The notification of the State Department yesterday by Dr. Hans Luther that the German Government is planning to abrogate the existing trade treaty between his country and this serves to emphasize again the precarious nature of the commercial relations between the Third Reich, the United States, and incidentally Germany's other creditors. Intimately connected with this decision is the determination of Germany to continue its policy of discrimination against unlucky American holders of German securities. Though the rest of the world is to receive the stipulated interest payments on Dawes Plan bonds in full, Americans are to receive but seventy-five percent for their faith.

The reason, nevertheless, is economic, not political, and viewed impartially the situation furnishes, in its own way, an example of somewhat poetic justice. Furthermore it has the merit of being illustrated in such a form that even a Rotarian can grasp its significance. Whether Germany can afford to pay the million or so additional dollars which payment of 100 pfennigs on the mark would mean is beside the point, nor will aspersions on the integrity of the German Government or aides memoires suffice to raise the ante. The important thing is that while Germany undoubtedly has both the gold and dollar exchange necessary to effect a complete transfer of interest payments now, she most certainly has not enough of either to meet her short and long term capital obligations as these fall due in the future. The present partial default on interest payments in merely a symptom of the folly of an impossible tariff and its incompatibility with payment-in-full to creditors in Wichita and Kalamazoo, especially when its ill-effects are aggravated by inflation.

Whether palatable or not for native consumption, it is none the less true that one cannot enjoy the luxury of high tariffs and inflation at home without occasionally experiencing the backwash from their reverberations abroad. Though other countries may squirm under the humiliation of importations from abroad, they at least are in a position to collect when the day of reckoning comes around.