Reaction to Hoover

"A gift from Heaven!" cried German Foreign Minister Dr. Julius Curtius when told last week that President Hoover proposed a year's postponement of War Debt and Reparations payments (see p. 7).

"We endorse with unqualified joy," continued Dr. Curtius, "the heroic gesture which President Hoover has made. . . . He has placed his finger on the crucial spot!"

President Hoover was 4,000 miles from Berlin last week. Germans lavished much of their joy and thanks on Ambassador Frederic Sackett who recently vacationed in Washington. Several German editors thought that Mr. Sackett's "graphic word-pictures of German misery" had conjured up in Mr. Hoover's brain the vision which made him act. To Ambassador Sackett at the U. S. Embassy hurried Dr. Curtius to cry: "The German Government accepts unconditionally. . . ."

If accepted by all important nations concerned (and Mr. Hoover made such acceptance his sine qua non), the President's plan will relieve the German treasury for a year of paying to:

France $200,000,000

Britain 86,000,000

Japan 4,000

Italy 45,000,000

U. S. 15,000,000

Belgium 24,000,000

Other Allies 30,000,000

Total $400,004,000

During fiscal 1932 (begins July 1), the U. S. Treasury would not collect War Debt payments from:

Britain $160,000,000

France 50,000,000

Italy 14,000,000

Belgium 8,000,000

Poland 7,000,000

Czechoslovakia 3,000,000

Other Allies 3,000,000

Total $245,000.000

Germany (on cost of U. S. Army of Occupation) 15,000.000

Total $260,000,000

French "Prudence." "I think," Dr. Curtius told Berlin reporters last week, "the time has come to say that our foreign policy of conciliation and of international cooperation is now fully justified. It took an iron nerve to hold out when on every side there was clamor for haste. We must not forget that, next to the United States, France makes the heaviest sacrifice. Everything possible will be done by Germany to make it easy for France to accept."

In France this optimistic assumption by Dr. Curtius that France would make her proposed sacrifice was met by Prime Minister Pierre Laval and every member of his Cabinet with silence. For them spoke the semi-official Journal des Debats: "Germany has never signed any agreement without the intention, sooner or later, of tearing it up. Is it thought at Washington that a triumph of political immorality is the last word in wisdom?

"In our opinion France cannot consent to suspension of the payment of reparations by Germany. First of all, we need them. Secondly, in accepting the American proposal in full we would deal a mortal blow to the Young Plan, which is founded on the existence of non-postponable payments which in all circumstances should be paid."

Sauerwein. Also a French Government spokespaper is Le Matin. On its editorial page this paper was politely hostile last week; but beneath the signature of famed Foreign News Editor Jules Sauerwein Le Matin went the limit.

"My admiration for Mr. Hoover's initiative," wrote M. Sauerwein -- sourly, "would be without reserve if he had confined himself to the proposal that the United States should sacrifice one year's War Debt payments without making this conditional upon the sacrifice of any reparations payments by Germany's other creditor nations."*

Should the French Government accept President Hoover's plan France would forego $200,000,000 in German Reparations payments and would be relieved of making Debt payments to the U. S. and Britain totaling $114,000.000. Thus the net "sacrifice" of France would be $86,000,000 for one year. Translate that into francs and you get the figure 445,600,000 francs!

This "staggering sacrifice"--for so in francs it appears to Frenchmen--will give the prudent, frugal, patriotic, Chamber of Deputies a maximum of pause.

J. Ramsay Pressure Putter. In Great Britain last week realists at once saw that to accomplish President Hoover's purpose--if it can be accomplished--extreme pressure will have to be brought on France--and on Italy which would sacrifice $8,000,000.

James Ramsay MacDonald admitted to correspondents that he is President Hoover's pressure-putter. "I am charged with the diplomatic side of the question." said he. "Negotiations may be necessary with certain powers." On July 17 Pressure-Putter MacDonald will go to Berlin, will return the pressure-putting call of German Chancellor Heinrich Bruening on Scot MacDonald at "Chequer." (TIME, June 15). Thus world public opinion will be mobilized against expected French opposition.

British public opinion last week was pro-Hoover. The sacrifice asked of the Empire is only $20,000,000, only 11%-of what Britain collects. France is asked to sacrifice nearly 50%, Italy 18%.

Englishmen, who know U. S. citizens better than Frenchmen, saw at once that President Hoover had taken a step from which the U. S. can perhaps be led into cancellation of War Debts--some years hence.

Jester G. B. Shaw proposed last week that Britain wangle the U. S. into "a suspension of from 50 to 100 years." But the "Ford of Britain," Sir Herbert Austin, maker of midget cars, was quite serious when he said, "President Hoover's step will bring the greatest credit to the United States, but a three-year suspension would be more effective."

This idea was already sprouting in the U. S. last week. Melvin ("Mel") Traylor. drawling Chicago First National Bank president and leading organizer of Europe's B. I. S. (Bank for International Settlements), said: "I believe the suspension should be longer." Echoed Banker"George M. Reynolds of Continental Illinois Bank & Trust: "We can afford to wait a year or two or even three if necessary."

Other Comments. The Japanese Government intimated that they will gladly sacrifice the $4,000 owed Japan by Germany next year in Reparations. "Japan," added her spokesman proudly, "has no War Debt to the United States."

Benito Mussolini cogitated the Hoover plan last week, kept the Italian press from anything more definite than enthusiastic but totally vague expressions.

Johann Schober, Austrian Foreign Minister: "A noble and important action."

David Lloyd George: "Had an all-round cancellation of debts taken place in 1922, when my Government proposed it. . . ."

Sir Josiah Stamp: "Mr. Hoover's offer is a good point for revival of American trade and therefore good for Britain. The results are important psychologically and will be felt immediately. . . ."

Premier Kolstad of Norway: ". . . Deserves the most earnest consideration."

Shanghai businessmen, oddly enough, were among the most excited rejoicers at what President Hoover proposed.* Shanghai bankers said that the Hoover postponement would raise the price of silver, help to raise China's pitifully sunk silver-standard currency. Their theory: postponing will ''improve world trade." In this improvement China will share. More trade with China will increase the demand for silver in which she deals. In Shanghai the price of silver upped suddenly, fantastically some 10%.

* This "Sauerwein plan" is exactly opposite to Mr. Hoover's purpose of assistance to Germany. What M. Sauerwein proposed was a sacrifice (by the U. S. exclusively) of what is owed in War Debts by France & Allies^leaving France & Allies free to collect their full toll of German Reparations. If the "Sauerwein plan" had not come from the leading French journalistic expert on foreign affairs it would have to be labeled "willfully preposterous."

* Stocks on practically every exchange in the world shot up last week at Mr. Hoover's words.

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