provision was supposed to have been written in the code of honor long be- fore it was written in the funda- mental law of the republic. It is worth while to record again that these debts now rest upon ad- justment and settlement made long after the war was over. The debtors | | came and were heard fully and com- | pletely. All claims, all equities, were | considered and the great nations voluntarily came to an understanding and agreement. They were not set- tlements between victors and the de- feated. These settlements were not drawn up in the absence of the debtor and the latter told to sign on the dotted line, according to the precedent of Versailles. They were settlements between those associated in the war and after the war was over and the fullest and freest discussion allowed. And what were the settlements? Canceled $6,000,000,000. In these settlements we canceled, or acquited, the obligations of Bel- per.canti.af-France, 52.8 per cent; of 754 per cent; of Poland, 19.5 per cent; of Rumania, 25.1 per cent: of Yugoslavia, 69.7 per cent. In other words, after the close of the great war, at the time the adjustments were undertaken, foreign governments were indebted to the United States in round numbers in the sum of $12,000,000,- 000, but when the adjustments had been completed, the then present value of the debt was $5,800,000,00, being a cancellation of over $6,000,000,000. It was contended that this can- cellation was made in the interest of a better economic program; that it was made in the interest of financial recovery, of economic solidarity throughout Europe. It was made after taking into consideration everything which was entitled to be a part of the adjustment. And these are the| debts which- we are told are dead. Stand in Way of Trade. It is contended that these debts stand in the way of developing mar- | kets and building up trade. The con- tention seems to be that it is in the interest of trade and the develop- ment of markets that the taxpayers of the United States pay these debts in- stead of the taxpayers of the nations which owe them. In the budget of Belgium the precentage of the debt due us would be 2.45; the percentage of our debt in the budget of Great Britain less than 3.75; of Italy, 1.41; France, 2.65. If this situation were one in which distressed countries were making what payments they could and asking for time, it would be wholly different. In times of economic distress, considera- tion for the debtor, from the home- owner and the farmer to great na- tions, calls for leniency. But that is not the present proposition—this is a case of renunciation, repudiation, which calls for a wholly different atti- tude upon the part of our Government. (Copyright. 1933 by the North American solemn circumstances, and as a part Newspaper Alliance. Inc.) Princess Marina’s Marriage May Effect Restoration of the Monarchy in Greece ATHENS, December 1.—There is much talk here of possible grave con- sequences from the marriage of Prin- cess Marina, cousin of ex-King George of Greece, to the Duke of Kent, Prince George of England. Opinion appears to be swinging slowly but steadily toward the view that this marriage may presage a royal restoration in Greece. A large faction of the Greek pepu- Iation has remained monarchist at heart. It is recalled that the late King Constantine was restored to the throne by a plebiscite after he had been driven from the throne by the allies during the war. Moreover, the republican movement has always centered around Venizelos, who today is 70 years old and practically out of politics. Little doubt is felt here that the restoration of King George II to the Greek throne would, in view of Prin- cess Marina’s marriage, be extremely agreeable to the British government, and it is almost an axiom in Greek politics that whatever England desires is generally done in the long run. Apart from sentimental considera- tions, Greek finances necessitate con- siderable borrowings abroad in the near future, and there does not seem to be any likely lender except Eng- land. The question arises whether the British government may not take advantage of this fact to bring about a series of cabinet crises here, the effect of which would be to create a demand for the return of the King. So long as Princess Marina’s fam- ily is extled from Greece, it is nat- ural that the British public should regard it as almost an affront to the » British royal house, ’ Publicity given to the wedding has no doubt paved the way for general acceptance of the idea of restoring the monarchy. All that would seem to be needed is a brief period of po- litical unrest, such as would certainly be provided by the budget difficulties that appear to be in the immediate offing. (Copyright. 1934.) - Educational Pictures Planned by Chinese NANKING (#).—The Chinese gov- ernment has decided moving picture audiences see too much of crime and sex and too few films with educational content. In consequence the Nanking gov- ernment has organized the National Educational Film Association, under the ministry of education, to make films of educational value. The asso- ciation has sought a loan from the British Boxer indemnity fund to finance its operations. It is the view of officials of the association that many educational films of foreign manufacturers are unsuitable for showing in China. It is planned to produce pictures of typically Chinese subjects. Chinese historical events will be re-enacted before the camera and Chinese scenic spots will be filmed. ‘The ministry of education has been requested to authorize the establish- ment of public theaters throughout the country for the exhibition of the films, which also will be shown in muy, secondary schools and col- gium to the extent of 53.5 per cent; | the obligations of Czechoslovakia, 25.1 | EDITORIAL SECTION he Sundwy Star WASHINGTON, Real 20th Century Dawns D. C, SUNDAY MORNING, DECEMBER 2, 1934. Ideals of 1800’s Lived Until World War—Conflict Aided Nationalism. BY ANDRE SIEGFRIED, Author of “England's Crisis.” Etc. REMEMBER very well December | 31, 1899: A new century was to begin the following day and the usual “Happy New Year” took on an added meaning, as it was rather naively, but generally"thought that great changes would be brought about by the turn of the century. But | |as far as could be seen everything went on as usual. The expected up- heaval was soon forgotten, however, and this even tenor lasted until the World War. In 1919 everything was altered, but instinctively every one hoped that the old regime which had | just come to an end would be revived. | It is only today that we perceive that the nineteenth century is dead and gone—it took us 30 years to reach that conclusion. | As the past recedes it appears to us | more and more in its true light—it certainly was not understood by its | contemporaries. They considered | their times as ultra-nationalistic and | ultra-protectionistic—the century of | Garibaldi of Gambetta, Meline and | McKinley—what a misconception; In reality, as we clearly see today, it was an era of economic international- ism, in great contrast to what exists today. England Was Guiding Hand. ‘This was particularly striking as soon as you left Europe—you at once entered into a sort of international mercantile republic. This functioned under the guiding hand of England, but was, in truth, open to all—at least to all of the white race. The world at that time enjoyed a whole | series of advantages that today have | sadly fallen into disuse; as we look | back on those days we begin to realize | | that we actually lived under a system of economic liberalism. Having made | a journey around the world during the last two years of the nineteenth cen- | tury I can truthfully say that I came | in contact with this system at first | hand. From personal experience I | can analyze it. | To begin with, there was an/ astonishing ease of exchange, as well | as of transportation and navigation. We have since then made much technical progress, but who would dare to boast that traveling is easier today? There also existed something which lives today only in our mem- ories, something which the younger generation is totally ignorant of—that is stability—economic and tariff stability. The latter remained fixed for a long time and varied but little, commercial treaties were almost permanent. Stability of Credit. ‘There was stability of credit: the word of honor of the large powers was never questioned. Three generations had lived on the income from invested funds without ever having a loss in dividends; when Leroy Beaulieu spoke of countries with financial difficulties it brought to mind only semi-civilized states not inhabited by the white races. Monetary stability was com- plete; the entire nineteenth century lived with confidence in the pound and the franc—their fluctuation seemed impossible. As far back as any one’s memory reached there had been no great change in costs; for three generations the price of a chicken, or an apart- ment, the amount of a dowry, re- mained comparatively the same. And finally there was a contractual sta- bility, in the sense that promises were generally kept; there was respect for a signed contract and even for a ver- bal pledge. From all these revered traditions, rules and customs sprang the eco- nomic condition, led by Europe, which is generally designated as Western civilization. Its principles, essentially human, were born in the eighteenth century. It was England, above all countries in the world, which became its chief exponent in the nineteenth century. Presents Total Contrast. ‘The twentieth century, in compari- son with the conditions which we have just described, presents an al- most total contrast. It is character- ized by a feverish nationalism in the field of politics, equaled—and this is the more serious—by a heavily armed nationalism in the economic field. Look about you—not only in Europe but, outside of Europe, as well—every- where are closed doors, everywhere barriers which divide the world into compartments. There is no longer any thought of an international mercan- tile republic; there is no talk of any- thing but more and more isolation. The nationalistic development was not created by the war, for it ap- peared earlier; but the war aided the growth of the methods by which it could assert itself. What renders the present protectionism so dangerous is not that the nations have such a passion for high tariffs; thn. real men- | | ace is the highly perfected arma- ments upon which they can draw. The protectionism of Meline con- fined itself to custom duties and made scarcely any use of prohibitory meth- ods. The war taught us to do so, however; it also showed us how to employ quotas, which served as a | base for interallied co-operation, and | have covered the world. finally it taught us the regulation of foreign payments from which the present regulation of exchanges has grown. We have here, especially in | this latter process, the equivalent of | to limit the free circulation of men— | & hermetically sealed customs barrier, which would not have existed, I be- lieve, if the war had not given us the opportunity to perfect this mechanism. Add to this the monetary situation, with depreciation of a currency put | at the service of the exporters. and | | we have the cheerless picture of the | economic barbed-wire fences which | | I have not even begun to tell the whole story, for the twentieth cen- tury, not content with limiting the | | circulation of goods, has also begun something the preceding century never | ROOSEVELT TO DEPEND ON RIGHTISTS IN SENATE ‘Democratic Conservatives Most Promi- nent Among Adviséis Summorniéd by President. BY JOHN SNURE. RESIDENT ROOSEVELT in the P coming session of Congress will have to lean heavily on a group of conservative Demo- crats at the Capitol, and par- ticularly in the Senate, This fact is coming to stand out with increasing distinctness as the date for opening the session comes closer and as the President enters into conferences on the legislative program with various advisers and lays the foundation for his annual message t> the two houses. In all of the talk and speculation as to whether the President is going to steer the administration to the right or left, it is generally overlooked that he is consulting for the most part with Democrats in Congress who are inclined to be conservative. That has been true as to his conferences at Warm Springs and there is every rea- son to believe it will remain true after his return to Washington. In the course of the Winter the President, of course, will talk with Democrats of varying shades of opinion, but there seems no doubt that he will depend for his program mainly on leaders in his own party of conservative type. Support to Be Sought. In so0 far as the President dictates a legislative program, a series of legis- lative measures, to Congress, he will evidently seek first of all the support of these Democratic leaders. Once he has assurance of their support he will know that he is certain of a large share of the Democratic machinery, since it is obvious that much of the rank and file of the Democrats in the two houses, and especially the newly elected Democrats, will take orders from the executive end of the Govern- ment and will vote for whatever the President urges. One or two excep- tions may be found to.this general rule, as in the case of the bonus. For the most part, however, it is clear that most of the Democratic membership of the two houses will take the same course as was 80 marked in the recent regular session and in the extra ses- sion, and will line up for whatever bills are urged by the White House. It is not without significant bearing on the legislative policies which the President has in mind that he has been talking of late with Senator Joseph T. Robinson of Arkansas, Democratic leader of the Senate, at Warm Springs; likewise with Senator Pat Harrison of Mississippi, chairman of the Finance Committee, in some respects the most powerful committee in the Senate. Aid of Three Leaders Needed. It is equally interesting that Vice President John N. Garner is soon to quit the hunting and fishing delights of the Uvalde region of Texas and come back to Washington for intimate talks with President Roosevelt on the legislation for the coming session. These are three outstanding Demo- crats whose support this Winter the President will seek and will need. Others among the Senate Democrats on whom the President will depend in- clude Senator James F. Byrnes of South Carolina, prominent on the Ap- propriations Committee, and men- tioned for the Democratic leadership if it should turn out that Senator Robinson later obtains an appoint- ment to the Supreme Court. Senator Duncan U. Fletcher of Florida, vet- eran chairman of the Banking and Currency Committee, is another mem- ber of the Democratic side who will be freely consulted. He was in confer- ence with the President on banking legislation only a short time before Mr. Roosevelt departed for the South. mmummfu&:m‘f of Virginia, who does not always go along with the administration, but who, it has to be remembered, is chairman of the great Committee on Appropria- tions. It will be necessary for the President to take into account the business-like and conservative opinions of Senator Glass when it comes to plans for spending Government money. | All Inclined to Right. All thess Senators incline to the | right and away from radicalism. The | President will have them at his office | frequently through the Winter. In| | fact, over the telephone, the President | | will be in practically constant touch | | with them. The list might be en- | larged to include Senator James Ham- | | ilton Lewis of Illinois, chairman of | the Democratic Senatorial Committee; Senator Kenneth McKellar of Ten- nessee, who is prominent on the Ap- propriations Committee; Senator Key Pittman of Nevada, President pro tempore of the Senate and chairman of the Foreign Relations Committee, and Senator Walter F. George of Georgia, chairman of the Privileges and Elections Committee. It is, of course, true that President Roosevelt in the course of the Winter will consult men of every shade of opinion in Congress. He will not con- fine nimself, for that matter, to talks with Democrats. In the first place, he will confer from time to time with the leaders of the progressive Republican or progressive bloc, men such as Sen- ator George W. Norris of Nebraska and Senator Robert M. La Follette of Wisconsin. Not improbably, he will call in on one or more occasions Sen- ator William E. Borah, former chair- man of the Foreign Relations Com: mittee, especially if the international situation becomes more troublesome, as it threatens in some respects to do. Farley Gunning for Borah. It is well known that Postmaster General and National Chairman James A. Farley is already out gunning for Senator Borah in 1936, and it may be assumed that he has the support of the President in this political hunting expedition. Nevertheless, the Presi- dent and the Idaho Senator both are too astute and broadminded to let a matter of this kind interfere with a reasonably frank discussion of legisla- tion or diplomacy which concerns the country as & whole in important and even grave particulars. Furthermore, the President, it may be anticipated, will have in some of the foremost chiefs of the regular Republi- can organization. Senator Charles L. McNary of Oregon, Republican leader of the Senate, who seems sure to retain that post, will have the entree to the executive offices at any hour and cer- tainly will be consulted from time to time by President Roosevelt. But while it is true that the President will take into consultation members of the two houses of all varieties of eco- nomic and political belief, the fact re- mains that he will anchor his program of legislation primarily to the group of conservative Democratic leaders in the Senate, as already indicated. He can hardly do otherwise. Should he take the advice of some of his leftward ad- visers in the official circle and adopt a course of pronounced radicalism he would be likely to find a conservative Democratic revolt in the Senate on his hands, which would not only threaten the disruption of his party, but might imperil his chances of re-election in 1936. Senator Robinson will be retained as Democratic leader of the Senate with- out opposition. In fact, the question of electing a successor may not ever be raised, inasmuch as the Senate is a continuing body. Leaders such as Glnss, » Benators HarTison, Tistcber, l did. There are not only quotas for | importations, there also are quotas of | immigration—a notable example is | given by the United States. Before the war you were held up at any | frontier if you were an undesirable, | sick or insane: the new doctrine means | that you can be excluded for reasons of color, race or the shape of your head. The English themselves can | no longer settle freely in several of | their dominions. | There are barriers to protect the | standard of living and the rate of wages, at the same time that extensive tariffs protect the free circulation of products. These same ultra-national- istic ideas have given birth to the great folly of the passport require- ments. When I journeyed around the world in 1898 I hardly took any kind | of papers of identification with me. | Today getting ready for a trip re- | sembles the preparations for a diplo- matic mission; there are visas, vacci- | nations, authorizations and certifi- cates, and one is never sure that he has not forgatten something. What | did Phineas Fogg do when he took the | train for his trip around the world | five hours after he had made his famous bet? It was possible for him to arrange his passport and to fill his | purse with a fortune in gold and bank notes in five hours. He couldn't do it today. Measure Feebleness of Progress. ‘These things measure the feebleness of our progress. Perhaps it needs only fifteen or twenty days to encircle the globe instead of eighty days—but how much time is needed in connec- tion with passports and banks pre- paring for such a trip? Such is a foreshortened criticism of our times; we see admirable technical progress—but who knows but what it is a retrogression for the human race? As it is hardly likely that this situa- tion will change very soon we must adapt ourselves to it. This adaptation, when it is really accomplished—this will be the twentieth century. Paris Restores Old Archbishops’ Palace I PARIS (#).—France’s public works | program for the reduction of unem- ployment is restoring to life one of the royal landmarks of medieval Paris. The palace of the Archbishops of Sens, upon completion in 1507, was occupled by great ecclesiastical ten- ants for nearly a century. King Henry of Navarre, then appropriated the res- idence and fitted it out as a consola- tion gift to his former Queen, the light-hearted Marguerite of Valois, who made the palace a rendezvous for the greatest writers and artists of her time. After Marguerite’'s departure, the palace fell on hard times. PFirst it was a shelter for wagons and stage coaches. Later it was transformed into a jam factory. Finally, just before its purchase by the City of Paris in 1911, it reached the bottom of its decline when it became a coalyard. But now all trace of the jam and coal is being removed and the palace restored to serve as a civic museum. Pittman and Lewis are assured of their places in the organization. These, with a few others, constitute the present- day “elder statesmen” of the Senate. They are the elders of the upper house today, just as some years ago Nelson W. Aldrich of Rhode Island, William B. Allison of Towa, Eugene Hale of Maine and Orville H. Platt of Connecticut were the ‘“elder statesmen” of the Senate and held the programs and policies of that body in their grip com- pletely and sometimes remorselessly. Up to a certain point, it is true, President Roosevelt can dictate legis- lation to Congress, but, on the other hand, he is obliged to work with the legislative machinery which exists. As already indicated, the machinery which he will have to employ, espe- cially in the Senate, is dominated by Democrats of more or less conservative thought. So far as the House is concerned, the selections later on of the Speaker and of the majority leader will to & large extent determine the course of the President in consultations as to the House program. It is clear, how- ever, from the candidacies, that the selections will be among members who will easily accept White House sug- gestions or directions. The House is expected, as in the Seventy-third Con- gress, to be once more a “rubber stamp” in a legislative sense. It is in the Senate that there are real possi- bilities of dynamite. Thus far it is not without interest to observe that the President has not been calling in for conferences any of the radical or leftward Democrats in Congress. This does not mean they will not be consulted, but it at least raises the belief that at this minute they are Dot in tha jegislative saddie, 4 Special Articles OF FUTILE |U. S. FACES PROCESSION DEBT NOTES $500,000,000 Still Could Be Salvaged From Europe if Accepted as Final Payments on Accounts. BY FRANK H. SIMONDS. T IS a profound pity that one more due date for the war debts is destined to pass marked not by any attempt at an intelligent disposition of this question, but only by a new flood of recriminations and resentments. And this, in turn, means that it is still impossible for the Roosevelt administration, Ppolitically, to do what is practical. Even today it would still be possible to collect something like $500,000,000 on these accounts if accepted as a final payment. The countries which no longer admit the economic validity of the debts (and it is the economic validity alone which counts now) are still ready to pay scmething to escape the continuing reproach of repu- diation. I said that the debts have no economic validity because it is clear to all who have viewed the question objectively that when the United States set out to collect the war debts | and at the same time to raise the tariff barriers to protect its own do- mestic market it rendered it practically impossible for the debtor nations to continue their payments over any long period of time—in fact, beyond the extent of their gold reserves. Couldn’t Pay Without Loans. ‘The whole structure of the war debt settlements would have collapsed | almost as soon as it had been com- | pleted if the United States had not | launched itself in 1924 upon that cam- paign of foreign lending. which lasted to the panic of 1929. It would have collapsed because without our loans the debtors could not have paid at all. Witn our loans, however, they paid until we stopped lending. paid for another year, while the pro- ceeds of our past loans were still available But our debtors only paid us be- cause we lent Germany more than enough to permit her to pay our debtors reparations, which they turned back to us. When we stopped lending, the first German crisis led Mr. Hoover | to decree his moratorium. he offered to let the war debtors off if | they would let Germany off. And Mr. Hoover wanted Germany left off be- cause we had several billions of dollars invested in the Reich which would become worthless if Germany crashed. Then the allies and the Germans met at Lausanne and reparations were abolished, although there was a saving clause that such reiease was con- tingent upon American cancellation of war debts. But the source of all debt payments was now dried up. We lent no more, s0 the cancellation by de- fault began. France led off; Britain paid ance more ‘and then fell back upon token payments, which stopped with tbe Johnson law. Not Question of Law. Now the case of the debtor nations “Ls not based on a question of law. They do not deny the validity of our claims. What they say, in effect, is “we borrowed raw materials manufactures from you to fight a war and gave our note for those goods measured in money, but we never took any considerable amount of money from you and therefore we have none of your money with which to pay you back. If you will buy our goods we shall get the money and can pay you. But if you refuse to buy our goods and then continue to insist that we pay. while your claim is legal, your method of collecting is contrary to common |sense. We are helpless because you refuse to accept payment in any form in which it can be made.” A good deal of light upon the whole question has been supplied in recent months by German events. The Ger- mans owe very large sums to us and the British and French. But since they buy more of us than they sell, they can claim inability to pay us be- cause of our higher sales. On the other hand, the British and French buy more of Germany than they sell. They are therefore in a position to keep the difference and apply it to the payment of their debts. Their debt claims are legally no more valid than ours, but their economic validity is quite different. As a consequence, Schacht makes arrangements to pay the French and British and tells us he can only pay us if we buy more German goods. We have no remedy and economically no case, because Germany has no liquid capital, no considerable gold reserve, no favorable balance in foreign trade. So step by step international trade falls to the level of direct barter. British Appreciate Situation. The British have appreciated the | situation more clearly than any other creditor nation. ample, owes them for past loans. The British buy enough wheat from the Argentine to enable the South Amer- ican debtor to keep up the interest on the loan. Little by little the British have adjusted their foreign trade to the poini where they can collect the debts by buying. We, by contrast, have no such resource, so we continue to send the bill on due date. What has not arrived as yet in this country, either in political circles or outside of them, is the recognition that no foreign debt has any value save as we are able to accept payment for it in goods. And within the cate- gory of goods, of course, is included services—the sums we spend on for- eign travel and on foreign freight car- riers. All the talk in this country about the revival of our foreign trade is still based upon the idea of finding fresh markets for American products. What is worst about the whole debt mess is the fashion in which it has served to create the impression in this country that in some fashion the cléver European got the best of us, that we were innocent and guileless and funda- mentally honest, and were deceived. Our trouble was really the fact that no one appreciated that foreign trade was barter, that what a country sold had to be balanced by what it bought, that once we set out to collect debts we had to reduce sales. The only other way was to increase purchases. Europe No Wiser Than U. S. At the outset the Europeans were no wiser than were we. They made the same mistakes. The British set out to make the Germans pay reparations with no clear perception that in order to pay the Germans had to sell more abroad and that as they sold more—since the world market was limited—the British would sell less. So suddenly the British found their own foreign trade declining and Ger- many’s growing, ] They even | In effect | and | Argentina, for ex- | taking the place of British in France. German manufacturers were replacing British and Germany was crediting her new sales against reparations. Ultimately the British woke to the realization, but by that time they were driven to the position of putting on a tariff and going off gold. Then they went to work systematically to arrange to take their imports from their debtors. And on that basis their debt- ors were willing to pay. We have never attempted to arrange our foreign pur- chases in such fashion as to buy from the debtors, because we were always | confronted by the fact that we sold more than we bought After the great crash of 1929-30 an enormous public sentiment was stirred up against the wicked bankers who made bad foreign loans. But if the bad loans had not been made the | shrinkage in foreign trade and the repudiation of the war debts would have come much sooner. If we were going to try to collect the foreign debts there was no way to do it but to lend the money. If we were going to try to maintain our export balance there was no solution save to lend the customers the money with which to buy. National Unity Aim. ‘There still exists in this country a widespread notion that foreign trade can be improved at the same time that every energy of the Government is being expended upon establishing a self-sufficient Nation. The New Deal is founded upon the idea of America as a national economic unit. Foreign trade is still considered incidental, something you pick up along the way as you continue to follow pelicies con« sonant with the spirit of extreme eco- nomic nationalism. To expand its foreign trade the United States would have to decide | what of its domestic production it would abandon—just as, in the same way, to collect the foreign debt it would have to decide what part of its domestic markets it would surrender | to the foreign debtor. And that phase |of the problem has never yet be: fairly faced. Secretary Wallace has tried to explain it, but he has had little influence upon the Roosevelt administration and none upon Con- gress. Now we have lost all of the war debts and we shall lose all of the private debts except those owed by | countries whose raw materials or goods we can afford to accept in pay- ment. But so far as one can now | see nothing is going to free us from the feeling that in some way we have been cheated because we remain totally unconscious of the fact that we wanted to be paid in money, which did ‘not exist, and refused to be paid |in goods, which did exist and were | available. New Repudiation Likely. | When our debtor nations refuse to | say on December 15, as they, of course, will, we shall see a new repudiation as having its origin in a continued bad faith. The President could tomorrow insure British payment on a large scale if he were able to retire the | American Merchant Marine from the | seas and let the British carry aur |goods. We could make the Germans pay if we increased our purchases from the Reich and reduced our sales | to them. | But we want our ships and we want | our sales of cotton and oil and other | things to the Germans. And the great ! weakness of the administration in | dealing alike with foreign debts and foreign trade has been its failure so far to tell the country what is actually | the truth—that it has adopted a policy | which makes the payment of either | war or private debts impossible, the | policy of economic nationalism, which | can be combined with debt collection | by & country which buys more abroad | than it sells, but not by a nation which like ours sells more than it buys, Johnson Canceled Payments. Actually, Mr. Hoover suspended pay- ments on the war debts and Senator Johnson canceled them. Now it is possible to look forward to a long pro- cession of due dates, before which notes will be solemnly dispatched by the State Department to the debtor nations and politely ignored by them. Then some day, when the question of balancing the budget becomes real again, an administration will find it profitable to accept a quarter or a | balf a million of dollars to close the account. Until that time, however, there seems no way of escaping & semi- annual exchange of recriminations based upon the American conviction that the debtors are dishonest and the European belief that the United States is unreasonable. (Copyright. 1934.) - Chateau of Chinon Restoration Assured ‘TOURS, France (#).—The ghosts of Joan of Arc and King Charles VII of France soon will have a roof over their heads if they wish to walk and talk again in the Chateau of Chinon. In 1428 the peasant maid of Or- leans and the ruler of the French first met in the already historic chateau. From there Joan rode out at the head of the King's legions to lift the siege of Orleans and defeat the invading English army. Now Chinon is & hollow shell and the hall where the historic audience was held is without a roof, expoged to the ravages of wind and rain. The government, heeding the pleas of his- torical societies, has added 20,000 francs to an equal amount subscribed by the Department of Indre and Loire, and a public subscription has been opened to raise enough to repair the chateau and bring back to life the set- ting of 1428. When the English forces were rav- aging the countryside and Joan of Arc remained the only hope for French victory, Chinon already was five centuries old, Stones in its foundation were left by Celtic bands before the dawn of the Christian era. In the twelfth century King Henry I of England died there. Property of the Counts of Blois and Anjou for hundreds of years, Chinon was acquired by Cardinal Richelieu in , and his descendents lived there French Bevolution, German coal was!until the