The New York herald. [volume] (New York, N.Y.) 1920-1924, 1921-02-20
BY FRANK Fl. SIMONDS.


w como over the whole face Of the
discussion of American relations
with Europe n change which is almost
complete. Debate over the League OF
Nations has well nigh terminated. The
questions as to Article y. and the RESPONSE
Utilities the United States would have to
undertake toward European nations if the
league were even now accepted has been adj
journed indefinitely. At Washington. at
least, the verdict of the last election Is taken
is indicative Of the determination OF the
great majority of the American people TO
have nothing TO do with the political ques-
tons of the peoples dwelling on the European
continent.
Yet the cessation OF the discussion OF the
Treaty Of Versailles and the League Of Ma
tons has not brought corresponding close
Of the argument over the relation OF the
United States TO Europe. On the contrary,
the fact is daily becoming clearer that It is
not by political, but by financial, chains that
we are actually bound to Europe and that 1t
Is not European but American financial and
political conditions which are Immediately
affected by the existing situation.
To put the thing quite simply, Congress Is
home market, with problems Of unemploy-
ment and OF paralysis in the agrarian dls-
tricts due TO the practical closing of our
European markets, not because there Is not
demand for our supply, but because thereis
lacking credit or money with which the tor-
eign purchaser might pay for our avaiiaple
surplus In grain, in cotton, In manufactured
articles.
And slowly the fact is dawning upon the
M
a temporary situation, but condition likely
TO endure for an indefinite period and To
constitute the supreme problem OF the IN
coming Republican Administration
What course will Mr.. Harding take toward
europe?
This is henceforth the great puzzle. WIZ
he seek to keep Europe out of our markets
thus protecting our producers, but as re-
suit excluding US from European markets.
or will he risk producing paralysis in our
markets by opening them 10 Europe?
The Situation in Simple Terms
Shows $4,000, 900 900 Debt to U. 5.
The situation is complex, but not beyond
simple statement Europe owes us Sll,ooo'-
600. 900. representing the principal and In
terest OF our loans in the world war. Eu-
rope owes us in addition S4OOO,OOO,OOO, rep
resenting private credits advanced since the
European Indebtedness is to-day above
SIS. O00, 900 900. This Indebtedness at five
per cent interest rate would represent an
nual payment of $3.50 O00, 900. But add to
Il a contribution of say an equal sum
toward the principal to eXtinSuish the debt
and IL means that we have to exact from
Europe an annual payment of $1,000
900 900.
Europe can only pay in goods. ENcept
Al.
tres have exhausted their holdings OF
American securities They cannot pay US
now in service, that is, through ocean car
ringe. save as that payment reduces the
earnings Of our newly created merchant
marine. They cannot pay us in raw ma
terials, because there are only very few
raw materials which we lack, coffee rub
Ter, potash and silk chiefly. and all of these
represent q relatively Insignificant total.
Moreover these would not exceed the
amount which Europe would pay us to meet
IL continuing exports on our part of raw
materials required in Europe.
The problem of the Harding Admnistra-
ton is patent With respect of the foreign
loans three courses have been discussed;
namely % fun payment, the payment to
hegin relatively promptly. that means the
Of the stream of European
exports which must henceforth flow
toward us n ever increasing NoluIIlcf W
of the loans, which means inn
posing upon the American taxpayer burden
II $1,000. 900, 900; 90 postponement of the
demand for all payments, but the retention
If the claim as a political asset, enabling us
to exert influence In European affairs.
IL will be seen, however, that this last
course. temporary suspension of payments
hy Europe has the same penalty for the
American taxpayer as the cancellation
during the period of suspension. 1t will he
seen, further. that II carries with II ire
mendous peril for American interests, since
IL opens the way to enormous intermixture
in European affairs. / shall discuss this
point further in a moment.
Suppose that the United States, through
he new Administration insists that Eu-
rope proceed TO the payment Of the debt.
This is our right. Moreover l fancy that
the mass Of the American taxpayers would
instantly denounce any statesman or 1arty
which proposed any other course. But the
mass of the American people do not yet
perceive that the debt cannot be paid In
money for there does not exist gold enough
to pay il. and Of the sum Of gold existing
in the world, We have already acquired the
larger part
How the Debt Could Be Handled
And How Germany Comes In
-.