THE PRESIDENCY: Moratorium

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cuts at next year's conference, if they want any permanent modification of the U. S. debts. Not alone could President Hoover execute a moratorium, even if the other nations accepted his proposal. War debt settlements are part of U. S. law and only Congress can suspend their operation. It was to win Congressional support well in advance that the President had summoned some Senators and Representatives to the White House, telephoned others. Adroitly he had averted political opposition by pitching his plan on a non-partisan level. In his statement he was able to list 21 Senators (twelve of them Democrats) and 18 Congressmen (four of them Democrats) by whom "this course of action has been approved." Next debt pay day is Dec. 15. Congress assembles Dec. 7. President Hoover was confident that, with the support already lined up, he could have the debt laws suspended in the first week of the session. As further political insurance, the President also had his moratorium plan approved by potent Democrat Owen D. Young, chairman of the committee which fixed German Reparations "permanently'' in 1929. Announced Mr. Young: "The proposal . . . is not only the action of a wise creditor but the helpful word of a great democracy. Coming at a time when we are all beginning to doubt whether a democracy could act promptly, wisely and helpfully, it is most encouraging.''

As Secretary of Commerce. Mr. Hoover was a member of the U. S. Debt Funding Commission which negotiated final settlement with the Allies. No one is more familiar than he with the Republican Party's long insistence that no legal or moral connection exists between the Allied Debts and German Reparations, despite the fact that 75% of Germany's $28,000,000,000 Reparation payments are destined to reach the U. S. as Debt payments from the Allies. The Hoover moratorium proposal was the first time a Republican President had ever admitted a connection between these two great items of international finance as a matter of practical economy. Trying to reconcile party policy and practical necessity, he offered this neat but ostrich-like explanation:

"We purposely did not participate in either general reparations or the division of colonies or property. The repayment of debts due to us . . . was settled upon a basis not contingent upon German reparations or related thereto. Therefore, reparations is necessarily wholly a European problem with which we have no relation.

"I do not approve in any remote sense of the cancellation of the debts to us. World confidence would not be enhanced by such action. None of our debtor nations has ever suggested it. But as the basis of the settlement of these debts was the capacity under normal conditions of the debtor to pay, we should be consistent with our own policies and principles if we take into account the abnormal situation now existing in the world. I am sure the American people have no desire to attempt to extract any sum beyond the capacity of any debtor to pay, and it is our view that broad vision requires that our Government should recognize the situation as it exists. ... It represents our willingness to make a contribution to the early restoration of world prosperity, in which our own people have so deep an interest."