Daily Kennebec journal., 1921-12-17
Harding Wants
Power to Settle
Foreign Loan Issue
BY MARK SULLIVAN

mucn the amount as the present un-
satisfactory status of the ten billion
dollars OK principal and additional bill
lion and half of accrued interest
which several European governments
owe to the United States that gives
deep concern to business men, to econ
omists and to those officials of the
American government whose duties re-
quire them to give thought to the
country's business conditions. The
present status of these debts is that
of overdue notes. So long as they
remain in this shape they interfere
with the ability Of the debtor nations
to borrow money and in other ways
prevent those nations from balancing
their budgets. from putting their af-
fairs into business-like' shape. and
from becoming buyers and consumers
of our goods.
Some time ago one of the most SOL
vent and dependable of those govern
ments asked some American bankers
for loan OF ten million dollars with
which to buy American goods. The
bankers reply was that if they should
put ten million dollars to the credit
Of this European government i. would
be entirely open to the government of
the United States to send the sheriff
into the bank the next day anG make
an attachment on the entire amount
on account of the debt overdue to eur
government. OF course, our govern
ment would not be likely to do any
thing so unreasonable, but the episode
illustrates the contention of President
Harding, Secretary of the Treasury
Mellon and others that these debts
owned us by European governments
should not continue to run along in
definitely in the very unsatisfactory
shape of merely overdue notes.
Any business man with the faintest
experience will realize this point. 1t
is the desire of the Administration to
refund these debts, which means to
get the debtors to sign new notHs
payable at future dates, and to begin
the payment of interest regularly.
While this last sentence expresses
the purpose of the Administration in
the broadest and simplest form, it is
true that the actual working out of
it would involve many complexities
of policy and practice. These compi-
cations are governed by the differing
degrees of solvency of the debtor ma
tions. These differing degrees of col
lectibility of principal and interest
are fact which every official and
every business man recognizes. Ul-
timately the American public must
recognize it also.
Some Could Pay.Interest
Some of our debtor nations could
pay the three years accumulation of
past due interest Immediately, and !
some could not. Some of them could |
begin to pay as much as per cent. |
interest at once: some could begin |
to pay or 2 or / per cent. at once. !
Some could not pay any interest now, |
but might ultimately pay both prin
cipa1 and interest if given a very |
considerable extension of time. At |
least one of our debtors. Russia, is in
such a condition that we cannot for
the present do anything at all.
In some of the cases a private bus
mess man, finding himself in the po-
sition in which our Government is,
would undoubtedly make a compro-
mise and scale down the debt. Now
it is just for the authority to make
these adjustments in their discretion
that President Harding and Secretary
Mellon have asked Congress to pass
bill. Congress is reluctant to do this.
The request was made six months
ago. and the measure still hangs fire.
In justice to Congress it should be |
said that it's reluctance reflects the |
state of mind of it's constituents. !
am told that of the letters that come !
to Washington from voters on this |
subject, fully nine out Of ten say in
effect, Make them pay in full and |
on the dot
How utterly impossible that it, and |
how undesirable it would be if it |
were possible, is a thing the average |
voter does not understand. If the |
average voter were told, as l have
been told, the following story, he |
would probably think there would be |
something radically wrong about Ell |
ther the intelligence or the integrity |
of the American official concerned. |
An official Of one of our debtor ma
tions, either in earnert or as bluff. |
said to an American official: Every |
well, We'll pay you the entire sum at |
once and send the amount over here |
in gold" 1t was, as a famous COM !
cdian used. to say, "a good safe Of |
fer
The American official replied: For |
heavens sake, don't" Just why it |!
might be undesirable for America to |
receive several hundred million dol |
lars in gold is a matter involving |
such understanding of economics and |
finance and of the effect on our in |
ternational and domestic trade, that /
10 ordinary voter can be expected to |
comprehend it.
There are some competent persons |
whose sincere judgment is that the |
best thing to do, in the interest of i
ourselves and the rest of the world. |
would be a wholesale cancellation of |
these debts, especially if this cancel |
lation were made contingent on the |
debtors taking certain steps as re-
CARDS the relation to us and to each |
other.
This article does not aim to more |
than state the barest high spots of |
the situation. Further than what is |
stated here, there are psychological |
factors involved as regards our rela-
tions with other governments, such !
as can be handled satisfactorily only /
by giving some authority and dis.