New-York tribune., 1921-11-29
Urges Ill Billions Allies
Owe Be Left Abroad to
Rebuild Commerce; /; In-
sists We Must Not Cancel
Calls Settlement
Plan Grand Gesture
Cannot
Be Paid Without Col
lapse and Ruin, He Saws

Frank A. Vanderlip, at n dinner of
'ne economic Club at the Hotel Astor
last night, outlined new method Of
settling the debts of the Allied nations
to this country. He based his supges-
lions on a five-months' study of the
financial and industrial conditions in
Western Europe, from which he re-
turned few days ago.
This study, he says, has convinced
MN that Germany is physically unable
TO pay her great war debt, and that if
one terms OF it are not modified she
VIII collapse, dragging down other ma
tons of Europe with her.
The financier proposes first that the
united States repulsc any suggestion
on the part of the Allies for the cam
collation. of their obligations. The
government should insist that the Al
lled debt to us of S11,O000OO 900 is a
just debt, legally and morally. md
whether it can be paid or not
1T should be frankly acknowledged as
Just debt. He points out, however, that
Its payment In gold is generally recog
nlzed as impossible. and. likewise that
ITS payment in goods would be
disastrous to the industrial life of both
the debtor and the creditor.
Use 1t to Restore Europc
AS way out of the difficulty Mr..
Vanderlip proposes that America make
a grand gesture in international rela-
tlonships; while demanding that the
payment be made, would have America
say that she is prepared for the pres
ent to forego the receipt of it,
Inc financler then suggests that re-
volving funds be established among the
debtor nations, and that the money be
devoted to the rehabilitation of Euro
pean civilization under certain meas
ure Of direction by our government.
ne suggests gigantic program for
the development of eastern Europe, re-
ferrlng particularly to educational. eco
nomc ard welfare projects and assist
ancc in re-establishing old commercial
relationships. While some part of this
money would necessarily have to be
spent without hope Of return, the major
portion Of it, he believed, will so en-
able the impoverished nations to get
back to economic stability as to assure
the eventual payment Of their debts to
Vne O1lCed States.
Georgc w. Wic'-ersham, president of
the club, pcs dcd. About 400 men,
bers and guests were present
U. $. Expected Repayment
After pointing out that the great
war increased the internal debts of the
European belligerents from $4,000, ,000,-
600 to S155 1000, 100000; that the ex-
ternal debts of these countries are now
S11 900 100000 was owing to the United
States, Mr. Vanderlip said in part:
"When the United States government
loaned these sums Of money to the
Allies our government expected repay
ment At the time the loans were
made there was never suggestion
that they should be regarded as part of
our contribution to Americas war
effort.
with the close of the war there be-
gan to arise in Europe confusion of
thought and irresoution of purpose in
regard to the repayment of these loans.
Their total had become so huge, the
debtors had become so impoverished
that the weight of the burden seemed
in the eyes of Europeans to be in
tolerable, and, being intoerable, to be
unjust.
How Europe Argued
ain the minds Of our European
debtors the argument ran in this way:
We had all, Allies and associates alike,
been engaged in common purpose.
1t was as important to America as it
was to the Allies that the war be won.
Rightly or wrongly. America had come
into active participation only toward
the end of the struggle. No matter
+; how essential American help may have
been, it was their feeling that America
performed in the field no great military
feat before hostilities ended.
"With such considerations in mind
it was easy for debtors to argue that
as America had emerged from the war
the one really solvent nation it would
be not only matter Of good sense on
! the part of rich creditor, but as we'll
matter of sound justice, if we should
cancel the obligations of the Allies so
far as these obligations are measured
by financial Indebtedness tc us. That
opinion has come to be held generally
in Europe.
Great Britain takes somewhat diff
ferent attitude. There are owed her
by other nations sum exactly equal
to the amounts she owes the United
Continued on paBs threat