Evening star. [volume] (Washington, D.C.) 1854-1972, 1919-12-10
]. s. TOILET ALLIES
DEFER PAYMENTS
OF DEBT INTEREST
Plan Does Not Contemplate
Cancellation of Any
War Debts.
BY DAVID LAWRENCE.

| The United States government has
agreed to permit her allies in the
European war to defer payment for
| three years of the interest on the nine
billions of dollars loaned them dur
ing the war. While ostensibIy the
reason is the chaotic condition of for
eign exchange at this moment when
English pound and a French franc
are depreciating in value, the truth is
our government has taken note of the
, probabilities of the situation and sees
that it would be follow to insist that
the allies raise $450,0OO.00O in gold
at time when Europe is in the most
desperate financial condition in her
history.
Not only would Europe have consid-
cradle difficulty in finding that much
gold, but she would so strain her re-
sources as to break the back of her
financial structure and be unable to
pay for goods from America. of which
United States has adopted the policy
of deferring interest payments as
much out of a measure of self-preS-
ervation and financial precaution
based on American interests as altru-
ism.
COntemplates POstponement.
Briefly. the plan which is being
worked out in London and Washing
ton through conferences between rep
resentatives of the Treasury and for
elgn governments contemplateS a
postponement for three years of the
payment of interest.
But that doesn't mean Europe is to
be permitted to cancel any of her war
debt to the United States or any por-
ton of the interest When the three
years have elapsed, Europe will be
required under the terms of an in
ternational agreement now being
, drawn to pay not only the $4,000 O.-
coo due for the year 1923, for ex-
! ample, but a portion of the back in
| terest due for the years 1920, 1921
and 1922. as well as a portion for a
sinking fund on the main principal
During a period yet to be specified
Europe will be obliged to catch up on
the back interest which will have
been deferred in the next three years.
But those three years of grace are ex
pected to enable Europe to get on her
feet and start production going.
1t is not to be denied that last
nights reports of the drop in the
English pound sterling from pre-
war level of S4.S7 to $3.50, and the de-
crease in the value of the franc from
SIS for a dollar to IL francs for an
American dollar, and the correspond
ing depreciation of the Italian lire
from parity with francs before the
" al ~ IL III lol al american uOll3 r
caused considerable comment in
Treasury circles here
The fact that German marks are
selling at q cents today against a
pre- war quotation of % cents is per
fectly well understood because of the
unsettled condition of Germany TODAY
and her immense debt to the allies in
the form of reparation for damage
done during the war.
Allies Painfully GRAINED.
The Treasury experts are inclined
clple may be applied in trying to an.
alyze the drop in English pound ster-
ling and French francs They he
lieve that while the allies are much
better off than Germany, nevertheless
their immense debts to the limited
States. for example. and their own
shortage of commodities, which re-
quires them to pay high prices abroad
to get necessities of life, are crampIng
them painfully. Moreover. Treasury
officials believe that the people of Eu-
rope are psychologically apprehensive
They do not know where all the pres
ent unrest will wind up.
They are fearful of the worst They
see no political stability anywhere.
They see the United States delaying
action on the peace treaty They
wonder if there is something wrong
with the treaty or with the United
States. Anyway, they are confused.
many hesitant to sign the protocol and
the allies threatening military meas
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