National Affairs: Amendment by Rage

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Tom, Dick & Harry. First witness was Thomas William Lament of the House of Morgan. His smiling courtesy, his unruffled frankness, his quiet manners charmed and disarmed hostile Senators. In great detail he explained how his house —merchants, not bankers—had issued $1,807,578 worth of foreign securities since 1920, how each loan had been distributed through syndicates, how the profits ("spread") had always been kept reasonable. He denied that the House of Morgan had "coerced" any firm to buy its bonds, that U. S. banks were "loaded up" with these foreign securities.

"In other words, Tom, Dick & Harry have taken the loss on these foreign bonds, not the bank?" asked blind Senator Gore.

"It is a very deplorable thing," replied Mr. Lament quietly, "but it is the great investing public upon which these declines in every kind of bond have chiefly fallen, rather than on the banks."

Yolk. Next witness was Charles Edwin Mitchell of National City Bank of New York whose company had handled $1,071,955,000 worth of foreign loans in the last decade. Aggressively Mr. Mitchell argued that these advances were good and useful because they stimulated U. S. foreign trade. German economy, he declared, was "the goose that is laying the golden egg." Asked Senator Gore: "Yes, but who gets the yellow of that egg?"

Declared Banker Mitchell: "The holdings of foreign securities in New York banks are in no case enough to influence their determination in regard to debt cancellation one iota. . . . I don't believe in cancellation as it is generally spoken of. I'm inclined to believe that, here and there, it will be determined that there should be some scaling. Very often as a banker we take a credit we could force the full payment of but get more out of by some other course."

Yoke. A revolt by the younger generation of Germany against Reparations was predicted by Banker Mitchell. Senators sat at taut attention when he said: "These young people see that not only they but their progeny and their progeny's progeny must go on paying a debt for which they were not responsible. They feel they are under a heavy yoke and they are growing rebellious. It is something that is readily understandable. . . . I'm not preaching any doctrine of cancellation but I'm trying to develop some of the psychology of the people that may have a direct bearing on this question."

But Mr. Mitchell was unable to answer Senator Reed's question as to why "the progeny of Americans who had nothing to do with the World War should bear the burden while the progeny of other nations go scot free."

The Senate Finance Committee returned from this tangent for ten minutes in which time it favorably reported out the Moratorium resolution. Republican leaders hoped to give President Hoover a Christmas present by whipping the measure through the Senate before this week's holiday recess.