Capital Comment

Washington—Swift-moving war clouds of Europe are beginning to settle over the Saar Valley where a plebiscite will be held in January to determine whether that rich province desires to be united with France, or with Germany, or whether it desires to continue its present status under the government of the League of Nations.

And while this mist is complicating international affairs, diplomatic circles are making a keen effort to keep posted on latest developments. Washington observers are of the opinion that the great majority of Saar inhabitants will vote for a union with Germany in spite of the fact that many in the Saar district are not in sympathy with Hitler or his policies. These people are Germans, and as such they want to be an integral part of the Reich, in spite of Hitler.

The main trouble in the Saar area is expected to come at the time the district is reunited with Germany. Economic difficulties involved in such a transfer were apparently overlooked by the makers of the Versailles Treaty.

This treaty provides that, should the Saar population vote in favor of Germany, the German government will have to pay cash for the important coal mines which the French government took over as compensation for the French mines destroyed by the German armies during the World War.

Hundreds of millions of dollars will be required by Germany to meet this obligation. When the treaty of Versailles was drafted, no one seemed to have given consideration to the possibility that Germany might not have the money. And that day has come. Germany’s financial condition is critical.

In the event the plebiscite in January favors the Reich, it is only natural to expect that France will demand that Germany comply with the terms of the treaty of Versailles. In view of Germany’s treatment of international and private obligations already past due, it is logical to expect that the obligation to France will receive the same treatment. Germany will confess her inability to pay. France will be in a rage. And European and American diplomats will have some sleepless nights until something happens.

“Once a reporter—always a reporter.” This phrase once more rings true. In the current issue of the American Foreign Service Journal, published in the State Department, Leo R. Sack, Minister to Costa Rica, returns to his role as a scribe to report what he has seen.

The article is a graphic description of Costa Rica and is accompanied by a snapshot of the writer, showing him at the crater of the Costa Rican volcano Irazu, which towers to a height of 11,322 feet, on the outskirts of the ancient capital of Cartago.

Mr. Sack, a former Washington newspaperman, is quite generous in his praise for the Costa Rican scenery. He points out that Irazu has been in constant eruption for the last twenty-four years, and predicts that when the proposed inter-American highway is completed, it will be one of the show places and tourist meccas of Central America.

One of the outspoken critics of New Deal monetary policies is James P. Warburg, vice-chairman of the Bank of Manhattan Company of New York. He freely admits that the banking system must undergo some reforms, but lays stress on the fact that it is up to the bankers themselves to recognize the need for changes and act accordingly. He is opposed to government banking.

This young New Deal critic was a former Treasury brain truster. He retired from the New Deal to fight inflation. He favors social insurance and “fair and reasonable” government regulation of business, but believes that Uncle Sam should think twice before going too far into the sphere of private business.

During the past year Warburg has published three books dealing with national affairs. His last book, “It’s Up to Us,” just came off the press.

It may or may not be significant, but it was interesting to notice a new magazine, the American-German Review, which made its appearance this week.