State of Europe

More anxiously than for months past, financiers and statesmen scanned the state of Europe last week. On the U. S. horizon optimists had discovered pale streaks of hope (see p. 11). Would Europe stand? There was plenty for them to think about. On the credit side, the week passed without any major political disaster. Stock markets in Paris, London and Berlin all continued to rise. With millions in gold coming from India, the pound sterling rose 11-c- during the week to close at $3.51, highest since November.

"Let us wait and see," cried the politicians. "Maybe things will get better." Faced with the necessity for doing something about Reparations at the Lausanne Conference, the London Observer announced last week that Britain, France, Italy, Belgium had agreed privately that conference delegates will submit a proposal to Washington to extend the Hoover Moratorium from July to Jan. 1, 1933, arrange to resume discussions before that time and adjourn the Lausanne Conference as soon as possible. This was typical of other decisions. Postponement had become a policy--and a hope.

More eager to face the facts was Benito Mussolini. An article in his own newspaper II Popolo d'ltalia was generally recognized as coming from the pen of II Duce himself. He wrote:

"Will the governments of Europe again display the tremendous lack of will power which seems to paralyze them whenever they face this problem. , . .? The social and economic structure of Europe is steadily moving toward an abyss, and if it continues it will leave no alternative between repudiation of debts and chaos. . . .

"In the face of voluntary cancellation of reparations by the European states the American people could not insist on payment of the War debts and thus appear in history as the only profiteer of the War. Is it believable that the Americans could resort to hostile acts in the economic and exchange fields? The economy of the world is solid; whoever in any part of the world damages it damages himself; customs reprisals call for counter reprisals .... The world needs the United States, but the United States needs Europe and the world as never before."

The French Ministry of Finance published a preliminary estimate of the budget last week omitting all figures on Reparations and War debts.

From Sofia came rumors of a general Balkan moratorium. Premier N. Muchanoff of Bulgaria blurted out that his country must default on its debts if it did not receive more money from the League of Nations (Bulgaria owes the U. S. some $27,000,000). Greece had already made such an announcement. Two days later Premier Muchanoff thought better, denied that he had "said anything concrete on the subject." Harried Albania set up not one but five separate commissions to think of ways of raising more money. Rumania's Finance Minister, Constantine Argetoianu, was in Paris, begging. Spectacled King Alexander of Jugoslavia was luckier. He went back from Paris with a $14,000,000 loan.

A committee of U. S. bankers, trying to work out an agreement between Hungarian banks and their private creditors, gave up in discouragement last week. Month ago Hungary declared a moratorium on most of its foreign debt, excepted the short term loans of foreign bankers but at the same time begged that a "stillstand" agreement could be reached to freeze these for another six months. U. S. short term credits to Hungary total about $35,000,000. New York bankers agreed to the "stillstand" provided Hungarian bankers would at least pay interest and commissions on the loans falling due in the meantime. No Budapest bank had even that much money to spare. The conference fell through.

The same committee of U. S. bankers did reach an agreement with Austria. Austria has been paying 15%, of her out standing debts to the U. S. every 90 days. By the new agreement she need pay only 5% "The difference," said a grateful Viennese, "is the difference between solvency and open bankruptcy."

Banker Albert Henry Wiggin went to ground somewhere in Germany where he has been working for the past month, and successfully avoided all efforts of news hawks to locate him. A decision on payment of Germany's private debts was momentarily expected. As for Reparations the choice seemed to be postponement with Bruning or postponement with Mussolini. At the last minute France carried the postponement idea one step further. Premier Laval issued a statement begging postponement of the entire Lausanne Conference: "The opinion is be coming more and more general that it is impossible to arrive now at a detailed and definite solution of the problems of Reparations and War debts."

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