PRIDE AND PREJUDICE

Chancellor Von Papon declared yesterday that the only way Germany could pay her war debts was through the exchange of goods. There is nothing new in this. It is the old story of a Germany hopelessly tangled in a mass of debts and on the verge of bankruptcy. Everyone knows that Germany is unable to pay in full. As a matter of fact by the Lausanne agreement which cut reparations almost to zero the statesmen of the Western World, if not its parliaments, admitted Germany could pay no more.

For a decade the whole affair has been moving in a vicious circle. The United States leans money to Germany; this is paid to the various European countries as reparations; they in turn pay it back to the United States as their war debts. In other words no money is paid at all. Von Papen's statement is a perfectly solid fact. Unless tariffs are lowered Germany cannot sell her goods abroad., no credit can be built up, and thus no debts can be paid. Since no country will consent to lower its tariff purely for economic idealism, the moratorium must be indefinitely extended and fresh loans made.

The situation is in itself a severe indictment against national, political shortsightedness. Eventually the creditor nations will have to agree to at least a partial cancellation of war debts. The United States could have done much for the promotion of international good feeling by offering partial cancellation a year ago or earlier. The chance for a gracious gesture has gone. Anything that is done now will be done under compulsion, only because there is nothing else left to do. The facts will beat the pride and prejudice of the Senate, but Senatorial obstinacy will apparently be maintained to the last, at the cost of international good will and friendly relations.