TOO MUCH TO PAY

Puzzles should be nothing new to President Hoover. His administration has been one filled with almost insurmountable difficulties. First it was the question of unemployment. Now when this question is still far from solution, there comes a plea from Germany for a cancellation of the debts which she owes the United States. She says that she has reached the limit and cannot pay the reparations or the interest on her debt. Unless relief is given, disaster is claimed to be inevitable. This would mean a facist or a communist state and the accompanying military or economic danger as the case might be.

The complexity of this case is not lessened but increased by resort to economics. Sound economic policy would dictate that debts be paid. As an economist the President would be inclined to insist on payment or bankruptcy. But all the other considerations urge the contrary action. The danger to the rest of the world if the possible result mentioned above should take place is great enough to make anyone wonder if sound finance will always give the best results.

The view that other nations are taking also oppose any leanings which the President may have as a result of his wide experience in business. They claim that the burden which Germany is suffering in largely due to the money that is passing from her across the ocean. This view seems to be the result of the inability of these nations to separate debts from reparations. They feel that it is no less financially sound to cancel debts than reparations imposed in a time when the temper of the nations was vengeful. While a little clear thinking would show the protesting statesmen that cancellation of reparations is the first step, the opinion of these nations must be given weight. The United States can afford to give in quite freely for the sake of maintaining good felling. Such a policy has been shown by the administration on former occasions, that of General Butler in particular.

Accordingly, most of the considerations appear to urge at least some concession to Germany's demands. Such a step would not only help Germany in her present plight directly but might induce the other nations to reduce the indemnity that was so rashly imposed by the victors.