New-York tribune., 1921-11-29
Vanderlip for
Using Debt to
Save Europe
tcontinusd from pass emo,

O AA wv
tcentinusd from pass ene)
States. Many Englishmen are slow to
say they do not owe this debt, but on
the other hand there are many people
in responsible positions in England
who hold that the debt should not be
considered on the same basis ns an or
dlnary relation between debtor and
creditor.
Menaces Financial Stability
"The foregoing is fair picture OF
the situation to-day. The total weight
OF international obligations has become
so great that it menaces all future
financial stability. 1t promises to make
| the recovery of general financial stabil-
lty in Europe impossible unless some
means for adjusting these debts be
; found. In any event, it is believed, both
i by statesmen and financiers, that it is
impossible for Europe to stageer back
to stability under this enormous load
OF international debts. England would
If she could be paid what she is owed !:
failing that. the feeling there is GEN
eral that her obligations should be
Cancelled it she cancels the obligation.
due her.
THE French have the least ohiec-
tlvlty In their point of view of anv
people in Europe. France has been
! injured; her injuries must be repaired.
unless the conclusions in regard to anv
Prooiem square with that axiom, the
conclusions are set down as wronr.
| French Alone Uphold Indemnity
Europe feels it is to-day gr;pped
in the jaws Of pincers, the handles
OF which are two sets of financial obli-
! cations, impossible of discharge. One
handle of these pincers is the war
Indemnity, the other the intergoyern-
ment debts. By every one outside of
France it is admitted that the indem-
nifty as laid is impossible of execution.
Outside Of France there is unanirnity
! of opinion that unless the terms of the
indemnity are materially altered Ger
many will go into financial collapse.
''In England there is sharp awaken
ing to the economic significance of ac-
cepting great international payments
such as those involved in the figures
| of the indemnity, or the figures Of the
inter-Allied debts. Such totals can
only be paid in goods. 1t is seen that
the export of goods sufficient in amount
to meet claims of such magnitude as
the indemnity, or the nter-government
debts. cuts new channels of commerce
that may hurt the nation receiving pay
ment as much as it burdens the nation
making payment.
$50 far as America is concerned we
should do nothing which will stimulate
quibbling as to the basic fact of the
obligations. We loaned American dol
lars. 1t was raised under the greatest
pressure from our people 1t was at
the time regarded by us as part Of our
war contribution. That contribution
was made in full measure and in ample
amounts when we spent directly, as
we did. $4,000 100000 and when we
moved 100000 men over 5000 miles
are matters of honor between our as
sociates and the treasury of the United
States. At the time these loans were
made not the slightest suggestion was
raised casting doubt as to the nature
of the obligations which were created.
They were unequivocable obligations to
repay.
Loans Must Be Respected
81 believe we should repuIse with
vigor any suggestion on the part of our
Allies that these advances were not ac-
tually loans. l believe that we should
{ sharply repel any theory that these
loans were contributions toward the
enenys defeat and were only osten-
! sibly in a form contemplating repay
ment.
II should then lay down as the first
postulate the principle that the allied
debt is just debt, legally and morally,
i and whether it can be paid or not it
should be frankly acknowledged as a
just debt.
"What would be the effect upon
America if this debt were acknowledged
and paid9 The merest tyro in interna-
tional economies now understands that
large international obligations can only
be discharged by paying in goods.
Disaster Would Result
"The full consequences would be pro-
found if the payments could be made
and were made with ony degree Of
promptness. We need not look further
than to contemplate merely the receipt
of $500, 0,000,00o year of interest. If
that came in the form of goods, our ic-
dustrial situation would be upset in
way and to an extent we have not here
tofore experienced. The effect upon
our labor situation and the consequent
social problems which worId be raised
would be menacing. 1t would appear
then that we had erected q paradox, if
we take this view of the situation.
France might feel, with a good deal
OF reason. that we should agree with
her that it would b. national folly for
her to reduce the strength of her army
unless she first obtains some outside
guaranty for her future France is
naighbor to a far larger nation which
to Q man now feels that 1t has been
unjustly treated. Germany may be
ever so wa~ sick at the moment. but
it is not only conceivable, it is quite
probable, that the day will come when
Germany will GEEK by force to retrieve