The Washington herald., 1921-07-17
ny FRANK N. sIMONDs.

retary of the Treasury, backed by
the President, for power to deal
with the foreign loans. that is for
authority to proceed to making ar
rangements for the liquidation of
that vast sum. which represents our
loans to our associates of the war
the whole subject has been reopened.
pnce more, too. we encounter i'm
hediately the clash between the
political and the financial views of
this difficult question.
y Secretary Melons figures pre-
sented to Congress disclose the fact
that Europe, our partners of the
war. owes US in government loans,
the stupendOus sum of $4,000, ,OOo,-
900 in capital and rather more than
$1,000, 600. 900 in unpaid interest. that
is {Il, 900, 100000 in all. For COM
parison we may at once set this
figure against the $4,000. 900 900
which Germany in the latest agree
meut made with her conquerors, has
undertaken to pay as a first and
fixed instalment upon her total OBJ
legation incurred by her conduct of
the war.
Steadily Piling Up.
Since the interest upon our loans
Is still piling UP. pending the ad-
justments still to be made by our
Treasury Department, which is seeS-
ing the authorization of Congress
to deal with the matter, il requires
little analysis to perceive that in all
human probability before the debt
due US by our associates can be
placed upon a regular basis, the
total of capital and unpaid interest
will very closely approximate the
capital sum Germany is now begin
ming to discharge, namely S12,O0O,-
100000.
shall have occasion presently
to deal with that other phase of
European Indebtedness to us, name
ly the vast sums which have been
| lenL in the form of credits. private,
"as contrasted with governmental,
which must today represent not less
than $4,000. 900. 900 and are steadily
being increased by further credits
TO enable Europe to absorb our
foodstuffs and cotton. as well as
certain minerals like copper.
Germany Takes II Years.
But assuming for the moment,
as is obviously reasonable, that in
the end the total of European in
y,
that is in the shape of the prin-
cipal and interest of loans made by
our Government during the war and
Armistice period. will be approx
mately that of the German sixed
payment now decided upon. namely
$4,000, 900. 900. ii is possible at
once to obtain certain figures Tor
use in indicating what this fact
means And the further assump-
tion can be made that. in any event,
we shall not seek to impose more
enerous terms upon our associates
OF the war than have been i'm
posed upon the nation responsible
for the struggle and its destruc-
tions.
Now Germany has undertaken TO
discharge the capital sum of s12,-
000. eco. 900 in the period of a thiro
of a century. approximately. by the
annual payment of s72O. 1000, 900,
two-thirds in direct payment. one
third in an internal tax levied upon
exports or rather upon the whole
external trade of Germany. Thf,
tax of IS per cent must yield s240,-
100000 annually and thus presup-
poses a foreign commerce for Ger
many of $1,000, 100000. that is an
export trade to this amount.
Paying I'm Commodities.
But it is significant for US to note
at once the effects of. this method
Of payment. as it has worked ou,
in Europe and in the case of the
German operation, since this opera
tion must. in general lines serve
as a parallel for our own. In fact
Germany has undertaken to pay =
very considerable part OF her an
nual contribution in coal and she
also has bound herself to make GER
tain payments in the form of COM
pleted ships. In reality she has ror
two years been making payments
of this sort. but they have hitherto
been charged against an initial oo-
legation Of $4,000. .000, 900. totally
outside the $4,000. .Oo0. 900 decided
Dpon at London several months.
ago.
The effect of payment in coal ana
tshipping has beer disclosed in re-
cent months unmistakaoiy. Tne
bulk Of the coal has gone to France
as the chief creditor, with Italy and
Belgium as minor beneficiaries. All
three have had from Germany
something less than 100000 tons
OF coal a year. to which must be
added some $4,000. 900 tons coming
to France from the Sarre
Eject of Competition.
France. Belgium ana italy are
three of Britain's best customers
for coal, or they were up to the
moment when the war ended and
German coal payments began. Bur
the, costs of coal production in Ger
many are greatly less than these
in Britain, as a, result of the depre-
citation of German currency, in part,
at least. As a consequence all three
OF these countries have enormously
reduced their purchase of coal In
Great Britain. The result has been,
first the paralysis Of the coal in
dustry through the restriction of
the foreign market and second. the
coal strike, which followed an e,-
fort to reduce the cost of produc-
tion in Britain. that is the wages
cost in order to enable British coal
to compete with German.
You may put the thing succinc,-
ly and accurately. by saying that
the, allies, in making Germany pay
AN indemnity and in agreeing to
accept payment in part in coal, the
chisf means of payment IN German
hands, temporarily at least, ruined
the British coal trade and brought
on one of the severest economic
struggles the United Kingdom. or.
Tor. that matter. the world. has ever
known And It was one of the
ironies OF the situation, that when
the coal strike was at its height,