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Bluntly these visitors told President Hoover that Congress was dead set against any suspension of the Dec. 15 payments and any reconsideration of existing debt agreements. Europe had presented a solid front against the U. S. Now Congress was determined to present a solid front against Europe. They refused to believe the debtors would default or that payments would unsettle world finances. No facts had yet been offered to warrant reconsideration. If the debts were reopened, the end would be a general scaling down of obligations to the detriment of U. S. taxpayers.
The President agreed that the Dec. 15 payments should be made. He also indicated that he was against any downward revision. Pertly broke in Speaker Garner: "Then why converse about it?" The President replied that he wanted Congress to give him another commission. Senators and Representatives chorused "No!" and advised him to use the regular channels of diplomacy to study revision pleas. The
President's retort was that his hands had been tied by the rider against any further debt tinkering which Congress tacked on its approval of the first moratorium a year ago. President Hoover said that regardless of Congress he would speak his mind, do what he thought was right. His visitors vowed to do likewise, as they marched out of his office to be photographed on the White House steps.
Summoning a stenographer President Hoover proceeded to speak his mind in a 2,500-word debt statement. Main points: 1) The debts are actual loans which must be repaid; 2) each debtor nation must be dealt with individually; 3) "capacity-to-pay" is the only just measure of the debts; 4) debts have no connection with Reparations received by other powers from Germany; 5) every debt concession transfers an added burden to U. S. taxpayers. Declared the President :
"I do not feel that the American people should be called upon to make further sacrifices. ... I must insist that existing agreements be respected until they have been mutually modified. ... As to the suspension of instalments due Dec. 15 no facts have been presented by the debtor governments which would justify such postponement. . . .
"[But] it is unthinkable that within the comity of nations our people should refuse to consider the request of a friendly people to discuss an important question, irrespective of what conclusions might arise from such discussion. . . . Discussion does not involve abandonment on our part of what we believe to be sound and right. On the other hand a refusal to afford others an opportunity to present their views would be a negation of the very principles upon which rests the hope of rebuilding a new and better world. . . .
"I believe therefore that Congress should authorize the creation of an agency to exchange views."
As a sop to the debtor nations the President proposed that they be allowed to meet their Dec. 15 payments in their own depreciated currency rather than in gold dollars as fixed in the bond. Under this arrangement a non-gold nation like Britain would be permitted to set up a temporary credit to the U. S. in pounds sterling, provided it guaranteed to make full payment in dollars later when exchange rates improved.
Before releasing his statement President Hoover gave an advance copy of it to