Events of past week have given a confusing political color to the problem of the war debts. Most immediately the American government's concern in whether to grant or deny another moratorium on the payments due December 15. A denial may send sterling to a new low and further injure world trade. In justice to Great Britain, and to be on the safe side of our own interests, a moratorium would be desirable. In any case, the most important decisions lie beyond the ideas of March and outside the sphere of the single forthcoming payment.
It is most necessary that an immediate readjustment be made in the sums due to the United States. the world is on economic tenterhooks and will hang there helplessly till, among other things, the war debts have been settled. Economists without exception as a means to recovery. The first fact they recognize is that Europe is simply unable to pay in toto, that the United States, if she continues to dun to the limit, will get notices of default, repudiations and lasting animosity. Moanwhile, before those notices come in, she will be driven to the wall with the rest of the western world. If, for instance, the United States demands payment in full from Great Britain, the results may be prostration of the pound, further fall in world prices, further depression, all leading to a final complete stagnation of trade. Due to the fall in world prices, the sluggishness of trade everywhere, the difficulties of taxation, and the increased cost of American exchange in depreciated currencies, capacity to pay has become less in every nation.
The debt question is entangled with other economic problems. Reduction has been suggested in return for trade concessions, and this again raises the tariff dispute. A settlement should be reached before the World Economic Conference assembles. In contrast to Mr. Roosevelt's plan, President Hoover has suggested a War Debt Commission that may identical with American delegation to the Conference. Some such centrality of control seems to be the wisest way out. But wether these matters are settled whole or piecemeal, the most pressing decision had better be made soon.