The New York herald., 1921-07-17


Britain.
all thought of the exchange of colonies
for debts; the thing is not within the
realms of possibility
| In the end. then. we are thrown back
upon the simple fact that Europe can
only repay its debts to us by goods and
| services. but save for such spendings as
our tourists make annually In Europe
the services are chiefly competitive. Be-
fore the war we had no merchant ma
rine and the British and the Germans
collected toll from us, but to-day we
have a great and idle merchant ma rine
and the larger the percentages OF car
riage earnings which falls to the
British, the smaller the earnings of our
own shipping and the greater the loss to
us upon our marine investments.
But what shall one say OF goods? To
meet the costs Of the official loans and
unpaid interest thereon. now amounting
to more than $1,000. 900, 900 and certain
to reach 81, 200. .ooo, 900. that is equal to
the German indemnity. Europe must
pay us approximately $72o.00o 900 an
nually. On the SIS. 900. 900 900 in private
credits now outstanding and increas-
Ing almost daily the payment, inter-
est and sinking fund included, would
be more than $3oo.o00,ooo annually
Thus. In round figures Europe, to dis
charge It's debt to us. must sell US ST.
100000, 900 in goods annually, in excess
OF what we sell It. less the relatively In
| significant item Of service
where Interests Connict.
To do this Europe must do two things
increase its exports to u.s. decrease its
imports frcm US. Yet II is quite obvious
that both processes contribute to work
| harm to our own industry. Already the
process of the restriction Of imports is
disclosed In the rapid decline Of our ex-
port trade 1t is the fear Of the ex-
pansion OF the expectations of Europe to
us. which dominates the minds Of those
who are undertaking to make the new
tariff bill barrier protecting the Amer
! lean producer from the foreign COM
petitor.
| Meantime to meet an immediate
crisis. we are extending new foreign
| credits. but at the same time we are
| seeking to limit their nature by insist
| ing that Europe shall take from u.s. not
money, which might be spent In other
markets. but goods. We are. in effect
lending money to Europe to buy our cot
ton. copper and wheat AS a result we
keep the money but they get the COM
modities. But obviously the net effect
OF this Is merely to swell the sum total
of what Europe owes us and must pay
ultimately in goods. or r.t at all.
The situation might be improved.
measurably. at least, IL American In
vestors were prepared to go into Eu-
rope, Asia and Africa and spend not
al>ne the principal but the interest OF
European obligations in commercial and
industrial undertakings there. Thus. In
the long run. we should become great
holders in land and other values all
over the world. But the thing which Is
only vaguely perceived yet, save In pro-
fessional quarters. Is the supreme Diff
f]culty Of transferring foreign oblisa-
ton from one side TO the other Of a
political frontier without general dis
location of business inside that frontier.
During the war all III discussion was
over what the defeated was to pay.
During the peace conference the ques-
tion of the sum or the payment d.
vided interest with that of the methods
to be employed to compel payment. But
in the last two years. ever increasingly.
the problem has been how to accept
payment, and this holds good quite as
much with the American foreign loans.
governmental and private as with the
German indemnity. And the nrst ef-
forts to make Germany pay. as dis
closed by the British coal situation.
have brought disaster. not 70 the Ger
man. but TO one OF his principal credi-
tors.
Cancellation Opposed.
To-day, so far as the United States
Is concerned. there exists an overwhein-
ing opposition to the cancellation OF the
-. A. a
CATION. moral. much less material. for
such cancellation. II Is clear that II
Europe docs not pay what - owes, the
American taxpayer will have to continue
20 bear the burden. Congress- with
manifest hostility, has met Mr.. Nell
Ions proposal that he be granted full
authority to dispose Of the question, and
there is no nnistaking the suspicion with
which the country as whole views the
subject. suspicion coupled with deter
mination to get its money back.
Yet at the same time there is a gem
eral public demand that Congress enact
legislation which will permit American
industry to escape ruinous competition
with European industry. which means,
| In fact. the erection of a tariff wall.
| But the higher the tariff wall the more
! difficult the inflow OF goods from Eu-
rope. goods which represent the solc
considerable means of payment of what
Europe owes US. In effect, we insist
upon payment. but decline to accept
payment in the sole medium available.
quite correctly perceiving that to ac-
cept such payment Is to suffer immedi-
ate hsrdships.
Finally, as II further 10 complicate the
situation. we insist upon further exten-
sions of credit 10 Europe. with the con-
dition that these credits shall take the
form OF American goods. We decline TO
lend Europe money to spend where and
| as IL pleases, but we consent TO lend Il
money TO buy our goods. Yet this mere
| " results in a further expansion OF the
capital sum OF Europe's indebtedness 10
US and the similar increase in the
amount Of European goods we must abb
sorb annually IL Europe is to pay US at
all. Thus, at one time e refuse to al
| low Europe to pay us and we insist
upon the daily increase OF the sum which
| Europe owes us, and as far az one can
see the process Is likely TO continue al
most indefinitely.
II 10 difficult 70 bring the situation
home TO the man in the street because
he simplfies the discussion and thus
! misses the fact He thinks of Europe 5
debt to US as he thinks of a neighbor' s
debt TO him. He thinks In terms Of
money and marches straight TO the point
4