"Make Thy Loins Strong"

Often dollar-hostile, the newsorgans of Baron Beaverbrook veered around like weathercocks last week to crow the praises of dollars in general and of newly-arrived Ambassador Andrew William Mellon, dollar Croesus.

"French banks have advised against the dollar and French newspapers have attacked it,* recalled the Beaverbrook Evening Standard as his new friendliness flowered, "but American business character today is strong and good. . . . We say, therefore ... to the American people ... in the words of the prophet, Nahum, 'Keep the munition, watch the way, make thy loins strong, fortify thy power mightily.' And we say too: 'May God's blessing go with you.' "

Not merely blessings but hints were showered upon Ambassador Mellon's hoary head all week, for England hoped that somehow he would influence President Hoover to attempt cancellation of Reparations and War Debts at once. At the welcoming dinner of The Pilgrims, Edward of Wales put the nation's hope thus: "I cannot help feeling that the presence of Mr. Mellon in London can be of the greatest assistance ... for the advice he can give America of European conditions."

Sir John Simon, British Foreign Secretary, who had flown expressly to the banquet from Geneva (300 mi.), stressed Anglo-U. S. amity. "It is our firm resolve to cultivate this happy relationship," cried Sir John, "and to use it for the benefit of the whole world."

Ambassador Mellon, eschewing champagne, had been sipping all through dinner a rare and red French vintage. While he slowly sipped, an iced Statue of Liberty directly in front of him slowly grew soggy, squelched down and had to be carried out. The noble chairman, the Earl of Derby, jocularly observed that this proved the warmth of Mr. Mellon's welcome. Rising to speak at last, Mr. Mellon twirled his glass, recalled that things which twirl too rapidly burst of centrifugal (out-thrusting) force.

"Together the United States and Great Britain," he declared, "represent a great centripetal [in-thrusting] force in a world which tends to fly apart. We must leave nothing undone to strengthen that force."

Weasel Mellon. If to most Englishmen Ambassador Mellon's words sounded vague and cheerless, a famed Welshman did not hesitate to-attack him openly. In a new book published last week, Mr. David Lloyd George called him a weasel, thus:/-

"A few weeks after ... I vacated the office of Prime Minister . . . Mr. Bonar Law, who succeeded me, sent Mr. Stanley Baldwin and Mr. Montagu Norman to the United States in January 1923 to open negotiations for the funding of the British debt.

"... No worse team could have been chosen. Mr. Montagu Norman [today Governor of the Bank of England], is the high priest of the golden calf [i. e. the Gold Standard] and his main preoccupation was to keep his idol burnished and supreme in the pantheon of commerce. In his honest view it was the only god to lead the nation out of the wilderness. Such a person was a dangerous counsellor for a man of Mr. Baldwin's equipment.

"As to the two leading negotiators, Mr. Mellon and Mr. Baldwin, Mr. Mellon was keen, experienced, hard, ruthless; Mr. Baldwin, casual, soft, easygoing, and at that time quite raw. Mr. Baldwin [today leader of the largest British party, Conservative] admits that since then he has learnt a great deal. At that time he merited his constant boast that he was only a 'simple countryman.' A business transaction at that date between Mr. Mellon and Mr. Baldwin was in the nature of a negotiation between a weasel and its quarry. . . .

"This settlement which Mr. Baldwin so hastily concluded staggered Europe. It amazed the business community of America. It was so unexpected. The [U. S.] Treasury officials were not exactly bluffing, but they put forward their full demand as a start in the conversations, and to their surprise Mr. Baldwin said he thought the terms were fair, and accepted them. If all business was as easy as that there would be no joy in its pursuit. But this crude job, jocularly called a 'settlement,' was to have a disastrous effect upon the whole further course of negotiations on international War-debts. The United States could not easily let off other countries with more favorable terms than she had exacted from us, and as a consequence the settlement of their American debts by our European Allies hung fire for years, provoking continual friction and bitterness. Equally the exorbitant figure we had promised to pay raised by so much the amounts which under the policy of the Balfour Note we were compelled to demand from our own debtors. Not alone Britain, but all Europe, has suffered ever since from Mr. Baldwin's vicarious generosity."

Solution? Mr. Baldwin's sin and Mr. Mellon's (as Mr. Lloyd George sees it) was to sign a paper in 1923 wherein Great Britain pledged herself to pay a great deal of what she owes. Last week all Europe saw a new hope emerge from a strange new source--the brown derby of New York's Al Smith.

Speaking in Washington, Mr. Smith not only disrupted Democratic politics but made the only new proposal for dealing with Reparations and War Debts made by a public man this year. Proposed Citizen Smith of New York:

"Let us say to the nations of Europe who owe us money that we will forget all about it for 20 years, and not only will we do that, but we will write off as paid each year 25% of the gross value of American products which they buy from us. . .."

Promptly Germania, organ of German Chancellor Heinrich Briining, backed the Smith scheme. So did the leading French economist, M. Claude Joseph Gignoux, recently President of the Council of National Economy.

"There is no question that M. Smith's scheme would greatly stimulate American exports," said Economist Gignoux, "and there is no doubt in my mind that France would study sympathetically any such proposal if it came from the United States .Government."

*But last week Le Temps, leading Paris daily, devoted two columns of its special financial supplement to bullish comment on the U. S. Excerpts:

"If things go normally, the U. S. budgetary deficit will be met, or at least considerably Deduced by new fiscal resources and economies. The bonus proposition will be sidetracked. There will be no inflation in the proper sense of the term. The currency will remain solid. The United States will enter a period of new credits with the likelihood of an economic prosperity less brilliant than before the crisis, but more real and more solid."

/-THE TRUTH ABOUT REPARATIONS AND WAR-DEBTS--David Lloyd George--Doubleday, Doran ($1.50).

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