Evening star., 1919-09-20

ducing power of the four principal Euro
pean allies are ample to enable them not
only to meet all war obligations. but re-
| gain their normal position in the world
! business as WELL is brought forth in the
illustrated booklet, The Solvency OF
| the Allies" a comprehensive survey OF
European financial conditions just pub
f., ,Iished by the Guaranty Trust Company
! of New York.
| The booklet presents an impartial
! ANALYSIS of the war debts-internal and
external-of Great Britain, France, Bel
gium and Italy; an especially vital sub
ject in this country. since our own gov
ernment is the largest creditor OF the
allies. =
! In introduction, the booklet says. in
| part:
THE larger portion of the war debt
of the allies is internal. The apliity 'o
meet an internal debt is purely nSca
problem, because there are no adoi-
| tions or subtractions to the natlona
wealth and the payment of interest Oh
the debt implies the taxation OF the peo-
pie as a whole, interest being paid &c
present holders of the bonds, whict
| affects only partial redistribution OF
the national wealth.
! THE problem of meeting external
debts is of vital significance to the ma :
! tional wealth of the country. 1t means
the actual shipping out of products. and
does not add to the wealth of the coun-
, try However, during the period OF wal
finance the creation of an external debt
| is of material benefit, because 1t in
| creases the power of warning nation
| to obtain supplies of materials produced
by other peoples, thereby adding to its
war-making power. This is burden
rightly to be borne by future genera
tons.
Great Britain's Position.
| Great Britain's expenditures growing
directly and indirectly out of the wal
greatly exceed those of any other allied
nation. Eighty-two per cent OF the deot
! thus accumulated is internal, and in
wolves no transfer of wealth to other
| countries.
OF the external debt the booklet says
| The interest and amortization OF
| the other IS per cent of the oeot
which is owed abroad. will amount to
approximately s36O.00O.000. AS an
, Offset, the interest due Great Britain
/ on advances made to allies and do
minions amounts approximately to Ia
| times the total interest on the eX-
ternai debt. Payments, in the main
will have to be made in the form OF
| commodities or service, which. in in
| IeTna tlOndl lTdue dCcOuHlS. CoHlI iDute
| to the credit or export side of the
ledger. To what extent England
export trade will be stimulated by
| this situation is problematic. Fol-
many years the United Kingdom has
i imported more goods than it has eX-
ported. but this so-called unfavorablt
| balance of trade has been offset by in
lternational payments which do not en-
ter into the reports of foreign trade
Foreign Investments a Factor.
ancing items in the case of Britain
have been the returns from invest
ments abroad and the receipts of Brit
ish-owned ocean carriers.
1T is estimated that British foreign
! investments before the war amounted
to $19.464. 900, and that they now
approximate $14,50O 100000. Broadly
eign investments that may be relied
| upon in balancing the internationa
| account have been reduced by abou,
one-fourth during the war. Neverthe-
| less, the remaining foreign invest
ments exceed the external debt by
about $4,000. 100000 and the yield from
these investments at normal rates
| would not only pay the interest or
that debt. but also leave a large mar
gin to England's credit
AS an offset to England's loss OF
| man-power in the war, the booklet
| cites the manifold improvements in
| the industrial organization of the
| country during the war. particularly
| in the manufacturing industry. where
o1d-fashioned machinery and ideas
have been replaced by foolprool
products and processes has also made
tools capable of manipulation by un-
skilled labor. Standa rdiZation OF
the loss of manpower in industry
less keenly felt.
Much depends upon the spirit and
| temper of a people. Their record OF
achievements in industry and finance
| has amply demonstrated the capacity
of the English for doing big things
| in a big way, and for meeting emer-
gencies with the requisite energy and
ability. In view of the advantages
| accruing from a century of progress
in the realms of industry and finance
| it may be expected that Great Britain
| will again recover from the effects OF
war no less quickly than it did a cen.
tury ago"
France Will Recover.
France. though heavily burdened b,
the internal debt contracted during
| the war, will be able to carry her ex-
| ternal debt with no great difficulty
| il is predicted.
"Of the total debt. about s5,7S5,-
| 100000 is external. AS offsets to the
| external debt, there are French in
| vestments abroad estimated at $S,100.-
900. 900. The peace budget of France
| will require approximately 16.000, 900,
900 or 1900. 100000 francs, which is
three times the budget of 1914. The
! service of the debt. which il is eSti-
mated will be 200. 900 O00. 900 francs in
1920 is placed at 10 ZOO. 900 900 francs