Perth Amboy evening news., 1920-07-01
Difficulty About
Collecting Debt

Copyright, 1920. by me washington
Star


WASHINGTON, July 1.-Can the
United states AFFORD to collect its
debts?
The question Of absorbing the ten
billions of dollars plus interest that
the European allies owe this coun-
try Is giving hnanciers in and out
Of the government service grave con-
Germ, while the debtor nations are
watching Developments with an even
greater interest, and the great game
OF International finance is being play
ed with a subtelty never before equal
led.
For months press reports from Eu-
rope have carried statements that
this plan or hat would be put for
ward by the debtor nations to pro-
tvide for liquidation Of their obliga-
tons, but so far not one such pro-
posal has been made through off,
cial channels, and there is a feel
ing in this country thnt many Of the
stories from abroad are inspired, and
that Europe Is feeling out" Amer
lea on the question of the war debt.
The United States is creditor to
the extent of something more than
SIC, 000, 000, 900. II these payments
are made owe a period of twenty
years or more, the total amount with
~ . wal 0C AOb ACSc lAdil t&Vf-
600, 000, 900 more than 1t exports. If
this is done 1t will call for a care
full adjustment of trade balances to
keep from upsetting industry.
There are two ways in which this
excess might be absorbed, according
to one of the governments best inter-
national experts. One is for this
country to increase it's extravaganza
and consumption, and the other is
for the America investor to invest q.
corresponding amount in railroads,
mines. and other developments in
other parts of the world, in other
words to take the money coming
from Europe and reinvest it in for
eign enterprises.
However, if the United States got
into another war it would be a most
desirable thing to have a few bills
receivable, and there is small prob
ability of the Uaited States giving up
it's claim on any nation unless it gets
a "quid pro quo"
Sentiment probably will play a
large part In the final settlement of
the war obligations, and the people
Of this country will insist on England
meeting her obligations to this
try on time, it is thought, even if it
embarrasses us. For England is
looked on as the nation best able to
pay, and, like the United States, suf-
fered no invasion of territory dur
ing the war.
Many persons expect the question
of Europe's debt to America to be
taken up at the coming conference
at Brussels, but state department
officials are not so sure this will be
done. The Brussels conference will
be made W of representatives of
many nations, only a few of which
are in the debt of the United States.
Furthermore the secretary of the
treasury always held that the obli-
cations in question should be set
tied between individual nations and
not rs a group of nations. At the
peace conference there were many
plans put forth to include the set
Element of the war debt of Europe
in the treaty, but the United States
representatives always took the po-
sition that they were making a treaty
Of peace with Germany, and that
questions of payments between the
allies and this country should be set
tied in Washington.
Those who profess to fear that this
government will surrender some of
it's rights abroad, and that nothing
may be had in return for some of the
billions the people Of the United
States loaned abroad, should remem-
Der that the powers of the secretary
of the treasury in this matter are
limited. and that no rights can be
surrendered but by an act of con-
gress.
Under the law as now written the
secretary can enter into an agree
ment for the payment of Europe's
debt to us, provided hat the rate of
interest is not less than the cor
eminent borrowed the money from
its citizens in the form of Liberty
loans, and provided also that the final
payment is not later than the matu-
rity of the war bond issues.
Any plan that falls outside the
scope of those limitations must be
approved by congress before it can
bind this nation, and congress may
be expeced to proceed very cautious
iy in the matter.
A most persistent rumor has been
that the debtor nations would ask
that their payments to this country
be made contingent on the payment
to them of the indemnity which has
been laid on Germany; in other
words, that their payments to this
(OdLlA NOald COAlC O0L VI AAC
money collected from Germany, and
not from their own national EVE
nues. No such a proposition has
even been limited at officially, and
the United States would look with
favor on such a suggestion.
Officials in Washington point out
that the loans to the allies were
made before Germany was defeat
ed, and when there was no question
of an indemnity. Their ability to pay
might have some relation to their
ability to collect from Germany, but
their obligation to pay is binding re-
gardless of whether they ever get a
dollar from the central powers.
Interest payments OF the allied
debts to this country have been de-
ferred, pending an agreement as to
how the debts shall be paid finally,
but this is not altogether an altru-
istic move on the part of the United
States. Such payments at the pres
ent rate of exchange would be en-
ervating TO the nations best credi-
tors and still further would upset the
exchange market, to the embarass-
ment of the country's foreign trade.
The deferred payments have been
made in strict conformity with the
regulations imposed by congress in
the matter of the international
loans.
France and Italy would have much
difficulty in paying a considerable
part of their debts to US now, but
there is no question az TO their ulti-
mate solvency. France is prosper
Gus as a people. but her government
is still in a bad way. for it has not
levied heavy taxes. and is still run
ming into debt. But French inves-
tors hold some $4,000. 000,0 900 in for
efgn securities (which will ultimately