PANACEA

It is only now that people are beginning to understand the Moratorium which was sprung on an unwitting public a few months ago. At that time all the world thought that President Hoover had by a stroke of genius ended the Depression. The word Moratorium was a magic spell on the lips of everyone. Prosperity was soon mysteriously to return, although no one had any idea how it was going to be brought about.

Now it appears that the plan for an international debt holiday was not Hoover's at all, but rather that it was forced on the unwilling President by D. W. Morrow, Ogden Mills, and bankers in Wall Street. They had no illusions about its ending the Depression, but only hoped to ward off the pending financial panic in Germany. Since American bankers had lent large sums of money to Germany between 1924 and 1928. In order that she would be able to make her Reparation payments, her financial collapse would be disastrous to the possibility of Wall Street ever regaining its money. Obviously the only way out was to waive all public debts for the time being. But this had to be done at the expense of the government and ultimately of the taxpayer.

If the Moratorium had not been instituted, however, Germany would not have been able to make payments on either private or public debts. It was, therefore, unavoidable, that, with conditions becoming worse, Germany may not be able to pay anything at all. In that case Wall Street will be severely affected, and the financial condition of the country will be menaced.