Evening Post WEDNESDAY, FEBRUARY 15, 1933. WAR DEBTS AND GOLD

Evening Post, Volume CXV, Issue 38, 15 February 1933, Page 8

Evening Post WEDNESDAY, FEBRUARY 15, 1933. WAR DEBTS AND GOLD

A fortnight has passed since the President-elect of the United States, in anticipation of the responsibilities which do not formally begin till March 4; had a preliminary discussion of the war debts problem with the British Ambassador, and thereby, according to some constitutional sticklers in the Senate, "took complete authority away from President Hoover and the Secretary -of State, Mr. H. s L. Stimson, where it still legally belongs." As very sensible course for the purpose of saving time in a desperately urgent matter had been fully approved by the President himself and actually arranged by the Secretary of State, jealousy for the interests of their party rather than for those of j the Constitution may be .presumed to have inspired these .sticklers'. But, whatever were their motives, they should be relieved to find that the public spirit which has induced the President to co-oper-ate in reducing the.difficulties of his successor • and the dangers of the country has not involved the- complete, self : obljterati6n proclaimed by his- critics'! With little more than a. fortnight of his term still to come President Hoover has taken advantage of a Lincoln Day celebration to deliver a comprehensive speech on the settlement of war debts and the restoration of economic peace which may be the last of his notable official utterances, but is certainly not the least interesting or important. The keynote of the President's speech to the United States Republican Club as reported from New York today is a call to the world to' re-establish itself upon the gold standard as tho only mean, of avoiding "an incipient outbreak of economic war." But coupled with this call is "the suggestion that a 'swap' on war debts might be acceptable to gain this end." If. this suggestion of "a 'swap' on war debts" is vague, it is at least better than the blank negative of the President's principal Message to the "lame duck" session of Congress'on December 6:— Our Government has informed them (the European Governments) that wo do not approve of the suspension o_ the December 15 payments. But it is to be noted that even this admission of a possible "'swap' on war^ debts" is only contemplated as' an incident in a wider .settlement The cancellation or reduction of the war debts is not regarded as an end, in itself which is" just as necessary for the welfare of America as for that" of her debtors.' It might, however, be. acceptable to gain another end—namely, .the restoration of the gold stahdard-as the only means of averting."an" incipient' outbreak of economic war." / America mus^ be prepared'to writs off a part, at any rate, "of, her war debt in order to achieve.these capital objects. ; ' . . Perhaps'tlie most surprising point in Mr. Hoover's appeal is the epithet in,the phrase ''an incipient outbreak, of economic war." He does not invite the nations-to" get together, to "stop fighting, and to realise that it is only on the principle of co-opera-tion and give-and-take that . their trade, whether international or domestic, can prosper. He does not realise that the nations have been engaged for years in an economic warfare which, year by. year, has. been growing more and* more destructive, that one of the principal instruments of this warfare has been the.piling-up of tariffs to a point at which they are throttling trade and impoverishing the world, and that the suicidal process is aggravated by the creditor nations whose debtors are unable to pay1 in gold, and are prevented by the tariff barkers, from paying in goods. None of these things can President Hoover see' for the simple reason that his own country, with its'- high tariff walls and the impossible conditions which its commanding position as the great creditor nation- has enabled it to enforce upon its, debtors, is the arch-obstructor and the archdestroyer of the world's trade, and that it is very largely as the result of his own policy that it has taken up this position. Thus it is that President Hoover does not call upon the nations to put a stop to the economic warfare by which they have been devastating the world for years. All that he "sees, and all that he invites them to stop is "an incipient outbreak" of this kind of warfare, and', he has a remedy to propose which will leave the American tariff just as it is, and Europe's war debts just as they^re, except in so far as a' part of the latter may be written off as an inducement to the debtors to co-operate. President Hoover has many fine qualities and has done some great; work for his cduntry during one of the most heart-breaking terms that any President ever had, but his uncompromising attitude to the tariff and his similar attitude to the war debts ever since his statesmanship won the gratitude of the world by the Moratorium of 1931 make one turn with hope to his successor. as likely to be less rigid on bolh points. It must, however, be admitted that the matter wjth which 'Mr. Hoover was principally concerned in his

Lincoln Day speech is of capital importance, and that he handled it well. He advocated the re-establishment of the gold standard among the leading nations as the measure that is most urgently needed for the rei habilitation of the world, and he , lightened bis task by pointing out I that from the international sland- | point there was no need for the nations forced off the gold standard to restore the former gold values. It will, suffice if it is only fixed. To do this, ho continued, it is only noccssary to -have strong and courageous action on the part of the leading commercial nations. If some sort of international action bo necessary to' enable tho banks to co-oper-ate for tho purpose of-stabilising currencies, tho nations should have no hesitation'in joining in such an operation under proper safeguards. Britain would certainly require a condition of this kind. When the withdrawal of gold from London to Paris brought her off the gold standard, and M. Flandin came to London to help in picking up the pieces and put her back again, he was astonished to find how cheerful and firm Mr. Chamberlain and his colleagues were and that they insisted upon a number of stiff conditions, of which one was summarised as follows:— There must be a satisfactory international currency agreement such as will enable the pound to return to gold without a-.repetition of the danger that drove' it off gold in September (this involves a specific, formulated undertaking on ,the part of tho Central Banks that gold resprves will, be limited to an amount which will not interfere with the exchange function of gold). The restoration of the.gold standard will be a complicated and arduous , problem, and if the incoming Presij dent shares his predecessor's view that the war debt settlement' must be tied up with it, there will cerI tainly be no settlement before next j pay-day. ...