Evening journal., 1921-12-21
McAnoo WRONG. AS usuAL

ONlER Secretary OF the Treasury McAdoo has written
letter to Senator Carter Glass expressing some OF
his views the foreign debt.
Among other things Mr. McAdoo asserts that the United
States can place its hope for payment solely the good
faith Of the debtor nations and II they refuse To pay
only force, unless consent to the default
That being the case according to Mr. MoAdoo, he sees
no advantage in security" in longtime short-time
obligations
For that reason he takes Issue with those who com
plain that the foreign demand obligations accepted by
himself as Secretary OF the Treasury not strictly in
accordance with the terms the acts that authorized the
foreign loans and were deficient in security.
1t probably is true as the people Delaware realized
long ago. that the United States must rely on the good
faith Of foreign debtors collector its debts but every
thing ought to done that will decrease The possibility
OF the debtor countries repudating their obligations and
that viii add to the that the principals and in
teresi OF the debts will eventually be paid in full.
For instance the nrst sentence OF the certificates Of in
debiedness now held the Treasury reads as follows
.The government Of name OF foreign govenmenD for
value received promises 10 pay To the United States OF
America or assigns the OF number OF dollars in
words on demand, with interest from the date hereof at
the rate lrate per cent? per cent. per snnum."
That obligation really very little, because it
would be manlfesty impossible for many Of the debtor
nations to pay their obligations II demand 10 be
suddenly made upon them.
Were such a demand TO be made by the United States
without reasonable time limit. there would be immedi-
ate reputation.
Under such circumstances demand note is practically
worthless and It win be the nrst duty OF the debt
funding commission TO to it that those demand obli
cations converted into other evidences Of indebted
ness with definite maturity dates.
Mr. McAdoo to the contrary Notwithstanding such a
ong-tcrm bond has FAR greater value than demand
note that cannot possibly be met
Furthermore. the good will Of debtor nations can be
enhanced materially by the -erms OF payment written
into the longtime bonds and the probability OF their ult
mate payment substantially increased thereby; that is,
the security behind them he increased many fold
OF The refunding commission will be fully alive
to that fact and will grant such the debtor
may properly be allowed without damage ia
our own interests.
Most Deawarcans will agree, think, that Mr.. Nc
Adoo is as FAR from the mark in his comments th'
foreign debt as ne other economic problems oi
which he expresses opinion.
He ought to know that matter OF practical bust
ness there are two kinds OF security tangible and in
tangible That behind our foreign debts is Of the latte
variety.
The value assigned TO Il may 1uctuate widely accord
ing to the manner in which the whole subject handle
by our government But Mr.. MoAdoo and every othe
citizen may rest assured after the deft reundn
commission completes its abors the eventful payment
those obligations will be almost certainty