The Richmond palladium and sun-telegram. [volume] (Richmond, Ind.) 1907-1939, 1921-12-16
AUTHORITY To
SETTLE DEBTS
is NECESSARY
Administration Contends OBJ
legations Due Us by Europe
Should be Changed from
Unsatisfactory Notes.
HINDERS WORLD TRADE
by MARK SULLIVAN

SD liuCH lu6 dHlUuul Us Lut pi 6Scllt III
satisfactory status of the ten billion /
dollars of principal and additi6 al bill |
lion and a 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 I
American government whose duties !
require 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 inter
fere with the ability of the debtor ma
tions to borrow money and in other
ways prevent those nations from bal
ancing their budgets, from putting
their affairs into business-like shape,
and from becoming buyers and con-
sumers of our goods.
Some time ago one of the most sol
vent and dependable of these 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 it would
be entirely open to the government
OF the United States to send the
sheriff into the bank the next day and
make an attachment on the entire
amount on account of the debt overdue
to our government.
illustrates Contention
OF course our government would not
be likely to do anything so unreason-
able. but the episode illustrates the
contention of President Harding, Sec
retary of the Treasury Mellon, and
others, that these debts owed us by
European governments should not con-
tinue to run along indefinitely in the
very unsatisfactory shape of merely
overdue notes.
Any business man with the faintest
experience will realize this point. It
is the desire of the administration to
refund these debts, which means to
get the debtors to sign new notes pay
able 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, ii is
true that the actual working out OF it
would involve many complexities OF
policy and practice. These 'complica-
tions are governed by the differing de
grees of solvency of the debtor ma
tions. These differing degrees of col
lectibility of principal and interest are
a fact which every official and every
business man recognizes. Ultimately.
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 5 per cent
interest at once, some could begin to
pay 3 or 2 or l per cent at once; some
could not pay any interest now, but
might ultimately pay both principal
and interest if given a very consider
able extension of time. At least one of
our debtors, Russia. is in such a con-
dition that we cannot for the present
do anything at all.
In some of the cases private busi-
ness man, finding himself in the posi-
tion 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 Reluctant
Congress is reluctant to do this The
request was made six months ago and
the measure still hangs fire. In JUS
tice TO congress it should be said that
its reluctance reflects the state oil
mind of its constituents. | am told
that of the letters that come to Wash
ington 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 is, and
how undesirable it would be if it were
possible, is thing The average voter
does not understand.
III the average voter were told, as
have been told, the following story, he
would probably think there would be
something radically wrong abou
either the intelligence or the integrity
Of the American official concerned
An Official of one of our debtor ma
ions. either in earnest or as a bluff
said to an American official: VERY
well, we'll pay you the entire sum a
once and send the amount over here
in gold II was, as famous come
dian used to say, "a good safe offer
The American official replied: "Fo
heavens sake. don't" Just why i
might be undesirable for America t
receive several hundred million dol
lars in gold is matter involving suCl
understanding of economics and fin
ance. and one of the effects on our in
lernational and domestic trade. tha
no ordinary voter can be expected Il
comprehend it.
Some Urge Cancellation.
There are some competent person
whose sincere judgment is that tn
best thing TO do. in the interest o
ourselves and the rest of the world
would be wholesale cancellation o
debts especially if this cancellatiol
was made, contingent on the debtor
taking certain steps as regards the re
lation TO US and to each other
This article does not aim to d
more than state the barest high spot
OF the situation. Further than wha
is stated mere. there are psychologist
factors involved as regards our rel
tions with other governments. sue
rs can be handled satisfactorily onI
Continued on Page Twenty