The Washington herald., 1921-07-17

sum which Europe owes US and as
far as one can see the process is
likely to continue almost indehn-
itely.
IL is difficult to bring the situa-
tion home to the man In the street
because he simplifies the discussion
and thus misses the fact. He thinks
OF Europe's debt to US, as he thinks
OF a neighbor's debt to him. He
thinks in terms of money and
marches straight to the point that
II the debt is not paid by Europe.
II must be paid by America.
Grows More PUSHED.
Yet the truth all lies in the simple
fact that international debts can
only be discharged in service or
goods, when they reach totals which
vastly exceed, even In annual in
terest charges. the sum total of the
gold supply OF any country In the
world. And since the United States
possesses or manufactures sub
stantially all OF the commodities
Europe could furnish, to take pay
ment in goods will mean to throw
the American workman out OF a
job. just as to take payment in
service would similarly paralyze the
American merchant marine, which
has trouble enough, as II is.
Moreover, the thing complicates
itself. France and Italy can af-
ford to take German coal, because
they lack sufficient quantities
themselves, but the effect of sub
stituting German for British coal
in France and to a lesser extent
in Italy Is to throw British coal
miners out of work. necessitate a
reduction in wages and, in the end.
precipitate the coal strike itself.
with all its incidental dislocation
of British industrial life As for
Britain. 1t perceives that the Ger
man, compelled to pay his debts in
goods, will end by achieving a ma
tional organization which will not
only enable him to pay the debt in
goods, in large measure at the ex-
pense OF British goods, but also re-
tain the markets and the organiza-
tion, when at last the debt Is paid.
Free Trade Msy Come.
Today our situation with respect
of the European debts is much like
that of a man who possesses a vas,
gold deposit under a huge noun
tain. His title is beyond question.
Ndluc Ol the ucpOSlI Is hol
debatable. but as IL stands, the cost
OF extracting the gold is prohibi-
tive. And Europe Is measureably
in the same situation with respect
of Germany, save as far as coal Is
concerned. True Europe might take
German goods and resell them to US
rs France took German coal and
resold 1t to Britain. but this could
be only at our expense, in the long
run.
1t is true that an alternative has
been frequently suggested, namely
that we transform our own indus
trial plant. that we find these lines
OF production in which we have
natural advantages of unassailable
character and specialize there; for
the rest. buying where we can in
the cheapest market. Conceivably
this adaptation of British free trade
principles may come. But at the
very least, II would insure a period
OF reorganization and of dislocation.
the extent of which is beyond
prophecy.
Objects to Prompt Payment.
To sum up. the reopening of the
discussion of European indebted
fact that little or no progress has
yet been made toward finding
method by which we can absorb the
payments, which are our Just due.
payments which we have every right
to insist upon, payments which
Europe can make. but can only
make in such fashion as to do grave
injury to US, industrially. IL we ac-
cept them
The whole question turns on the
way in which to take the payment.
In the first place we didn't send
money across the seas. but goods,
the money stayed here and the goods
are now represented by the Euro
pean Indebtedness. Europe can pay
us back in the same way, by goods.
But we can absorb only n fixed
amount annually. II we accept most
of this amount from Europe. then
our factories or our mines must
stand idle or seek some other form
of production. which may or NAV
not exist. If the factories and
mines stand idle. then we have un-
employment. hard times, bad busi-
ness.
Brings in Our .surpius.,
Meantime Europe can afford to
buy only limited amounts of on.
productions. mainly raw materials
and foodstuffs, far less in fact than
our surplus. To get rid of more,
we have to go back to the old pro-
cess and ask new loans, represent
ed by the value of our raw materials
over and above what Europe would
take otherwise. So we increase OUR
loans and add to the future difficuI-
ty of liquidation. But il we refuse
to extend those credits. then our
surplus production remains unso;d
and we have such hard times as
have been experienced in the West
and South during the past year.
Meantime everyone talks about
making Europe pay" when the
real question. long ago became one
of how to let Europe pay.
Copyright 1871
Exams for nonfoI E~o-: