The Daily Alaska Empire

The chart shows the amounts the one year moratorium on war debts and reparations will cost the various creditor nations in income during the one year holiday and how much Germany will be richer for the year. The figures are approximate.

Aid to World Business
Likely
to Offset Loss
Of Europe's Payments
Aid to World Business
Likely to Offset Loss
Of Europe's Payments
(Continued from Page One)
have to pay at the maximum to
meet the debt waiver will be equal
only to one-fourth of what he
might be called upon to put up
anyhow to meet the deficit as it
now stands.
It might notprobably would not
--cost him more at this time.
Funds Apply on National Debt
Payments of war debts received
by the Treasury until now have
been employed toward reduction of
the national debt. The total re-
ceived from that source has
amounted only to approximately
two and a half billions since 1919,
although in that period the total
reduction in the national debt has
been more than nine billions.
Broadly speaking. debt payments
have equaled less than a third of
the total national debt reductions.
With debt payments waived for
a year it will remain for Congress
and the Treasury to determine pol-
icy as to national debt reductions.
They also could be deferred for
a year. in which event waiver of
debt payments would have no im-
mediate effect on taxpayers.
Indirect effects of the situation
in Germany and the possible reper-
cussions on the economic situation
at home are far more important,
and not subject to any definite
computation.
It has been pointed out. for in-
stance, that private loans made to
German states and municipalities
and to German industry and busi-
ness by foreigners represent some
five billion dollars, of which pos-
sibly half came from this country.
Those bonds or other securities
now are held by American investors
having been marketed by the bank-
ing groups that carried through the
transactions.
The interest Income irom these
securities plays its part in Ameri-
can purchasing power at home.
Any political upheaval in Germany
that upset those interest payments
would have a direct effect on busi-
ness conditions in the United
States.
Similarly such developments in
Germany will for a time at least.
destroy Germany's power to buy in
the American market. She is chief-
ly a customer for American farm
products and other raw materials.
Added to the possibilities of a
collapse of the German govern-
ment would be the effect on Ameri-
can overseas trade, due to steps
which might be taken by countries
surrounding Germany to meet the
situation.
What those might be. or how
they might further limit or disor-
ganize existing American overseas
markets. already at low ebb in con-
suming power, is merely a matter
of speculation.
Added disruption of trade how-
ever would almost certainly. in the
beginning at least, be reflected by
more unemployment in this coun-
try.
All these factors and many more
entered into the situation with
which the Washington government
attempting to deal through the
proposal for a debt and reparations
holiday.
Every Congress and President
from Wilson to Hoover has main-
tained that there is no connection
whatever between the two. the
United States not having demand-
ed any reparations payments from
Germany either in money or colon-
ies.
Faced by the crisis in Germany
which might even engulf the world
again in war. however. President
Hoover has been forced to accept
the unavoidable economic relation-
ship of debts and reparations in a
time of world depression because of
the grave threat contained in the
German crisis of further peril to
American business at home.